If I’m understanding correctly, a company at any given time has a fixed number of shares that split the ownership of that company, thus if a CEO is paid with shares someone else must be giving up their shares.
In: Economics
> where do those shares come from?
Usually, they dilute the other shares. Everyone else’s shares get less valuable.
If you found a company and have 1 of 3 shares, you can sell it for one-third ownership of the company. If the company compensates the CEO by paying him 50 shares, then you went from owning 33% to owning 1.9%
>a company at any given time has a fixed number of shares that split the ownership of that company
Eh, you used “fixed” and “At any given time”. Places they pay employees with stock don’t have a fixed number of shares. This year there’s a “fixed” number of 3 shares, but next year there will be 53. It’s not really fixed.
Long story short: The finance guys and lawyers will screw you over and steal the company. And this is a progressive better way of doing things that actually gets the CEO to care about the company and do their job.
Latest Answers