I totally agree this needs rethinking. Employees have so many alternatives, if you really want them to be part of your company you should be willing to give enough stake to earn it if they really contribute.
The balance between founders, VCs, and team could certainly be weighted better towards team.
That said — the thing that employees have as their benefit is flexibility. They can leave at any time. I am one example who spent a few years and vested at several different companies.
The four year grants are a challenge too — it gets all set up front before the employee starts. If the employee doesn’t perform to expectations, and someone newer and later does, then it is hard to shift balance. Also after 4 years the employee is not compensated for same level so the incentives to stay change radically on year 4 + 1 day.
I wonder if there is a way to restructure grants so they can be much larger (2–3x current grant sizes — and founders and investors would be willing to give away more of company) but they are longer to fully vest (8 years? 10? Acceleration at ipo) and more back loaded (you get increasing amounts of grant each year you stay)
This way the people that join know that if the company grows big and they play a role they will own a meaningful part of it.
It seems worth a shot to reinvent this. Engender more commitment and loyalty from employees and share the rewards better if everyone wins together