I had an ESOP compensation component at my old company as well, although we were able to rebalance into any of the other investment options annually, which I did because it absolutely is dangerous to have a bunch of money in an individual company’s stock. It’s even more dangerous to have that same company also be the one that you rely on for your salary. Personally, I think it’s irresponsible of companies to restrict reallocation like yours is doing, but I digress...
Since you can’t get it out until you quit and after a 5 year waiting period, and over a 5 year buy-back period, I think you’re spot on with not considering its entire value in your FIRE planning. But completely ignoring it is too conservative.
What I would do is consider its value at the lowest price per share over the last rolling 7.5 years. I chose 7.5 years because that is the average time from when you quit that you can sell any given share (buyback starts at 5 years and finishes at 10 years). And I would absolutely be converting it into total stock market index funds the moment that I could.
I think this should still end up being quite a conservative estimate. If you wanted to be less conservative, you could value it at the average price per share over the last rolling 7.5 years, but I personally prefer being conservative on these calculations.