I have a pretend example that I think, simplified, might help:

I hire you and include the promise of shares as part of your compensation package. For retention, you get Granted in the second year, and Vested in each round of granted shares, 2 years after the grant date. The value of the grant is reportable and taxed on the W2 each time. The shares are not yours to do whatever you want with, until they Vest. You decide to sell them each as they Vest, right away. That would be Ordinary income, not Gain.