I'm still trying to wrap my head around a lot of things in "stock world", but wouldn't that be diluting the stock then though? If the shorts just have to cover, the O/S would stay the same, which would be better for a CEO that took his pay in the form of stock, right?
If someone did that to my company, I sure wouldn't be cutting any deals with them if I had a chance to hold them over the fire!! But maybe that's just me. :)