[dmk23]

The only problem with such "justified" models is that it always comes down to what everyone thinks of everyone else's value to the company. For example -

1) A first employee might feel he should have been a founder

2) Two co-founders who might feel the 3rd one has not contributed enough to justify their share

3) Employee/contractor #20 (or whatever it is) at Facebook who painted graffiti on the walls ended up with a package worth $100M while it is hard for anyone to say with a straight face they actually created that much value (i.e. what is the reason for granting equity by job role)

4) Sizing of equity grants to engineers vs. sales staff, given that salesforce's primary motivation should be based on hitting their quotas with all incentives built around that

5) Someone fired a few months before the vesting cliff might think they are being cheated, while the company might believe they have been toxic to the culture (I won't name any examples here)

6) Employees "resting-and-vesting" at pretty much every level of the equity grant cohort

7) Later employees who end up carrying the weight of the earlier ones without comparable rewards

In every deal it all comes down to a willing buyer meeting a willing seller. Compensation packages are no exception.

[gibybo]

I think you misunderstood the article. It's not about choosing how much to compensate someone. It's about how to allocate equity given a known compensation total.