You're giving away 5% of the pre-tax value, but that only translates to 2.5% net for those at the receiving end here. One key distinction with options is that

You're giving away 5% of the pre-tax value, but that only translates to 2.5% net for those at the receiving end here. One key distinction with options is that they can be more tax advantageous if the employee exercises and holds their stock for more than one year, triggering long term capital gains (LT cap gains may or may not exist in the future, though).