Stock-Based Compensation (SBC)
Equity granted to employees as pay. Non-cash, so it is added back in the cash flow statement, which is why some companies headline an adjusted EBITDA that excludes it. That treatment is contested for good reason: SBC is a real cost that dilutes existing shareholders, and excluding it while using a diluted share count is having it both ways.
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This term comes up constantly in accounting interviews and on the desk.
IB technical questions guideRelated Accounting terms
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