There are no rules around free agency compensation. The AFL simply apply whatever they like to each situation.
No matter what McKay is offered, North will get a top 3 pick because it’s the AFL’s way of giving them a priority pick by stealth. Just as they did when James Frawley left Melbourne.
There’s no rules in place to stop it - they just do whatever they like.
Frawley was an AA, a top 3 player at Melbourne and the Hawks gave him a massive contract. The AFL also screwed Melbourne by ruling him as an unrestricted FA so we weren't able to match a bid player even though he was in the top 3 highest players at the club, the AFL did this because his contract was front loaded and low in his final year.
What has McKay done? He's a plodder, never been an AA and never been in the top 3 of their BnF
McKay is nothing like the Frawley situation.