I think the point is that there is same-year tax liability on the $5M value, but there is no guarantee on getting the $5M payout that same year (or ever, for th

I think the point is that there is same-year tax liability on the $5M value, but there is no guarantee on getting the $5M payout that same year (or ever, for that matter). When you exercise your options, you now hold shares in a private company, which may restrict your ability to realize the payout in various ways.