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"And something I wish that companies would start doing: - Don't make vested options expire soon after the end of employment. Don't force people to take big tax hits just to buy the stock that they have earned."

That's counter to one of the main goals of a good equity comp plan - retention. If a company goes out of it's way to ensure that LEAVING the company is painless and of low cost to the employee, retention would suffer.

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But the plan should be structured so that what you earn is in line with the benefit you provide to the company. Making it arbitrarily harder to benefit from what you've already earned is unnecessarily cruel.

This is a big difference between aligning incentives and retroactively punishing behavior you don't like.

Have you earned your equity just because you put in the time, or have you earned it when you get to the finish line (when the stock is able to be traded for actual $)?

These tension between these two points of view is the source of the consternation in this area.

On the other hand, a "good" equity comp plan could lead to a toxic work environment. This even happens with people waiting out the vesting schedule on 401k's and such.

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