RUNAWAY executive pay generates more shareholder rage than any other corporate issue today. So far this year, almost 40 percent of the proposals to be voted on at annual meetings relate to how much the corner-office crowd pulls down, according to the Investor Responsibility Research Center in Washington. That is up from 19 percent two years ago.

But even as shareholders' ire rises, so, too, does chief executives' pay. As the most recent numbers show, compensation for the boss remains stuck on the up escalator. Granted, the rate of increase may not be as high as it was previously, and some chief executives took a pay cut this year. But for the most part, critics say, this year's figures prove that the compensation committees of corporate boards are still in a bounteous mood.

Given human nature, few expect executives themselves to lobby for lower pay. And because boards seem reluctant to rein in compensation, some critics conclude that the system is irreparably broken.

"One of the things you are supposed to do when you rise to a leadership position is to be an exemplar, and a man who rises to be an exemplar should not be fanning the flames of envy," said Charles T. Munger, vice chairman of Berkshire Hathaway and chairman of Wesco Financial in Los Angeles. "But now people are afraid they will leave something on the table; there will be one damn perk that somebody else has that they don't have. They just want every last nickel."

Yet there are some corporate executives who do not grab for every last perquisite, who embrace the concept of enough rather than ever more. James D. Sinegal of Costco Wholesale is one. His pay package seems a throwback to another era, especially when compared with the lavish compensation of Henry R. Silverman of Cendant. A look at those two chief executives provides a stark contrast in how American companies are approaching compensation for their leaders these days.

Costco's Old-School Chief

When it comes to pay, Mr. Sinegal, president and chief executive of Costco, the warehouse retailer based in Issaquah, Wash., seems to inhabit an alternate universe. His salary last year, $350,000, was not much different from the $300,000 he earned 10 years ago. He received 150,000 stock options last year but has refused a bonus in each of the last three years. The terms of his employment contract could fit on a cocktail napkin.

As a Costco founder, Mr. Sinegal, 68, has amassed an enormous stake in the company: three million shares. At current prices, his holding is worth $113 million.

"What is striking about Sinegal's compensation compared to various other C.E.O.'s with $100 million-plus stock positions, is that he hasn't sought a full competitive pay and severance package as part of having enough skin in the game," said Brian Foley, an executive compensation expert in White Plains.

Mr. Foley said Mr. Sinegal's salary, bonus and realized stock option gains over the last 10 years totaled less than $11 million, or an average of $1.1 million a year. Adding the value of his unexercised options at the end of the 2003 fiscal year, the salary, bonus and stock options total $25 million over the decade. Several chief executives - including Mr. Silverman of Cendant, whose remarkable pay package is examined in detail later in this article - made more than double that amount last year alone.

"By today's standards, Sinegal's compensation clearly seems skinny for a company whose stock price has roughly quadrupled," Mr. Foley said.

In the most recent proxy, members of Costco's compensation committee describe Mr. Sinegal with a word seldom heard in connection with chief executive compensation: "underpaid.'' The committee members are Hamilton E. James, vice chairman of the Blackstone Group, an investment firm; Jill S. Ruckelshaus, a director at the Lincoln National Corporation; Mr. Munger; and Benjamin S. Carson Sr., director of pediatric neurosurgery at Johns Hopkins University. Each makes $30,000 a year for serving on the board and receives options on 12,000 shares of stock, as all Costco directors do. The committee does not employ consultants to determine executive pay at the company.

"Jim is a highly ethical capitalist of the old school," said Mr. Munger, a Costco director since 1997. "He's not in some lofty place where he's sitting around with compensation consultants. He must visit hundreds of stores per year; he's mixing with the troops. If you were to rank retail executives, I would say Sinegal would be in the top 10 of the last century, as far as talent and work. And it's there in the numbers."

A 2000 survey by Towers Perrin, the consulting firm, found that the pay of chief executives, on average, was 531 times that of their lowest-paid rank-and-file workers. But Mr. Sinegal's salary is less than 10 times that earned by his company's top hourly employees and roughly double the salary of a Costco warehouse manager, he said.

