Use Case · For the CFO
Cashless Participation® sources shares from the open market instead of issuing new ones. The same equity benefit reaches employees without expanding the float, burning the share pool, or requiring an offsetting buyback.
The Problem
Every traditional equity plan increases your shares outstanding. The shares are newly issued, the burn rate climbs, and existing holders are diluted - quietly, predictably, every quarter. Most companies treat it as a fixed cost of running the program. It isn't.
Traditional equity plans are funded by issuing newly authorized shares each cycle. Those shares add directly to the diluted share count and reduce existing holders' ownership percentage with every purchase window.
Burn rate from comp programs is a recurring drain on the share pool. Companies routinely return to shareholders for additional authorization - an expensive ask that signals comp-plan strain to the market.
The standard response is to buy back shares to offset comp-plan issuance. Industry data suggests roughly 70% of buyback capital at large-cap public companies goes toward offsetting dilution from equity plans.
The Mechanism
Traditional equity plans issue newly authorized shares each cycle - diluting existing holders and burning through share authorization faster. Carver Edison sources participant shares from the open market, funded through the Cashless structure. The same equity benefit flows to employees without any new issuance.
Traditional Equity Plan
Cashless Participation®
The Outcome
Zero net dilution from the equity plans. The float holds, the share pool holds, and the buyback does real accretive work instead of running in place.
Illustrative example
For a company with $100M in annual SBC funded through new share issuance.
Today
With Carver Edison
Methodology: 85% of equity plan share issuance eliminated through Cashless Participation, growing 5% annually with the comp budget. 3-year dilution avoided = $85M + $89.25M + $93.71M = $267.96M of share value that stays with existing holders instead of being diluted away.
Related Outcomes
Decrease stock-based compensation by as much as 85% on the same grants.
See use case → 03.Lower SBC lifts net income. Fewer shares shrinks the denominator. EPS improves from both ends.
See use case → 04.Stop spending buyback capital offsetting the dilution your comp plan creates.
See use case →We'll model the projected impact on your burn rate and float against your actual share count and grant philosophy.