In my understanding, there's huge tax penalties, both to employer and employee, for giving employees in the money options. Thus options have to be granted with

In my understanding, there's huge tax penalties, both to employer and employee, for giving employees in the money options. Thus options have to be granted with a strike that is fmv or something approximating it. Excessively sandbagging the valuation would, I think, be consider doing the above. Further, you don't think businesses are averse to golden handcuffs, do you?