Non-cash in the period, economically real through dilution.
Stock-based compensation aligns employees with shareholders but transfers ownership to recipients. It is non-cash when granted or expensed, yet economically real through dilution.
| Concept | Explanation | |---|---| | Grant-date expense | Accounting value recognized over the vesting period. | | Vesting | Conditions under which awards become earned. | | Option exercise | Creates shares when employees exercise options. | | Restricted stock | Shares or units that vest over time. | | Net dilution | Share issuance after considering repurchases. |