To "ignorant" shareholders, there's no difference between stock and cash compensation.

In the long run this is true, but in the short run ignorant shareholders overlook the dilution and just focus on the reported cash profit.

I do say I find it interesting that people even think that if you are going to be paid $x in total compensation it is better to be paid $x-y cash and $y in stock. I guess this sort of magical thinking is why companies do it.

That's what I'm saying, the "reported cash profit" includes stock-based compensation as an expense exactly like regular salaries. You don't even have to know what dilution means.

As opposed to the use of multiple share classes with different voting rights?

Well yes another con of the shareholders. Why shareholders invest in companies doing this sort of stuff is beyond me. It is not as though they are they actual owners of the business or anything.

I agree with you there (one reason I sell all my goog)