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by lotsofpulp 773 days ago
> thus should not be getting a dividend allocation (i.e. a non-zero allocation to an option holder is a disproportionate allocation)

This is ignoring the fact that existing shareholders benefited by not having to pay the employees more cash in lieu of the options/RSU. For example, existing shareholders could have benefited from higher dividends due to higher cash flow, or greater appreciation in stock price due to bigger stock buybacks due to higher cash flow.

The two effects should cancel each other out.
1 comments
tgma 773 days ago
> not having to pay the employees more cash

I acknowledge there is an effect on employee compensation. How it actually plays out is not a simple linear one though (esp. since the comp decision is made at grant time and the impact is seen a while later with different assumptions). The induced incentives and behavior can be different depending on the model chosen.

> The two effects should cancel each other out.

Not sure the math is as clear cut as canceling each other. Maybe. Probably not.

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