Stock options as compensation for employees


When a CEO, or other employee is granted stock options, how do they work?

I know there's a vesting period and an expiration date.

Do CEOs or employees that exercise and then sell their options on the market create new shares of stock?

Is this acting as a way for the company to add more stock to the market for buying and selling without diluting by manipulating available shares with splits and whatnot?


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