Because the CEO needs the engineer more than the engineer needs the CEO. By definition, the CEO is issuing stock in lieu of money. They are issuing a chance a

Because the CEO needs the engineer more than the engineer needs the CEO. By definition, the CEO is issuing stock in lieu of money. They are issuing a chance at very large future compensation (say 10% chance at 12x) in lieu of current cold cash (100% chance of 1x). The CEO is not in the driver's seat, otherwise they wouldn't issue stock. NOTE: This is a totally different thing than stock incentive programs.