Apples to oranges. You should be considering salary to salary.
If shareholders want to pay their CEO more directly from their pockets in the form of dilution, it doesn't hurt or affect the standard employee in any way.
If shareholders want to pay their CEO more directly from their pockets in the form of dilution, it doesn't hurt or affect the standard employee in any way.
GAAP requires companies to report stock compensation as an expense because it does actually move wealth around in a zero-sum fashion. It’s not a magic free money tree.
And it's specifically called a non-cash expense, because it doesn't affect cash (which salary does). You are correct in that it isn't a free money tree. It's paid for by shareholders. If the shareholders wish to pay their CEO $X, the government has no reason to intervene. It doesn't make the employees any better or worse off.
(Many do in fact. Carl Icahn for instance.)