"But bear in mind I have been rewarded by the stock," he said. "I rejected my bonus because we had a couple of years where we hadn't performed up to our standards. We were more profitable than the year before, but we didn't hit the standards we had set for ourselves, so we didn't think we were entitled."

While Mr. Sinegal keeps a lid on his own pay, his company is known for providing salaries and health care benefits to lower-level workers that are higher than average for the industry. For example, Mr. Sinegal said, a forklift driver at the company typically makes more than $40,000 annually, after three years on the job. And Costco pays 92.5 percent of employees' health care costs.

"We just believe firmly that if you're taking care of your customers and taking care of your people, you're not too far off target," Mr. Sinegal said. "The profits will come and you'll be successful."

One measure of how this approach succeeds is found in the rate of theft by customers and employees at Costco stores - what the retail industry charmingly calls shrinkage. Mr. Sinegal says such losses run under two-tenths of 1 percent at Costco each year. Other companies have 10 to 15 times that amount of theft.

Unlike many other chief executives, Mr. Sinegal has not sold a great deal of stock over the years. George Muzea, an expert in insider sales at Muzea Advisors in Reno, Nev., said Mr. Sinegal had made just six trades since February 1998, selling stock worth $37 million over the period.

Mr. Sinegal attributed his work ethic and management philosophy to his mother and father and a Catholic school education. An important mentor was Sol Price, founder of Price Clubs, a warehouse retailer that merged with Costco in 1993.

"He clearly taught me everything I know about the business,'' he said of Mr. Price. "When we started Costco, the idea was to build an organization that would have strength and be around for a long time. There was never any exit strategy, and that gives you a different mind-set off the bat."

Mr. Munger called Mr. Sinegal one of a rare breed of chief executives who are worth far more than they are paid. "Here's Sinegal," Mr. Munger said. "Not part of a Wall Street scene in any way. He just has a moral compass. He has that old-fashioned idea that being an exemplar is important."

But Mr. Sinegal countered that it is just good business. "If you're going to say to all the people that you're working with, 'We want you to treat the customers honestly; don't lie and don't cheat,' it is somewhat hypocritical if you're not following the same rules," he said. "Everybody is watching you every minute anyways. If they think the message you're sending out is phony, they're going to say, 'Who does he think he is?' It's again good business. But it is also an obligation."

Cendant Piles It On

IF Mr. Sinegal's compensation is skinny, then corpulent is the word that comes to mind when considering the pay bestowed on Mr. Silverman, the chairman and chief executive of Cendant, the travel, real estate and direct marketing concern.

Last year, Mr. Silverman received salary of $3.3 million and a bonus of almost $14 million, and he realized $37 million in options gains. But the company did not stop there. In 2003, Cendant shareholders contributed $1.025 million to Mr. Silverman's pension plan and paid premiums of $4.574 million for a $100 million life insurance policy.

"Salary is clearly excessive, the annual bonus is excessive, former grants of stock options were clearly excessive, and the provision of life insurance is also excessive," said Paul Hodgson, senior research associate at the Corporate Library, a governance research organization in Portland, Me.

Cendant also takes pains to ensure that Mr. Silverman, who has been chief executive of the company and its predecessor, HFS Inc., since 1990, receives each and every nickel to which he is entitled. "Due to an administrative error," the company's most recent proxy said, "Mr. Silverman was underpaid by $50,000 in 2002 and a payroll adjustment was made in 2003." The $50,000 that the company hurried to reimburse Mr. Silverman amounted to less than half of 1 percent of his 2002 salary and bonus.

Although he received no options last year, he has gotten so many grants over the years that the value of his unexercised options holdings totaled $287 million at the end of last year. He owns 41.6 million Cendant shares, or 4.07 percent of the stock outstanding. At recent prices, that stake is worth more than $1 billion.

