It's the $100 million question.

Does the head of a small consumer finance firm deserve to be paid more than any other chief executive of a U.S. publicly owned company?

Two institutional investors, both Chicago-based employee pension plans, don't think so. They are suing Green Tree Financial Corp. of St. Paul, claiming that chairman and chief executive Lawrence M. Coss is grossly overpaid and should give back some of his earnings from the past three years.

Though official disclosure will not be made until April, it is estimated that Mr. Coss received $100 million in salary, cash, and stock bonuses last year. He was paid $65.6 million-a $400,000 salary and the rest in cash and stock bonuses-in 1995, and he received $29 million in 1994.

The lawsuit, filed in Hennepin County District Court in Minneapolis by the pension plans for Professional Management Inc. and Greenbaum & Associates Inc., is part of a trend in corporate America.

"Shareholders have been increasingly militant about executive levels of pay," said Jude Rich, chairman of Sibson & Co., a compensation consulting firm.

Two issues-pay for top executives rising at a higher rate than others and dilution of shareholders' ownership-have caused the outcry, Mr. Rich said.

Mr. Coss is believed to be the highest-paid public company official in the nation, based on his estimated compensation for 1996. In 1995, the 58- year-old founder of Green Tree received more than nine times as much as the highest-paid banker in the Twin Cities-First Bank System Inc. CEO John F. Grundhofer.

Mr. Grundhofer was paid $7.2 million, while Richard M. Kovacevich, chief executive of Norwest Corp., made $3.8 million.

Green Tree officials defended Mr. Coss' pay, saying he earned the large bonuses as a result of the company's considerable growth. Begun in 1975 as a small mobile-home lender, Green Tree has diversified into a $3.8 billion- asset consumer and commercial finance company that earned $309 million last year, a 21.5% increase over 1995.

Mr. Coss received a bonus equal to 2.5 times pretax earnings. Half of the bonus is paid in cash and half is paid in stock. However, the stock issued is valued at its 1991 price of $2.97 a share. The company's stock closed Thursday's trading at $40.375, down 87.5 cents.

Green Tree officials said Mr. Coss' salary and bonuses are in line with the rapid growth in the company's profitability. Most of Mr. Coss' compensation was in stock, and there is an annual limit on the number of shares that can be awarded. Green Tree's stock price has appreciated 1,940% since 1988, the company said. Moreover, since 1991 when Mr. Coss entered into his employment agreement, the stock appreciated 1,200%.

"If this is not a case of excessive compensation, I don't know what is," said Karl Cambronne, a Minneapolis attorney representing the shareholders. "This is not justifiable on any standard of compensation."

But Green Tree said the suit is without merit, arguing that it has made full public disclosure of Mr. Coss' earnings.

"The driving force behind the level of Mr. Coss' compensation is the extraordinary performance of the stock under his leadership," said John A. Dolphin, Green Tree's vice president and director of investor relations.

Mr. Coss entered into a new employment agreement Jan. 1, which was approved by shareholders at the annual meeting last year. The agreement is linked to return on equity. Had Mr. Coss been under the new agreement in 1995, his bonus would have been $5.1 million, rather than $65.6 million, according to the lawsuit.

The companies filing suit are small shareholders. Greenbaum said it owns 6,400 shares, while Professional Management said it holds 900 shares. Green Tree had 137.7 million shares outstanding at yearend.

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