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
If a company has 100 shares outstanding and is worth $200, then grants the CEO 1 share of stock compensation, it now has 101 shares outstanding but is still worth $200.
All else equal, the value per share goes from $2 to $1.98.
(the other answers saying the company owns or purchases the shares, or has some set aside are either not ELI5 or blatantly incorrect. The company will get board approval to grant employee stock options from time to time, but until they are issued to employees, they are not owned by the company in any sense… they are just available to be granted. And when the company eventually runs out of these authorized shares, the board will approve a new authorization for more shares)
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