NONFICTION - Dec. 22, 1991

IN SEARCH OF EXCESS: The Overcompensation of American Executives by Graef S. Crystal (W. W. Norton: $19.95; 272 pp.). The preface to this book is titled “Apologia Pro Vita Sua,” and for good reason: Graef Crystal was an executive-compensation consultant for more than two decades, and so helped create the phenomenon by which executives receive “huge and surging pay for good performance, and huge and surging pay for bad performance, too.” Crystal, fortunately, has seen the light, and the result is “In Search of Excess,” a damning analysis of the ways in which many publicly held corporations enrich their executives at the expense of their shareholders. Crystal, a business professor at UC Berkeley, names names--for pure greed, it’s hard to top the tens of millions granted to Steve Ross of Time Warner and Jeffrey Steiner of Fairchild--but more important, shows how many executives ensure that their pay is unconnected to their performance. The key ingredient, it seems, is duplicity; companies hire compensation consultants, for example, ostensibly to provide disinterested analysis of executive pay, but such consultants serve at the CEOs’ pleasure and know full well on which side their bread is buttered. If there’s any justice in the corporate world, “In Search of Excess” will change the nature of a great many annual meetings for years to come.