When steerer tube hadn't been cut and put spacers above the stem but compresser plug would stay the same position.
Whether the Threadless stem system utilizes an expansion plug (the more commonly used term for what you refer to as "compression" plug), or a star nut as means of tightening a top cap down to load the systems bearings, you want to achieve a gap between the top of the forks steer tube and top of the stem or upper most spacer above the stem of 3 to 5 mm. Typically an expansion plug is used when the fork features a carbon fiber steer tube. The expansion plug is used in these situations for a couple reasons. First, is because the design of a star nut is such that to be functional, the outside of the nut flanges have to dig in to achieve the grip necessary for the top cap bolt to pull against. This design is fine for alloy or steel steer tubes, but carbon fiber needs to stay intact to maintain its strength and integrity and something that gouges the carbon fiber--especially something that may be subjected to repeated installations and adjustments--would not be advisable. Thus, an expansion plug is utilized to provide resistance for the stem cap bolt while leaving the carbon fiber of the steer tube intact and undamaged. Secondly, and as important when using a carbon fiber steer tube, is that the expansion plug will act as a support for the carbon fiber when the stem clamping bolts are torqued up. This is what holds the whole system together--the squeeze of the clamping action of the stem upon the steer tube secures the front end of the bike in a Threadless headset system. Carbon fiber is very strong against bending forces, but not so much against compression forces. Where a metal frame may get a ding or dent from a sharp lateral contact, a carbon fiber frame may crack. Even if the damage involves just the resin and a bit of the carbon fiber (not a true "crack" in the common sense of that word), this damage can weaken the integrity of the carbon fiber. This then can grow as the surrounding area delaminates and further weakens in a larger and larger area. At any rate, the compression plug also acts as support against the squeeze of the stem, and thus should be just a few millimeters from the top of the steer tube, but also in the area where the clamp force of the stem is countered. This aspect puts a limit on how many spacers can be placed above the stem. For what it's worth an just my opinion, more than 10-15mm of spacers above the stem starts to look ridiculous and will then be out of reach of most stock stem cap bolts if the compression plug is placed correctly within the stem clamping area.