Stats › Listings, IPOs and corporate actions › Stock compensation
Stock based compensation and dilution
A lot of pay in corporate America isn't paid in money. It's paid in shares. The company hands employees stock instead of cash, which costs the business nothing out of the bank account and costs existing shareholders a slightly smaller slice of what they own. That trade off is what this page is about.
There are three parts to it. How big stock based compensation has become, and where it's concentrated, which is more lopsided than you'd guess. The old argument about whether it's really an expense, which was settled by the accounting standard setters twenty years ago even though people still argue about it informally. And what it does to the share count, which is where it stops being an accounting question and starts being your question. The reason I wanted this page is a puzzle that took me a while to see clearly. Buybacks have been running at record levels, over a trillion dollars in the twelve months to September 2025, and yet the S&P 500's share count has been shrinking at only about 0.7% a year. Those two facts look contradictory until you realise most of that buyback spending isn't shrinking anything. It's replacing shares that went out the door as pay.
Worth knowing before you use the figures: the long run series here isn't continuous. The older numbers cover the Russell 3000 and the current total covers a different set of 1,588 companies from a different compiler. The notes at the bottom spell out what can and can't be joined up.
US listed companies recorded $386.7 billion of stock based compensation across 1,588 companies in their most recent fiscal years, equal to 10.3% of aggregate operating cash flow. Seven large technology companies alone accounted for $98.9 billion, about a quarter of the total. The consequence shows in the share count. Despite record buybacks, only 17.1% of S&P 500 companies cut their share count by 4% or more in the third quarter of 2025, and the index's long run share count reduction has run at roughly 0.7% a year. Most buyback spending offsets issuance rather than shrinking the company.
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