Recently, we had a successful appeal come from the South Carolina Court of Appeals involving alimony. It also discussed stock-based compensation and how it is to be treated in divorce cases.
In Scherba v. Scherba, (Opinion No. 6128, filed March 18, 2026), the Court of Appeals reviewed a divorce involving a husband who had worked for Google and a wife who held a law degree and worked in the military reserves. The Family Court had originally awarded wife $1,500 per month in permanent alimony and $3,125 per month in child support. The parties had been married for approximately 24 years by the time of trial and had two minor children.
We appealed the decision on two grounds: first, that alimony should not have been awarded at all, and second, that husband’s Google restricted stock units — known as RSUs — should not have been counted as income when calculating support because it was already divided as an asset by agreement of the parties and husband was no longer earning RSUs as part of his compensation by the time of trial.
The Court of Appeals agreed with us on the alimony award and reversed the Family Court’s decision finding that alimony was not warranted under the circumstances. On the RSU question, the court sided with the lower court’s original ruling which considered husband’s restricted stock units as income in its support award.
So, why was the alimony decision reversed? Wife held a law degree and had advanced her career with Air Force Judge Advocate General, becoming a Colonel by the time of trial. She earned approximately $77,000 per year working part time as a reservist, but the Court of Appeals found that she was underemployed. The evidence showed she had opportunities to pursue better-paying employment and could supplement her full-time earnings with part-time reserve pay but chose not to do so. The Court concluded she had not made a good-faith effort to maximize her potential earnings.
This Opinion addresses a core principle of South Carolina alimony law: that alimony is meant to maintain a spouse at or near the standard of living maintained during the marriage. However, where a spouse is underemployed and capable of being self-supporting no matter the length of the marriage, alimony is not favored.
Here, Wife maintained her footing in her career and advanced her career through marriage and even during litigation. This situation is starkly different than a spouse who gives up career opportunities to raise children or to support their spouse in their endeavors. Because Wife had the education, experience, and earning capacity to support herself, the court found that permanent alimony simply was not warranted. The Court also considered the parties’ standard of living during the marriage and found that they lived a middle-class lifestyle which also did not favor husband having to pay wife permanent alimony.
Next, an issue never addressed before by our Courts is how to treat restricted stock units, which is something we are asking our appellate courts to do.
RSUs are a form of stock-based compensation that are increasingly common at technology companies and across many industries. They are “restricted” because there are conditions that must be met (such as length of employment or performance goals) before the shares vest. Upon vesting, the ownership of the shares shifts to the employee, and they are deposited into the employee’s account. The employee is taxed on the stock once it vests, however, the employee must then sell the stock to have liquid cash if he or she chooses to do so. The sale could trigger a second tax consequence on the employee if the value of the stock increases between when it is vested and when it is sold.
Husband and wife equally divided the restricted stock earned during the marriage. We argued that in accordance with previous case law, because the stock was divided as an asset, it could not then also be treated as income in determining alimony or child support obligations which is what the Family Court did. In addition, by the time of trial, husband had been let go from his employment and was no longer receiving stock as compensation other than as a form of severance pay.
Our Court of Appeals found it appropriate to count the restricted stock as an asset subject to division as well as income for purposes of alimony and child support. We disagree with this analysis and have petitioned our State Supreme Court to address this issue.
What does all this mean for you? Whether you are the spouse paying support or the spouse receiving it, this decision has real implications depending on your circumstances. The decision has emphasized the need for our Family Court to address all factors in determining alimony awards, not just a few of them. In other words, a long-term marriage does not necessarily mean that alimony should be awarded on a permanent basis.
Under the current decision, if you receive RSUs, courts may count vested RSUs as income for alimony and child support obligations, even if they are subject to division as an asset. We believe this to be an improper double counting of the same asset, meaning it cannot be counted as both an asset subject to division and income for spousal support at the same time. This is what we are asking our Supreme Court to clarify.
Stay tuned for additional updates on these issues as we wait to hear from the Supreme Court.
