Where do the shares come from? Who buys the shares when an employee leaves? I assume there is a 3rd party bank or something that facilitates. But does the company just have infinite shares to give out?
TIA
In: Economics
Companies have a certain number of shares they are authorized to issue. The number they’ve actually issued is less than that. When they grant shares to employees, they’re just coming from that pool of authorized but unissued shares at their discretion.
Awards to employees/other issuances effectively dilute existing SHs. This is one reason why companies conduct share repurchases, to manage that dilution.
Latest Answers