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  • Isn't most stock compensation written in terms of number of shares? Like, we annually pay you $100,000 plus 10,000 shares, the idea being, if you help the company keep its share price high, you get a direct benefit...and if it falls, you feel the pain. Now, I had understood that companies may use their share reserves as collateral for loans, so if those reserves decline in value, the agreement with the lender may be in crisis. Commented Mar 16, 2020 at 18:29
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    @CCTO Yes, stock compensation is usually a number of shares. But if you're hiring somebody new, or issuing refresher grants, or negotiating a change in pay, you'll need to offer more stocks to make the person happy if the stock price is lower. Commented Mar 16, 2020 at 18:38
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    So lower stock price doesn't increase the number of shares you'll need to pay to people under current contracts, but increases the number of shares you'll need to pay to people under future contracts. Commented Mar 16, 2020 at 18:39
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    Re "Changes in the share price typically don't directly affect the company's operations": Well, some companies change operations in order for the stock price to go up in the near term (even if it means it will go bankrupt in the middle or long term). Commented Mar 16, 2020 at 19:45
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    Yes, you are all right that there are ways that the share price can affect certain aspects of the business (as I said in the answer), but in the typical case it doesn't make much of a difference. Commented Mar 16, 2020 at 23:32