Firing and contracting out are the type of actions someone at many companies would take faced with equity requirements. The type of organizations that actually put equity requirements in place by choice are not going to do those things (any sensible auditor would not allow "contractors" to fake follow the rules).

When rules on equity are put in place for political reasons (say to pretend bailout for too-big-to-fail banking executives) then all sorts of not actually following the rules will be done. Those organizations normally have no interest in equity they are run by kleptocrats and the kleptocrats will just do things you suggest and act like those things matter (pretend that if the job is done by a contractor that means the job doesn't count...).

I don't actually think 10 times the lowest pay makes much sense. But the choice of this of being run by the kleptocrats in control of most treasuries today I would accept this 10 times rule. It isn't that I think it is a good rule, I just feel it would be less horrible than the kleptocracy mentality in place now.