I can see how you may have genuinely mis-interpreted the BOD...

I can see how you may have genuinely mis-interpreted the BOD sale, ask your accountant for confirmation. I think the logic in the ruling is, if companies want to pay directors with shares, it should be taxed in the same manner as cash, otherwise loss making companies could take advantage and essentially screw the government - IMO. As for the pain faking, I dunno, whatever. If I have dementia I'll be proud of my future self if I can fake pain to get a hit of some Michael Jackson.
Perhaps look at the upside, I'd hate for you to benefit here, but I think post raise there will be a buying opportunity.