[g42gregory]

The other issue to keep in mind is that the equity compensation is also tied to the amount of risk people are taking when joining the startup. When this technical co-founder started a company the risks were very high: there was basically nothing there, no product, no team, no investors, and no customers. When the current engineers are joining, the risks are obviously there, but they are smaller risks. This would at least partially explain the difference in equity levels.

Having said that, it would be a mistake to keep this co-founder in the same technical role as incoming top notch engineers. He really needs to assume a different role: for example product strategist, technical strategist, architect, etc... Whatever would fit with his skills.

As for running him off the company, think of it this way: without his early contribution, neither you nor later engineers would have a place to work. Of course, it's a balance and he needs to step up his game and find a place in the company to be useful, enthusiastic and inspiring to other people, which commensurates with his abilities. Otherwise, he will be nudged out towards the exit.

I hope this helps ...