Until recently, that is. If the shares shoot up in value over time, the executive can reap a significant gain from the options. If the shares drop in price, the executive can simply walk away from the deal and lose nothing.
Critics say, however, that the option plans pose potential problems for charities.
In addition, they say, the image of stock options as an elite perquisite may turn off donors and invite the scrutiny of charity watchdog groups. The Internal Revenue Service has yet to declare how it views the stock-option plans. In the past, Mr. Owens noted, the I.R.S. has approved compensation methods other than simple salary arrangements. But the service still would evaluate individual stock-compensation plans using several criteria, including whether the arrangements met the government's new salary and benefit standards. Accounting executives declined to name any of their clients who offer stock options, citing confidentiality obligations and a reluctance among non-profit groups to publicize their use of the strategy.