Peter Cohen, fired as chairman of Shearson Lehman Hutton Inc. shortly before the firm reported one of the biggest losses in Wall Street history, won't be leaving empty-handed: He'll get a check worth $10 million.

As part of a severance package he arranged when he stepped down as head of the country's second-largest brokerage firm, Cohen will receive $2.6 million in cash, an office with a secretary, a consulting contract worth several hundred thousand dollars, and stock and options worth millions of dollars that he accumulated over his 20 years with the firm.

According to sources familiar with the situation at American Express Co., which owns Shearson, the package was not excessive given Cohen's long history with the company and considerable role in building the firm. It roughly equals one month's salary for every year he worked there, the sources said.

Cohen is the latest in a long line of executives who have reaped huge sums in recent years despite the myriad financial problems at the companies they left behind. Although Wall Street has always been known for rewarding a job well done, the excesses of the 1980s are showing how it was sometimes willing to pay for a performance that didn't work out.

Drexel Burnham Lambert Group Inc. doled out $270 million in bonuses and stock to top executives just days before filing for bankruptcy in February. Retiring General Motors Corp. Chairman Roger B. Smith presided over a huge decline in the automaker's U.S. market share but will see his pension doubled to $1.2 million as part of a plan recently approved by GM's board.

"Corporate America traditionally has paid people well who don't do well," said Joseph A. Grundfest, professor at Stanford Law School and former commissioner at the Securities and Exchange Commission. "I think corporate America would run better if pay and performance were more closely linked."

On the other hand, Grundfest said, "The question is, did Peter Cohen run Shearson into the ground? Shearson ran into rough spots at the end, yes, but it wouldn't have been where it was at the top at all without Peter Cohen."

Indeed, Cohen was for years riding the fast track at Shearson. Serving as the number two man to Shearson's former chairman, Sandy Weill, the brash, highly ambitious Cohen helped build Shearson into a powerhouse second only to Merrill Lynch. When he took over as chairman in 1983, at the age of 36, he continued in an expansionist vein, stunning competitors by buying Wall Street's oldest partnership, Lehman Brothers Kuhn Loeb.

Lehman was a firm steeped in a staid, culturally sophisticated tradition, a sharp and difficult contrast to Shearson's -- and Cohen's -- rougher, less polished style.

Eventually, the growth began to bleed the bottom line and put Cohen at loggerheads with his boss, American Express Chairman James D. Robinson III.

Now people debate whether his total track record or his most recent performance should determine his severance pay. "Someone should figure out all the money he's made for the company over the years," said an investment banker at a competing Wall Street firm. "Even with the recent losses, Shearson comes out ahead." But, he said, "The economy marks hard. It's not like in school where you can be graded on a curve."

An aide on the House committee that oversees the securities industry, while acknowledging Cohen contribution to Shearson, said, "But he's also the guy who presided over the firm's biggest mistakes."

One of those mistakes was his failure to win out in the bidding to finance the leveraged buyout of RJR Nabisco, Wall Street's biggest deal yet. He also was highly criticized for buying troubled E.F. Hutton in 1988. Since then, American Express has been forced to pump nearly $1 billion into the troubled subsidiary, which reported a record loss of $915 million for the first three months of 1990.

Cohen's rich compensation package was not out of line with those offered by rival firms during the 1980s, when cutthroat competition and a go-go mentality forced companies to pay a high premium for talent, analysts said. It is similar to ones American Express has negotiated for other executives with Cohen's stature and length of service at the firm, sources familiar with the company said.

Michael C. Jensen, a management professor at Harvard, said that while recent research indicates corporations in general do a poor job of tying pay to performance, investment banking has proved to be an exception. Wall Street salaries move up and down depending on the profits of the firm in any given year, he said. "In the 1980s, there were lots of good years."

Under the terms of package, Cohen cannot discuss Shearson or sue the firm, a provision that some have viewed as a way to gag criticism and in essence send a key insider away happy, or at least less disgruntled.

Cohen, perhaps not surprisingly, had no comment yesterday.

Cohen earned a reputation during his 20 years at Shearson as a master negotiator, tactician and ruthless hatchet man rather than as a trader or investment banker. It is fitting, some Wall Street executives note, that after the ultimate hatchet man was given the ax himself in January, he managed to negotiate such a handsome severance package from the company he is blamed for running nearly into the ground.

Said one stock trader on the floor of the New York Stock Exchange upon hearing the news: "Ten million bucks for wrecking the company? Nice work if you can get it."