Stock Grants are not an "expense" under Generally Accepted Accounting Principles. So by paying in stock, instead of salary, it increases profits on paper. It does help with cash flow and other tangible benefits.

Most employees would be wise to divest much of their company stock as soon as they are allowed. Don't have all your eggs in one basket.

This is incorrect by almost every reading. (There is a "technically correct" reading that the grant is not an expense, but the vesting thereof is and most of your post is concerned with the "paying in stock" angle, not the granting of future paying in stock.)

https://carta.com/blog/what-is-asc-718/

https://www.investors.com/news/technology/amazon-stops-prete... (see the third paragraph about $FB)

What you might be confusing it with is non-GAAP accounting, which some companies prefer to cite/reference in management conference calls and letters to investors, where equity-based compensation is often backed out to arrive at the non-GAAP figures.

Maybe he/she is thinking of a cash expense? Stock compensation will inflate operating cashflow on the statement of cashflows.

This is not my understanding at all. Share compensation is considered an expense because it reduces the value of the shares held by other shareholders.

It's advantageous for cashflow but neutral vs cash on the income statement.

Disclaimer: I am not an accountant, this is not financial or accounting advice.

Disclosure: I work for Shopify, but this should not be taken as a statement about Shopify's accounting or financial practice.

It seems like it would be along these lines.

- The company may have to issue new stock for this. That's like a loan: some entity gives cash, in exchange for a piece of the pie. Not in the expense side of the ledger. This is where the value of the shares gets diluted, but I don't think that fluctuations in the value of stock go into the ledger Publicly traded stock fluctuates all the time; that can't be going into the books!

- If the entity is some body of the company itself which is buying the stock, in order to give it to employees, than that plausibly looks like an expense. Buying stock (in anything) would normally be recorded as an asset, I would think, but if the intent is to give it away, then it looks like an expense. Analogy: a laptop bought for company use would be an asset, but if it's intended to be ginve away as a door prize in a raffle, then it's an expense.

What "would be" along those lines?

GAAP are what they are.

Is this really true?

No.

It's easier to make stock out of thin air (well, sort of) than cash, and accounting wise it's much more pleasant for companies to do so.