The founder (or any employer) has a responsibility to shareholders to pay employees as little as possible. An employee has responsibility to themselves (and their family) to ask for as much pay as possible. Negotiation is about finding a middle ground between those interests. Holding an employer responsible for figuring out what a given employee will be happy with is strange, to say the least.
And as little equity as possible, for identical reasons.
An employee is responsible for making sure the terms agreed on are ones they're happy with, not an employer. An employer has a legal obligation to shareholders to minimize the costs of her business, one in direct conflict with "being generous in compensation" to her employees.
Although in this case we have an engineer who was all three of employer, shareholder and employee....
And you're wrong about "minimize costs" per se. The employer has a obligation to maximize shareholder returns, for which a simplistic application of the "minimize costs" principle is seldom a solution.
Being any more generous than you need to be to attract good people and get them to work hard is being too generous, hence, not a good business decision, hence, the founders would not be "good" founders.
"felt (mostly) left out of the party" is perhaps accurate, although the engineer in question was one of the four founders (see my longer recent item in this thread).
Based on what happened to him I'd have to wonder if later employees got much more than beer money.
