So, most FAANG employees are not allowed to trade in derivates that short sell their own stock, which I figure is half insider trading protection and half ensuring equity compensation actually works.

However, I've often wondered if those employees could still offload some of the assumed risk of portfolio concentration by investing their free investable cash in, say, their own SP499: every company in the SP500 except the one they work for. Though I suppose you'd have to have a pretty big net worth to fully offset unvested shares this way.