Hi ... That answer is NO, But .....
It all starts with "reasonableness." The IRS requires compensation packages for nonprofit executives (and other nonprofit employees, for that matter) to be reasonable.
AND they don't define reasonable, not in terms of a definition ... it comes more in the form of the "facts and circumstances" of each situation
Reasonable compensation is best understood in light of factors the IRS examines when determining whether or not a charity is exceeding reasonableness with its compensation arrangements. These factors look something like this:
There are legitimate, charitable organizations whose executives make up to, and sometimes more than, $250,000. For a very select few, a lot more. But I'll put it this way…if you have an employee whose compensation package exceeds $100,000, you better be prepared to defend it.
But, yes, if the duties of that employee and the salary are commensurate ... AND sitting on the board (even with additional salary) still allow the charity to push through more that 70% of inflow to the cause itself, you'll be in a pretty good position
Does a state's (MASS) Attorney General have the right to object to a board member being a paid officer? or is that the IRS's issue?
One more thing ... and I'll shut up and let you ask questions, but due diligence in supporting that reasonableness is key:
Due diligence is the brother of reasonable compensation. In order to have a compensation package considered truly reasonable, the figure must be the result of a substantive evaluation of what makes sense for the job. That is the responsibility of the board of directors or compensation committee. It is considered a best practice to document the method used to determine salary packages. There are various resources that can be used to come up with the information: The Labor Department, census data, job-oriented websites, national and local charities, etc. It’s best to use multiple sources.
On your question ...
That is the IRS' issue, in terms of maintaining exempt status, but the corporation itself also has to conform with the state law around the business entity itself
Organizational/entity law is a secretary of state/state statute issue
Tax exempt status is an IRS issue