<p>Company can always issue more stocks (subject to approval of shareholders). If shareholders approve company can always just create new stocks for CEO.</p>
<p>However, in real world this is not how CEO compensation usually works. IRL CEO's will get stock option. Stock option allows them to buy some stocks from company at some predetermined price (which will usually be lower than market price). Afterwards when CEO decides to exercise the stock option either some of the existing stock held by investors are sold or new stocks are issued.</p>

CC BY-SA 4.0
2023-03-12T20:33:35.100Z
Yes, but does companies like Apple, Google, etc. issue more stocks in order to give them to their employees? Because thousands of employees get stocks, won't it lower the stock price?
Fireworks1
CC BY-SA 4.0
2023-03-15T10:23:17.940Z
@Fireworks1 more stocks, all else equal, would mean lower price, but: A) apple has 15 trillion stocks outstanding, adding 1000-10000 more stocks is drop in sea B) companies usually get more valuable over time C) there is risk to the CEO that he will get paid in stocks that will become worthless the reason why CEOs take this sort of compensation is that they already have high salary so they can afford to act more risky and also because they are getting options to buy stocks not stock directly which allows them to exercise the option when it would give them tax advantage
csilvia
CC BY-SA 4.0
2023-03-12T12:03:20.277Z
2023-03-12T12:03:20.277Z
csilvia
<p>RSUs and stock options are two entirely different things. Stock options give you the right to purchase company stock at a specific price at (a) certain date(s). RSUs grant you the stock itself once the vesting period is complete and you don’t have to purchase it.</p>
<p>In the case of RSUs, shares are considered to be issued upon vesting.</p>
<p>It also has little to nothing to do with CEO compensation. This compensation is given to a large amount of employees and is designed to encourage employees to stay for a long term, thus improving retention.</p>
<p>The latest Apple employee stock plan can be found <a href="https://contracts.justia.com/companies/apple-111/contract/227527/" rel="nofollow noreferrer">here</a>.</p>
<blockquote>
<p>SECTION 5. SHARES SUBJECT TO PLAN AND SHARE LIMITS.</p>
<p>(a) Basic Limitation. The Common Stock issuable under the Plan shall
be authorized but unissued Shares.</p>
</blockquote>
<p>Authorized shares are the number of shares that a corporation is legally allowed to issue. The number of outstanding shares (already issued) is always equal to or less than the number of authorized shares. Having large amounts of authorized shares that are not issued give a company flexibility for employee compensation schemes but also for additional financing needs.</p>

CC BY-SA 4.0
2023-03-23T03:09:52.447Z
2023-03-23T03:15:29.943Z
2023-03-23T03:15:29.943Z
AKdemy
<p>I work at Apple Inc., as a part of my compensation agreement I was granted an X amount of RSUs. A portion vests each year and becomes an AAPL stock on the market in my ownership.</p>
<p>It leads me to wonder: from where does the company have stocks of its own, so it can give it to employees like cash?</p>
<p>My understanding is that when you establish a company, the founders (private people) own 100% of the stocks.
Afterwards they may give stocks to investors in return for an investment,
and if the company goes to the market then the public can buy stocks in return for cash.</p>
<p>So did the company buy stocks of its own (from the company's money) so it can grant it to employees as a work compensation?</p>

CC BY-SA 4.0
2023-03-22T21:58:33.110Z
Note that when a company goes public and issues stocks, they don't need to put 100% on the market.
BB King
<stock-market>
When a company gives RSUs to employees, from where does it have those stocks?
Fireworks1
# When a company gives RSUs to employees, from where does it have those stocks?

(Asked by: username_0 on 2023-03-12)

I work at Apple Inc., as a part of my compensation agreement I was granted an X amount of RSUs. A portion vests each year and becomes an AAPL stock on the market in my ownership.

It leads me to wonder: from where does the company have stocks of its own, so it can give it to employees like cash?

My understanding is that when you establish a company, the founders (private people) own 100% of the stocks.
Afterwards they may give stocks to investors in return for an investment,
and if the company goes to the market then the public can buy stocks in return for cash.

So did the company buy stocks of its own (from the company's money) so it can grant it to employees as a work compensation?

**Tags:** stock-market
> **Comments:**
> **username_1**: Note that when a company goes public and issues stocks, they don't need to put 100% on the market.  

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## 2 answers

### Answer by username_2 on 2023-03-12. Score: 0 | Accepted answer

Company can always issue more stocks (subject to approval of shareholders). If shareholders approve company can always just create new stocks for CEO.

However, in real world this is not how CEO compensation usually works. IRL CEO's will get stock option. Stock option allows them to buy some stocks from company at some predetermined price (which will usually be lower than market price). Afterwards when CEO decides to exercise the stock option either some of the existing stock held by investors are sold or new stocks are issued.

> **Comments:**
> **username_0**: Yes, but does companies like Apple, Google, etc. issue more stocks in order to give them to their employees? Because thousands of employees get stocks, won't it lower the stock price?  
> **username_2**: @Fireworks1 more stocks, all else equal, would mean lower price, but: A) apple has 15 trillion stocks outstanding, adding 1000-10000 more stocks is drop in sea B) companies usually get more valuable over time C) there is risk to the CEO that he will get paid in stocks that will become worthless the reason why CEOs take this sort of compensation is that they already have high salary so they can afford to act more risky and also because they are getting options to buy stocks not stock directly which allows them to exercise the option when it would give them tax advantage  

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### Answer by username_3 on 2023-03-23. Score: 4

RSUs and stock options are two entirely different things. Stock options give you the right to purchase company stock at a specific price at (a) certain date(s). RSUs grant you the stock itself once the vesting period is complete and you don’t have to purchase it.

In the case of RSUs, shares are considered to be issued upon vesting.

It also has little to nothing to do with CEO compensation. This compensation is given to a large amount of employees and is designed to encourage employees to stay for a long term, thus improving retention.

The latest Apple employee stock plan can be found [here](https://contracts.justia.com/companies/apple-111/contract/227527/).

> SECTION 5. SHARES SUBJECT TO PLAN AND SHARE LIMITS.
>
> (a) Basic Limitation. The Common Stock issuable under the Plan shall
> be authorized but unissued Shares.

Authorized shares are the number of shares that a corporation is legally allowed to issue. The number of outstanding shares (already issued) is always equal to or less than the number of authorized shares. Having large amounts of authorized shares that are not issued give a company flexibility for employee compensation schemes but also for additional financing needs.


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