Sight Sciences (SGHT), an ophthalmic medical device company, inserted new language in its latest quarterly filing signaling the potential for significant shareholder dilution over the next decade. The company revealed new details regarding its 2021 Incentive Award Plan, which allows it to grant stock options, appreciation rights, dividend equivalent rights, restricted stock awards, and restricted stock unit awards to essentially anyone it wants.

Initially, Sight Sciences reserved 5.2 million shares of common stock for future issuance under the 2021 Plan. The reserve is the equivalent of approximately 10.8% of the current shares outstanding.

The reserve, according to management, is no longer sufficient.

With shares down more than 65% in the last year, Sight Sciences inserted new language in its latest quarterly filing detailing how it plans to increase the amount of shares available under the incentive plan:

“This initial reserve will be increased annually on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031. These annual increases shall be equal to the lesser of (i) 5% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Common Stock as determined by the Board, subject to certain limitations.”

We checked Sight Sciences recent filings and did not find any evidence of a buyback designed, at least in part, to offset the additional shares.

If the annual share increases are all exercised— and no buyback is executed in the next decade— the share count will increase 55% to 74.15 million by 2031.