I don't know the legal specifics but they absolutely can, and do, all the time. It makes the stock sink so it's not something you do uncalculated, but struggling or new companies do this all the time. It's a way to raise capital in the public markets. If people believe in your growth, they'll go along and you might not crash too badly after dilution. And yes, some dilute and pay their executive team handsomely year over year.