As of 2011: regular employees convert to contractors (red badges) and have 12 months to prove themselves. Obviously, executives get a sweetheart deal they arguably don't deserve.
I do know I'd be "orange" or more when negotiating with Google in general, based on this kind of thing. It really is down to the CEO to make sure the whole team gets a fair deal in an exit (not necessarily the same deal, but something as far as possible for each of them).
Where it will really hurt Google is not so much acquihires (where you're doomed otherwise, especially without other options), but when there's any competition. Taking 75% as much money overall but having a great work outcome for everyone for the next 2-6 years is probably worth it, especially if you ever plan to do a startup again.
Which is sad, because Google sounds like an amazing place to work (your concerns for early-career people might be valid, but for senior people, people in infosec, or people at Google Labs, it sounds awesome).
