Last quarter, Amazon had 834M of depreciation, and 281M of stock-based compensation: 1.1 billion of non-cash deductions from revenue. They made capital expenditures of 1.03 billion. They ended the quarter with about $100 million more cash than they started with.
In general when you're a CEO or board member you'll make more money by granting yourself $x million in stock than you'll make by paying a dividend of $x million which has to be shared among all investors.
Not to mention, there are tax benefits to stock based comp. First, you often have the choice of when to exercise the stock which can make a world of difference especially with AMT, and second, if you hold for a year you'll pay the long term cap gains rate. For lower income people (hehe in this case that would be people who make less than $400k) that's still 15% which is an incredible discount. For higher income folks it's now about 23% but, again, that represents a tidy discount against their marginal tax rate.
