Stock-Based Compensation: A Silent Killer?
Many companies buy back shares to boost returns, but Stock-Based Compensation (SBC) can quietly cancel out these buybacks by increasing the total share count — which lowers your stake and real earnings. Smart investors subtract SBC from Free Cash Flow and avoid companies where SBC exceeds 10% of net income, following the example of legends like Warren Buffett and Mark Leonard, who reward performance without diluting shareholders.Stocks