We had the plan vetted by lawyers and accountants. It's a taxable event should it trigger, but by then you have money to pay the taxes. It's not taxable at its implementation.
Equity compensation schemes are like programming language manuals and spellbooks of eldritch power: every word in here can kill you.
In a max-tax scenario (high-tax state like California, expiration of the Bush tax cuts in 2013), the bulk of a large exit would be taxed at about 53% if ordinary income, but only about 33% if long-term capital gains treatment can be obtained. So they'd be netting about 30% less due to the 'bonus' approach rather than equity.
(I'm counting medicare tax, which no longer phases out any income, but not social security, which isn't collected on income over ~$107K.)