The writer, managing partner at Thoma Bravo, warns that many firms issue shares freely as stock‑based pay, eroding value. The cost hides in adjusted earnings, a warning from Aswath Damodaran. Market volatility pushes companies to grant more RSUs when their shares fall, masking dilution even as buybacks offset it.

The GAAP gap has tripled since 2020, from –14% to –44% among the 17 largest US‑listed software firms. Even cash‑rich giants like Alphabet have used equity raises—$85bn recently—to let employees cover tax bills on RSUs, a rare move for mature firms.

Three forces threaten to worsen the math: AI infrastructure spending of $725bn in 2026, companies that cut market values by AI repricing issuing more stock, and the rise of AI “acqui‑hire” deals that keep RSU obligations rolling. Transparent accounting of stock‑based compensation would protect shareholders and healthy markets.