I think I would rather be sacked outright, and if I were really trying to recapture those shares that is probably what I would do as well. Even if you get an employee to stick around after this, the hit to morale is such that it's almost certainly better for both parties that they go somewhere else anyway. Especially in this case where you're telling the person they aren't pulling their weight.

Of course, the best option is not to be such a stupid asshole, but that's not practical in every case, as we see here.