What's the problem?
Looks like a lot of shouting over a perfectly normal situation. Stock options are a kind of compensation - for the corporation it is an expense just like the employee's salary is. Your salary and benefits are deducted from the company's income before calculating taxes (I gloss over payroll taxes here). You, the employee, get taxed on salaries and benefits. Nothing special here.
To clarify, the company's expense occurs when the option gets exercised - basically the company gives a share worth $X to the employee (executive or not) who pays $Y, where Y < X, so the company incurs a net "loss", and the employee benefits. Executives get taxed, generally when they sell the share for $Z and realize the profit or $(Z-Y) - this is no different from buying a share (at exercise) and paying capital gains. Non-executive employees or contractors or consultants who get "non-qualified stock options" are taxed at exercise - $(X-Y) is taxed as regular income - and later when they sell the share - $(Z-X) is taxed as capital gains. Executives may get their "alternative minimum tax" (all the companies mentioned are in the US) triggered at exercise as well.
Bottom line: whatever the details are the income is taxed and expenses are deducted, and overall the "transactions" related to compensation are taxed - I absolutely do not see what is so special in this case. Everybody is free to scream that whatever is not taxed today should be taxed, and whatever is taxed today (the usual situation) should be taxed at a higher rate. Point is, any attempt to present this situation as fundamentally abnormal is total bulls**t, IMHO.
Disclaimer: I am not an accountant or a tax attorney.