I'll just quote IB (like you did): What does Payment in Lieu refer to? Overview: A Payment in Lieu, or Pil, typically refers to a cash debit or credit made to an account in recognition of a stock dividend. A Pil in the form of a debit will be made when an account is holding a short position in a stock on its ex-dividend date. This debit occurs as the lender of the shares which facilitated the short sale remains entitled to all dividends paid throughout the duration of the loan period. Conversely, a Pil in the form of a credit is made when a long stock position in an account has been loaned out on its ex-dividend date. Account holders should note that shares which are held long and which are the subject of a margin lien may be eligible to be loaned by the broker. In this situation the credit originates from payment by the borrower of the shares rather than from a dividend by the share issuer. U.S. taxpayers who are recipients of Pil credits should discuss the tax implications of Pils and non-qualified dividends with their tax adviser. https://ibkr.info/node/42 I highlighted the most relevant text. This seems to have nothing to do with the SYEP.
I look at it as a chance for free money. I've had one name in particular that was consistently lent out as it became a hard to borrow but it has since moved to GC level and hasn't been lent out for a bit. For hard to borrows you can earn a decent yield but for easy to borrows they probably don't need your shares. But do the math, the yield in most stock loan is low. Take your $22,000, I suspect you have a GC name and thus it doesn't earn much on the street. However, take a harder to borrow with a 5% rate and you have some nice extra revenue generated. For the rest - think of it as beer money or at least throwing your hat into the ring. I also can't say I have have enough experience to say for certain but it does look like they try to return stock over dividend payouts. For me, as I see the upside being greater than the downside, I enrolled.
Except that if it's hard to borrow you could generate a synthetic position with options that got you the entire borrow rate and ensured that you got that rate instead of depending on IB to choose to lend it out. And you lock in the rate. So it's really IB (and every other broker to an even greater extent) who is getting the "free money" out of stock lending, even if you are in the "SYEP" program.
And what if I buy and hold stock as part of my portfolio strategy and trade options around my stock positions? You could argue the same with SSFs (which offer some great strategies as well). No other broker I know splits stock loan revenue with their clients beside IB. I guess I could study all the yields and deal with capital gains and other taxes but the fact remains, if you hold stock, IMO it makes sense to participate.
If there was actually a market that allowed you to buy SSF's, then absolutely. It's one reason I wish they'd give up on this whole asinine "we don't want liquidity" bullshit that they seem to have embraced (based on what their rep here has posted) and try to actually be a functioning market. As far as capital gain rate goes, why not just do a synthetic with options dated out a year or more?
I have a core portfolio of stocks which I tend to hold and stock yield isn't a consideration when I get into or accumulate them. I don't know if I'll hold long or short term and don't want to be beholden to a roll or a time period. What you mention is a viable strategy if spreads are tight and liquidity good but this works for this portion of my portfolio/strategy.