Stock Based Compensation

See: Restricted Stock Unit - RSU.

When you pay your executives in stock, rather than cash.

Why would you do this? Because you want to make them feel and act more like owners than just rented employee talent. The presumption runs that owners will run the business better than mere employees, and it's a big part of the reason so many experts point to Silicon Valley as having been so broadly successful as a culture, as much as a financial thing. That is, investors are long-term greedy, rather than short-term greedy. They "happily" share in the spoils by granting stock based compensation, in many cases, to all employees in a company.

Stock. Stock Options. Profit participation. All of them. Employees share in the spoils of the Tech Wars, and proudly go to Valhalla when their time is done.