In the harshly lit backroom of a storefront in New York City’s Chinatown, there hangs what appears to be millions of dollar’s worth of merchandise. Hundreds of bags bearing the Louis Vuitton logo are crammed onto metal hooks. The purses look nothing like the shoddy knockoffs sold for $10 on street corners. Only a close look inspection reveals that the zippers are just a bit too shiny and the leather is too rough. These fakes aren’t just sold to tourists; undercover bag dealers from around the country order them in bulk from makeshift catalogs.

Thanks in part to this backroom business, New York city was home to an estimated $23 billion counterfeit-goods market in 2003, costing the city more than $1 billion in taxes and vexing luxury-goods companies. The police have been jailing and fining vendors for decades, but the problem seems to be getting worse-the value of U.S. Customs seizures of counterfeits leaped 48% last year. Which is why knockoff favorite Louis Vuitton has stepped up its fight against the Faux. Last year it spent more than ever-15 million euros-to battle counterfeiting, conducting 6,000 raids and 8,200 legal actions worldwide. But instead of just going after counterfeit sellers-who, like cockroaches, tend to spring up elsewhere-LVMH has developed a novel legal strategy: It’s going after landlords.

Money is only part of the total rewards picture. At Advanced Medical Optics Inc.. a maker of ophthalmic surgical and eye-care products in Santa Ana, Calif.. Employee stock ownership is a key part of the company plan. “We’ve tried to encourage a culture of employee ownership” says Michelle Lodin, director of compensation and benefits, nothing that as shareholders, employees profit when the company stock goes up. “It gives people a direct line of sight on what is happening in the business.

Discounted stock purchase programs and stock options used to dominate in the area of equity rewards, but accounting changes going into effects this summer are causing some major shifts in corporate strategy. Stock options, which used to provide companies with a significant tax break, will have to show up on the books as an expense starting in the third quarter.

“Now people are looking at all the various possibilities for equity compensation,” says UBS’s John Furlong, senior vice president of corporate employee’s financial services. That means companies can more precisely tailor their program to the specific needs of employees. For example, a company may still have a stock option plan for corporate executives financially suited to the built-in risk, but opt for a more conservative program for general employees less comfortable with risk, Furlong says.