The Many Measures of Stock Plan Dilution

We work with compensation and total rewards teams at companies of all shapes and sizes. These teams, especially at late-stage pre-IPO or early public companies, often ask us how they should think about the dilution from their stock plans. The answer depends on what they’re solving for.

In this issue brief, we review different variations of this context. There are many lenses through which to look at dilution with, and each is tailored to certain circumstances or uses. Since there’s no one-size-fits-all answer, the best practice is to track several measures so that no important outcomes surprise stakeholders later.