Getting diluted for fundraising rounds makes sense. Where it gets shady is getting diluted from additional equity grants to existing founders that are majority

Getting diluted for fundraising rounds makes sense. Where it gets shady is getting diluted from additional equity grants to existing founders that are majority shareholders, disguised as e.g. CEO compensation. Or stuff like the founder's kid gets a large new equity grant for joining to create the company esports team (in a company with nothing to do with esports).