Why would a board negotiate such a bad deal? This seems to be a problem with many large companies, no accountablity, even to shareholders.
You know as well as I do that most corporate boards are "old boy" societies. The serve on one anothers' boards and rubber stamp the ceo. Every board has sub committees such as compensation and/or benefits but no one oversees these committees. Hell, even the large institutional stockholders are in on the game.