The employees receive "cash dividends" that are typically lower than market rates for a salary plus the second they leave for a new job they will likely end up

The employees receive "cash dividends" that are typically lower than market rates for a salary plus the second they leave for a new job they will likely end up creatively shafted out of the difference in salary they effectively invested in good faith. Because they're not working there anymore it's "demoralizing to others" if they retain the ownership that, again, they invested a part of their salary for in good faith. You've probably heard that one before. It is absolutely outrageous to tell an employee that they're getting paid less in exchange for equity and then turn around and declare that the equity doesn't count the same as if they got paid market rates and just invested a portion of their salary.