Except in very rare circumstances, management team knows this is going to happen well before passing the threshold where this isn't possible. So it's a (common

Except in very rare circumstances, management team knows this is going to happen well before passing the threshold where this isn't possible. So it's a (common) choice. They are balancing the +/- against other uses of the last bits of cash. To some degree they do it because the employee pool accepts and expects it, no better reason. If the representational damage was more acute, they might choose someone else to disappoint. The more common problem is a "hail mary" play, where the management team is perhaps fooling themselves about the probability of success. I think the ethical thing to do there is discuss it with employees, but that's just me.