To continue with this line of thought, then, it would be better for retention to:<p>a) Pay an employee $2 MM a year in salary and have them spend it along the way.<p>Rather than:<p>b) Give them stock that vests in 4 years - worth $5 MM - and have them feel abruptly wealthy and quit.<p>I understand that startups usually give out equity because they don't have the cash to pay high salaries up front.  But if a company does have the choice, it seems that a vesting period on equity is the common method for keeping an employee on the hook.