Wouldn't a lot of people start demanding "perks" like free cars, food and housing in exchange for lover monetary pay? Wouldn't this possibly undermine the fund as the ones with the higher salaries are in a better position of negotiating these deals?
This is already happening to avoid the income tax.
That's tax fraud. Call the IRS and turn in whoever is doing this; you will get a portion of the misreported funds as a bounty.
It used to be that stuff like company cars didn't count as income. That was back when we had income tax rates of 70% and 90%. It was trivial to avoid those taxes for a dozen reasons, once being that compensation that wasn't cash was not taxed.
Now, any kind of compensation [1] is taxed as income.
[1] except health care, for no good economic reason.
1. http://www.mercurynews.com/business/ci_22982220/irs-is-looki...
In Aus (and UK, I believe) you can "salary sacrifice" something like a car, phone, or computer. Essentially the employer buys it for you and just deducts payments from your paycheck towards it. It isn't income to you, but there is a fringe benefits tax. Some items, like computers and phones, are exempt from this tax though.
As a result very few have any real perks, except free cell phone. At list it makes it easier to compare job offers :)