Metric
Stock-Based Compensation Ratio
Share-based pay as a proportion of revenue.
Formula
Stock-Based Compensation ÷ Revenue
Definition
SBC ratio shows how much of the company's revenue is effectively paid out to employees as shares rather than cash. It's a real cost to existing shareholders because it dilutes ownership.
Why it matters
High or growing SBC can quietly erode per-share value even when headline earnings look healthy. Compare it to buybacks to see net dilution.
Building blocks
- Stock-Based Compensation
- Shares or options granted to employees as part of their pay.
- Revenue
- Total money earned from selling products or services.
Educational information only, not investment advice. Turtleway helps you understand what a metric or concept means; it does not tell you what to buy or sell.