I have to share my war story of trying to get prospective employees and offering them 2000 shares, 0.1% of the company. Only to find out they someplace else that offered them 50,000 shares, because 50K > 2K.
And, no, it's not the case that I'm better off without these people.
That's an aspect I have to admit I didn't consider. What do you do if your prospective employees simply don't understand options and don't ask the right questions when getting offers? 2,000 shares of 10000 outstanding is much better than 50,000 out of 1,000,000,000. Many highly intelligent people I know simply have never had this explained to them. Maybe the solution is if you are giving them a great deal that you think can compete with any other reasonable offer, you make sure to explain thoroughly what it means and how to evaluate competing offers?
And, no, it's not the case that I'm better off without these people.