Taxes. Income tax is owed on the value of whatever is granted. If an option is granted with a strike price equal to the fair market value for the stock, then there's no income tax owed. This is also the reason it's important the company chose FMV in a way that wont get disputed later. Because back taxes and penalties are a bear.

Some do grant RSUs (restricted stock units), which are usually taxable as income when you receive them.

This isn’t correct. Double trigger RSUs (which are handed out by pre-ipo companies) are taxable on liquidation event.

Handing out stock is taxable to the employee at the moment it's handed out, even though (for non-public companies) they can't sell it. It'd be ruinous to give an employee $1M of startup stock, since they'd owe around 400k tax on it.

So the standard is to hand out options with a strike price equal to the current fair market value. The employee eventually gets the upside, but not the downside.

Some do. See the differences between RSU's and stock options.

It's so they can make the employees pay the taxes later, rather than paying taxes up front as most companies do for RSUs.

As an employee, you want RSUs, not options.

I general, no, you don't.

Your startup RSUs won't trigger until there's a liquidity event, at which point _you_ are responsible for taxes. The RSU value will be taxable as ordinary income.

With options, the "bargain element" is only taxable as AMT income. For options for early stage companies, this improved tax treatment _generally_ makes them better.