That's not what I'm talking about, here. The number of shares isn't necessarily going down. Its the crappy way that most startups handle the awards and the outstanding shares, making it so that the only people who actually get anything out of them are the founders and the investors.

Yes, when your probability of getting any value out of shares goes down, that's tantamount to a reduction in compensation.

Yes it is, which is why most talented engineers are avoiding startups, and instead going to the big companies, where they can get paid.