This is the story of how Congress, in its infinite wisdom of trying to make the world fair, creates HUGE MESSES, a.k.a. unintended consequences.
I don’t think it is that bad, is it? In a nutshell, salaries above $1 million were not expensable for tax purposes, but performance bonusses are. Stock grants are considered performance bonuses. I say “grants” instead of “options” because most companies, especially tech companies, don’t issue stock options anymore. They issue restricted stock units which vest over time. But FWIW, the TCJA eliminated the $1 million cap. So that part of it isn’t really an issue anymore.
The disconnect comes that for tax purposes the expense is logged as the value of stock on the day the grant is vested. But for accounting purposes, the expense is logged as the value of the stock on the day it was awarded. It seems like those numbers should be the same, but I don’t think it causes a particular problem unless you think corporate taxes should be higher.
The flip side of this is employees pay tax on the value on the day the grant vests, not the day it was awarded like corporations.