> Dan tells me that he plans to hold on to his Facebook shares. He's going to sit on the nest egg while it grows and matures. He'll slowly nourish it with solid technical contributions until it turns to a small fortune. Facebook, he says, is valued at a small fraction of what it will be in 5 years.

First, if Dan's thesis is right (Facebook "is valued at a small fraction of what it will be in 5 years"), you don't need to work at Facebook to profit. You can invest in FB shares, or even long-dated options, and let folks like Dan do all the hard work.

Second, the real question for Dan is how much of the dollar value of his equity compensation he should hold in FB shares. If Dan has $50,000 in investments, virtually all of which consist of FB shares, that's problematic, even if he believes strongly in his thesis.

> You should think of the grant as cash compensation. If you decide to not sell the stock immediately, this is equivalent to taking out a portion of your paycheck to buy stock in your company.

This is spot on. That doesn't mean that employees shouldn't retain some of their shares, but they should consider whether they'd purchase the same number of shares if they had a pool of cash to invest.