How important was his contribution to future free cash flow?
Might you need his help again in the future?
What does he think is a fair reduction in equity and payment for past services?
What do your investors think about this transaction?
Does he have anti-dilution rights?
If you do go through with this transaction, please consider not making a payment in current cash but instead making a conditional payment in the future based on the company successfully reaching certain free cash flow criteria, and then only a payout over time. Talk to your investors and get their advice. They may have other suggestions that fit their objectives. Remember, that in taking in new money, assuming he does not have anti-dilution rights, you can also structure the deal in a way that he becomes diluted to the percentage you think is fair. This can, or cannot at your option, be combined with some fair future conditional payout.
There are many ways, it is a common situation.