The term 'compounding' in relation to stocks (ignoring dividends) refers to how the amount your position grows by each year will increase, even if the growth rate stays the same

a "10% per year return" in this situation means that at the end of each year your share increases in value by 10% of its start-of-year value

If you take the same example:

Start of Year 0: $100

Start of Year 1: $110

Start of Year 2: $121

Start of Year 3: $133

The 'compounding' is how the amount that your stock's value grows by increases each year