The problem with stock compensation is that a worker’s incentives aren’t that of an owner. Let’s say that you give them stock, they hold the stock, and the company hits hard times. Now they’ve lost both their job and their savings. That’s bad. Let’s say that you give them 5% of their compensation in stock. They would keep wanting to make unprofitable factories because their stock compensation is minimal. Let’s say 80% of their compensation is stock. They’ll need to sell it to cover living expenses and so you’ve just given them cash with extra steps.
The ownership mentality only works if you’re dealing with rich people (like a CEO) that can defer realizing their compensation and where you’re willing to grossly overpay them.
Turns out a company with a lot of overpaid employees and out of date products is a lousy investment.
That's not a bad thing, but it's how the definitions and philosophies flow.