Options are great for a company where there is a lot of growth (ie. a startup). Options are horrible for a company which has no growth (ie. a fortune 500).
Options give you the ability to buy a share at the last strike price set by the board (FMV for a share). If FMV for your startup share is $0.01 and you exercise it for $20, you're walking away with $19.99 in your pocket having spent $0.01. Multiply that by 50,000 and you're almost a millionaire.
If you get an option for a share of MSFT at $35, unless the stock price goes up, you're not getting a dime. IF it went up by $20 a share, you'd be doing just as well. That's unlikely, however, given how infrequently the stock moves. If they gave you 5,000 shares instead, you'd be sitting on a (more or less) guaranteed $175,000 _even if the stock price didn't move_ instead of absolutely nothing.
The number of shares in an option grant is not necessarily the number of shares in a stock grant. You're assuming the choice is "5,000 options [for a single share]" or "5,000 shares." That's ridiculous. Clearly the shares are worth strictly more. But that's (typically) not the comparison.
Options give you the ability to buy a share at the last strike price set by the board (FMV for a share). If FMV for your startup share is $0.01 and you exercise it for $20, you're walking away with $19.99 in your pocket having spent $0.01. Multiply that by 50,000 and you're almost a millionaire.
If you get an option for a share of MSFT at $35, unless the stock price goes up, you're not getting a dime. IF it went up by $20 a share, you'd be doing just as well. That's unlikely, however, given how infrequently the stock moves. If they gave you 5,000 shares instead, you'd be sitting on a (more or less) guaranteed $175,000 _even if the stock price didn't move_ instead of absolutely nothing.