Stock-based compensation (SBC) doesn't cost a company cash directly — but it's not free. Every share issued to employees dilutes existing shareholders exactly as much as if the company had paid cash compensation and then sold new shares to raise it back.
Why Intrinsic subtracts it by default. Many "adjusted" earnings metrics add SBC back, treating it as a non-cash, non-real expense — the same way they'd treat depreciation. That flatters companies that pay employees heavily in stock (common in tech). Subtracting SBC from owner earnings is the conservative, real-cost treatment: it reflects the actual economic dilution shareholders experience, not just the cash that did or didn't leave the bank account.
The trade-off if you turn it off. Turning this toggle off will increase the calculated owner earnings and therefore the DCF valuation — you're choosing to treat SBC the way many companies' own "adjusted" metrics do. That's a real, defensible choice some investors make (especially for a company clearly moderating its share dilution over time), but it's a choice to be more optimistic, not a neutral default.