The terms of Mr. Silverman's 10-year employment contract, struck in July 2002, are similarly lavish, Mr. Hodgson said. The contract ensures that the company will provide - for life - medical and welfare benefits, office and clerical support, use of corporate aircraft on terms applicable to senior executives of the company, access to a corporate car and driver, appropriate security when traveling on company business and reimbursement of any properly documented business expenses.

Even by today's standards, 10- year contracts, especially those with guaranteed salaries and bonuses like Mr. Silverman's, are highly unusual in corporate America. A study by Equilar Inc., a compensation analysis firm in San Mateo, Calif., of executive employment contracts at 70 large companies found that only 1 percent of the agreements carried 10-year terms. The average length is 3.1 years.

Fewer than half the contracts studied by Equilar - 45 percent - had a minimum salary guarantee, and only 16 percent had minimum guaranteed bonus arrangements. Mr. Silverman's bonus deal is set up so that he is guaranteed annually as much as $100,000 for every penny a share that Cendant earns.

Then there is the post-retirement consulting arrangement that gives Mr. Silverman $83,000 a month (or $996,000 a year) for as long as he lives. In exchange for this pay, Mr. Silverman has agreed to provide advice and services to Cendant for no more than 90 days a year.

"This level of benefits is more appropriate for a lord and his fiefdom, rather than the C.E.O. of a publicly held company," Mr. Hodgson said.

A Cendant spokesman declined to make Mr. Silverman available for an interview and said he would not comment on the executive's pay.

But Leonard S. Coleman, the Cendant director who is also chairman of the compensation committee of the board, made this statement: "The compensation package is a reflection of the belief and foresight the board of directors had in 2002, altering terms of payment from being equity heavy to direct compensation, and its belief that Mr. Silverman's continuing vision and management would bring even greater rewards to the Cendant portfolio. The company's outstanding performance this past year inarguably proves that the board was correct.

"Mr. Silverman's compensation is a reflection of the board's respect for his vision, business model and management skill," Mr. Coleman added. "The Cendant model was Mr. Silverman's creation and his direct and continuing hands-on contribution is invaluable."

Mr. Coleman also noted that Cendant's stock in the last two years has outperformed broad market indexes by more than 10 percent.

The Cendant proxy for 2003 said that Mr. Silverman did not receive a salary increase during the year, even though his employment agreement entitled him to a 3.3 percent increase, and that he gave up $46 million worth of options he could have received under the contract. Mr. Foley, the compensation expert, called that a significant giveback, but he said, "At least for now, it seems to pale when compared to the option grants he got on 12 million shares from 1999 through 2001, his $260 million of realized option gains for 1998 to 2003 and the $287 million of unrealized option spread as of Dec. 31, 2003."

Mr. Silverman's pay has stirred up some shareholder outrage. The Catholic Equity Funds, a mutual fund concern that owns Cendant shares, submitted a proposal that would require the company to limit Mr. Silverman's compensation to 100 times the average compensation paid to the company's nonmanagerial workers in the previous year. Under the proposal, the chief executive would be entitled to more than that amount only if the company achieved one or more goals mainly reflecting his contributions.

In a letter to the Securities and Exchange Commission asking it to keep the proposal from being voted on by shareholders, Eric J. Bock, Cendant's corporate secretary, said that if Mr. Silverman's compensation were capped at 100 times the salary of nonmanagerial workers, he would receive $2.7 million even though his contract guaranteed him $3.3 million plus a bonus. In attacking the proposal, Mr. Bock wrote, "How will the company distinguish between those achievements stemming from 'the C.E.O.'s contribution' versus those that are the result of favorable economic conditions or other factors?"

Cendant shareholders will vote on the proposal at the company's annual meeting on April 20 in New York. The company advised shareholders to vote against it. "The proponent's arbitrary and formalistic pay cap proposal would restrict the compensation committee's role in engaging in the complex analysis necessary to determine appropriate compensation levels," the proxy said.

