Yes, that’s the gist of it. The predetermined share is based on your target compensation and your the current share price. Say your TC is $500K but $300K is equity, if the share price is $10, that’s 30k shares..at $5 that’s 60k shares. Usually new hires are given a grant vested over 4 years with total dollar amount that gets converted to shares at that point, so in the case above it’d be $1.2M for initial grant and you are right in that this would not affect dilution if prices go down. Though in addition, there are annual refreshers that will provide employee with new grants, usually at annual equity dollar value ($300k) vested over 3 years in SNAP’s case. For this, they would basically need to grant double the number of shares as the previous year, if stock price drops 50% within a year, which is basically what SNAP has done. This also doesn’t factor in quickly declining stock will result in your top performers to leave since their older grants are heavily underwater, in some cases resulting in their TC being less than someone much junior but just so happen to join at a much lower share price. Companies like META combated this during COVID by topping off underwater grant holders to bring them back up to target TC. This requires granting more shares and I would imagine SNAP will need to do some of this if share prices hang around this price for too long.

---