Well, yes. But the possibility of this excess was part of equity compensation in the first place, and came with the possibility (probability!) of compensation

Well, yes. But the possibility of this excess was part of equity compensation in the first place, and came with the possibility (probability!) of compensation less than their contribution. IANAL, but if the termination is motivated by the success of the equity gamble the employee took up front, that looks more like breach of contract. Don't want to keep them? That's fine, but pay what you promised you'd pay.