In its latest annual report Zoom (ZM), a video communications platform, repeatedly stressed it expects its revenue growth rate to continue declining. Toss in increased competition with Apple, Amazon, and Facebook— plus new competition in the contact center space after abandoning an acquisition in the space— and it’s no wonder the firm’s value has been cut by two thirds in the last year.

Even worse, Zoom warned it’s struggling to retain employees. The company blames the “great resignation” but we suspect the plunging stock price is also a culprit. Though Zoom doesn’t draw a connection, we noticed a key modification in the company’s employee restricted stock unit (RSU) policy that could dilute shareholders.

In its latest 10-K, Zoom inserted new language suggesting the aim is to compensate employees who have seen the value of their RSUs plummet:

“In October 2021, we added a feature to new and existing stock awards that provides employees with additional awards based on certain stock price criteria. “

It’s the first quarter Zoom has heaped additional RSUs on employees but a practice that will continue for approximately four years. We did not find an update to the original equity incentive plan in the exhibit index, but year-over-year (YoY) stock based compensation nearly doubled to $1.4 billion, which the company says includes the impact of the RSU modification.

The number of unvested RSUs increased YoY by more than one million, or 22.95%, to 5.5 million which is the equivalent of 1.84% of current shares outstanding.