[sokoloff]

If you act in a certain way, you are free to accomplish that for yourself. Only ever do a same-day exercise-and-sell. Never exercise early. Never exercise-and-hold. Enter into a 10b5-1 that ensures you sell any shares immediately upon vesting. I think that covers all the cases and you're protected against being taxed on paper-only valuations.

That doesn't mean that your preference should preclude other people from acting differently.

[maerF0x0]

But it does mean that one has to abandon said "fictitious" value if ever leaving a company (usually 90 days) .