Designing executive pay packages has been called a dark art. Chief executives want to know how much the competition is getting, what kind of exotic stock option or performance bonuses they should expect, and what will happen if activist shareholders or boardroom rivals orchestrate a putsch. Developing a good package that satisfies everyone’s needs and stands up to shareholder scrutiny is rarely appreciated outside the boardroom. That's sometimes even true inside the boardroom, as some boards are, paradoxically, turning on the very compensation consultants they’ve relied on to help them find the right mix, accusing them of irresponsibly pumping up compensation levels. Still, companies are keeping compensation consultants on the payroll. As a result, the industry has grown from a handful of firms two decades ago to 50 or 60 today, with consultants tapping their creativity to engineer pay packages. We searched the landscape of executive-pay firms—boutiques such as Frederic W. Cook & Co. and Exequity and megafirms such as Mercer, Watson Wyatt, and Hewitt—to find three individuals who reflect some of the current trends in compensation consulting.

The Innovator

Frederic W. Cook, the founding director of Frederic W. Cook & Co., has been referred to as the dean of executive-compensation consultants. Over 40-plus years in the business, he has represented some of corporate America’s biggest names, such as American Express, Procter & Gamble, and General Electric. “He was one of the first ones in and is the most highly respected,” says Broc Romanek, a former Securities and Exchange Commission lawyer and the editor of CompensationStandards.com. “He’s always been at the forefront.”

Sometimes the spotlight can be glaring. In a 3,298-word front-page story last October, New York Times business columnist Gretchen Morgenson noted that Cook had advised Tyco, Computer Associates, and Pfizer, all of which have had scandals related to executive pay or benefits in recent years. She also credited Cook and his colleagues at Cook & Co. with “creating more wealth for executives over the last 20 years than any other pay advisers.” Many in the industry say that’s giving Cook, a venerable numbers whiz, a little too much credit. But he did pioneer some widely used compensation practices that have helped dramatically increase pay, including a type of stock option called the “reload,” in which the options automatically replace themselves once they are exercised, growing in value each time the strike price rises. (Reload options have recently fallen from favor because of new accounting rules.)

In recent months, Cook has taken the lead in defending executives against charges of inflated pay. He teamed up with the pro-corporate lobbying group Business Roundtable on a study that justifies high pay for execs, and he testified before Congress. “The media,” he told lawmakers in 2006, “has been flooded with a multitude of distorted, misleading, and oftentimes erroneous statistics chosen to portray U.S. C.E.O.’s and board governance in a negative light.”

Cook and his colleagues, through a spokesperson, declined to comment for this article. “They want to basically stay away from the executive-compensation issues and just kind of be a little bit low-key,” the spokesperson explained.

The Rebel

Jeffrey Hyman knows the world of marquee firms well. For three decades, he worked as an executive-compensation consultant at Hewitt. Now he routinely takes his old company and others like it to task for perceived conflicts of interest when they perform various services for the same client—an issue popular among critics of compensation consultants, in Washington and elsewhere. In many cases, the same executives whose salaries these consultants evaluate control much more lucrative contracts to manage employee benefit programs and other services, which could benefit divisions of the companies who provide the compensation consulting. Hewitt is the type of company that could find itself in this situation, although a Hewitt spokesperson says it has strict policies in place to ensure objectivity. Hyman defected from Hewitt this March to join three other colleagues at the newly founded Exequity, and he has quickly become a loud advocate for independence in executive-compensation consulting. Hyman says he left his old company amicably, but “saw the writing on the wall” and wanted to get out before the conflict-of-interest controversy hit the industry.