Daniel J. Steininger, chairman of the Catholic Funds and author of the proposal, said: "It doesn't take a rocket scientist to understand you create an imbalance in the corporation when you see these kinds of excesses at the top. And why can't Cendant explain why it is the C.E.O. should be getting this extravagant amount of money? Is he another Bill Gates?"

At a news conference this Thursday, Pat Quinn, the lieutenant governor of Illinois, plans to urge all of the state's pension funds to vote in favor of the proposal, he said. "We want to make sure the companies we are investing in are compensating their leaders in a way that is reasonable and there are some objective standards in determining whether the pay of the C.E.O. is related to the performance of the company," Mr. Quinn said. "We shouldn't stand by the side of the road when we see things that are clearly not in the shareholders' interest."

THE compensation committee responsible for Mr. Silverman's pay has been led since 2000 by Mr. Coleman, who was also a director of HFS from April 1997 until December 1997. He is a senior adviser to Major League Baseball. Other members are Robert F. Smith, chairman of American Remanufacturers Inc., a Chicago automobile parts remanufacturer in which he is an investor; and Myra J. Biblowit, president of the Breast Cancer Research Foundation.

Along with other Cendant directors, the members of the compensation committee receive $160,000 a year, half in cash and half in Cendant stock, which is put into a deferred compensation plan. The company has also bought a $1 million life insurance policy for each director, as well as a $100,000 term life policy.

Mr. Coleman, as chairman of the compensation committee, makes an extra $20,000, while the other members of the committee make $10,000 each, again divided equally between shares and cash.

Even as Mr. Silverman prepares to meet his shareholders at the annual meeting, jury selection will be under way in Hartford in the criminal trial of Walter A. Forbes and E. Kirk Shelton, the former chief executive and president at CUC International, a company that acquired HFS Inc. in late 1997. The merged companies became Cendant; the two men are accused of accounting fraud that ultimately cost investors $19 billion.

Late last year, Mr. Silverman took the stand at another criminal trial. That case involved Monty D. Hundley, a former owner of Days Inn of America and a principal at Tollman-Hundley Hotels, who along with his partner Stanley S. Tollman, a fugitive assumed to be living in London, sold their company to HFS in the early 1990's. Mr. Hundley and three other executives at the company were convicted in February of a $100 million bank fraud.

Under the terms of the sale of their hotel company to HFS, the executives were to receive more than one million HFS shares in total, if the hotels did well. At the trial, prosecutors showed that Mr. Hundley and Mr. Tollman had sold more than $100 million worth of HFS stock from 1993 to 1995.

AROUND 1994, Mr. Silverman testified, Mr. Tollman offered to share some of those gains with him because the deal had been such a success. Over time, he told the court, he received more than $3.5 million from Mr. Tollman. Mr. Silverman testified that he gave some of this money to Martin L. Edelman, a Cendant director and a lawyer at Paul, Hastings, Janofsky & Walker in New York for help he had provided in the arrangement with Tollman-Hundley. The Cendant chief also donated $1 million of it to charity, according to his testimony. In 1994, Mr. Silverman, who was then the chief executive of HFS, earned a salary of $1.4 million.

The Cendant spokesman declined to comment on why Mr. Silverman would accept Mr. Tollman's offer to share personally in profits from a deal that was struck by his company, HFS. Mr. Edelman did not return a phone call seeking comment.

As for Mr. Silverman's more recent compensation, Mr. Foley, the executive pay expert, said of Cendant: "It's the supersizing that stands out. The quadruple witching, heavy-on-the-gravy impact of big cash compensation plus huge stock options, plus huge life insurance benefits. And this on top of an unusually long, 10-year employment agreement with balance-of-the-term severance rights."

Mr. Munger said he thought the never-ending escalation in executive pay was bound to create a backlash. "By the way, we believe in high pay for superior performance," he said. "But if you let it go just crazy, people find it deeply offensive. It's terribly contrary to the wider civilization to have this stuff go on and on."