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Beginner here.

Let us say, I join some company X. They offer me 400 stocks over 4 years of vesting period. Similar to me, there will be hundreds of employees who will be joining everyday.

Doing a quick Google search, Authorized and outstanding stocks are the common terms which I came across. So, let us say company has 100,000 authorized stocks; 40,000 outstanding stocks. Based on my understanding, after vesting period, those stocks become equivalent to that of a common stock that you may buy directly from the market (apps like Robinhood)

So, where do new employees keep getting new stocks from if there is a finite number of stocks available?

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    A few things to consider: 1) even the biggest companies don't hire 100's of employees per day, if they do it wouldn't be for very long. 2) not all employees are offered RSUs or the same number of RSUs. 3) as employees leave invested RSUs return to the pot
    – emilliman5
    Commented May 14, 2020 at 0:39

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The number of authorized stocks for a company big enough to hire 100's of people per month (never mind per day) will likely have 100's of millions of shares authorized, not 100's of thousands.

For example, my company has ~20,000 employees (so assuming the average employee stays for 5 years, they need about 300 new hires per month) and ~400,000,000 outstanding shares. Typically 2-4,000,000 shares are traded per day on the market. Or about 60,000,000 shares traded per month.

So if they offered 400 RSUs to each employee, that would be about 120,000 shares per month. Which represents only about 0.2% of the trading volume for their stock.

As to where they get those shares, they could deplete their treasury stock, or run a re-purchase program, or issue new shares from their unissued stock.

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