'Qualified dividend' treatment only requires a 60 day holding period.

Also, those with founders shares have almost certainly held (via an 83b election) the shares long enough for long-term capital-gains treatment, as well. If you're saying that yes, the dividend treatment may save them on taxes (or at least be no worse) than other approaches, we agree.

For employees who might have to exercise vested nonqualified options to collect the dividend, other ordinary income taxes may apply... but shares that were early enough could still be in a dividend-is-more-than-all-exercise-and-tax-costs situation, again making the participation a riskless no-brainer... in fact helping them set an earlier start date for future capital-gains calculations.

If they're not in the no-brainer situation, they'd have to decide whether the dividend and early-holding-period-start was worth the cost/risk of converting to actual equity. That's a matter of tax law and risk-affinity... any dilemmas created by having a new range of possible choices aren't a knock against the offer of a dividend.