Domestic Relations – Alimony Award – Inclusion of Vested Restricted Stock Units in Income

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The Court reversed the family court’s alimony award to Wife, while affirming the inclusion of Husband’s vested RSUs in income for child support and the denial of attorneys’ fees.

The Court affirmed in part and reversed in part.

The Court addressed a cross-appeal from a divorce decree involving Wife and Husband. The parties married in 1999, have two children, and separated in 2020. The family court initially issued temporary orders finding Husband’s gross monthly income to be $25,286, and requiring him to pay $3,000 per month in child support and $3,000 per month in alimony. Husband later sought reconsideration, claiming he could meet his obligations by selling nonmarital Google restricted stock units (RSUs). Wife sought attorneys’ fees, which the court denied. The final hearing occurred over four days in 2023, during which the parties provided extensive financial, employment, and lifestyle testimony.

Husband, employed in IT and formerly at Google, was unemployed at the time of trial but actively seeking comparable positions. Wife, a licensed attorney and former Air Force JAG officer, served part-time as a reservist while primarily raising the children. She reported annual income of $77,214 in 2022 and had been promoted to Colonel. Wife testified regarding her expenses and limited job-search efforts but admitted she had not explored full-time civilian legal opportunities, federal employment, or relocation options, and had applied for only two positions during the litigation. Husband testified to selling approximately 33,000 RSUs to cover legal expenses and presented expert testimony regarding Wife’s civilian earning potential at approximately $101,200 annually. Wife’s expert, a CPA, testified that vested RSUs constituted income available for support. The parties agreed on equitable distribution of marital and nonmarital RSUs and the marital estate, valued at over $1.7 million, with each receiving net distributions exceeding $800,000.

The family court ultimately awarded Wife $1,500 per month in permanent alimony and $3,125 per month in child support, including vested RSUs in the calculation of Husband’s income. The court declined to award attorney’s fees to either party. On appeal, Husband argued the alimony award was improper given Wife’s capable earning potential, and that nonmarital RSUs should not have been included as income. Wife argued the court erred in denying her attorneys’ fees.

The Court of Appeals found that Wife was not entitled to alimony because her income potential and part-time military service indicated she was underemployed by choice and capable of supporting herself, especially considering her share of the marital estate and relatively modest marital standard of living. Conversely, the Court affirmed the inclusion of vested RSUs in Husband’s income, citing case law treating RSUs as earned, taxable compensation, relevant for child support calculations. Finally, the Court upheld denial of attorneys’ fees, noting both parties had sufficient financial resources and that awarding fees could adversely affect the other’s standard of living.

Affirmed in part, reversed in part.

Scherba v. Scherba (Lawyers Weekly No. 011-001-26, 12 pp.) (Paula H. Thomas, J.) Appealed from Lexington County Family Court (FitzLee H. McEachin, J.) Carrie A. Warner, of Columbia, for Appellant/Respondent. Yulee E. Harrelson, of Columbia, and Leslie T. Sarji, of Sarji Law Firm, of Charleston, both for Respondent/Appellant. South Carolina Court of Appeals