NY Stock Exchange Chairman resigns

rockHEAD · Sep 18, 2003

The title of this post doesn't sound too bad, huh? NYSE chairman resigns...How about this, he quits a day after it was announced he recieved a $139.5 Million dollar bonus about a month ago! Yes, almost 140 million dollar bonus!! and get this... he may get a $10 million dollar severance package! and get this... after 9/11 he got the stock market up and running after 6 days, he got a $5 million dollar bonus!

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Embattled NYSE chair quits
Contract behind Grasso salary uproar could give him $10 million severance

NEW YORK - AP - Dick Grasso is gone, and his millions with him, leaving a new, almost certainly less extravagant and likely more public era for the New York Stock Exchange.

The exchange opened today without its eight-year chairman, who resigned late Wednesday amid furor over the $139.5 million payout he received last month.

The move leaves the NYSE board of directors searching for a successor under the scrutiny of its members, critics and federal regulators, who want changes in how the world's richest market is run.

Hevesi and other state finance officials and pension managers had called for Grasso's resignation, joining an increasingly noisy chorus of politicians, investor advocates and traders who said his lavish salary undermined the credibility of the exchange, a not-for-profit, member-owned institution that also serves as a regulatory watchdog.

"In an era of corporate scandals, you can't have the regulator of the world's largest stock exchange take tens of millions of dollars in remuneration from the people he's regulating," Hevesi said. "That's a conflict of interest."

Grasso is the latest prominent figure in the business world to fall in a three-year storm of public uproar over outsized pay and questionable practices in corporate boardrooms and executive suites. That anger was fueled by the collapse of stock prices in 2000 and a string of scandals, starting with Enron Corp.

No one has suggested Grasso is guilty of the sort of wrongdoing that led to criminal charges against executives at Enron, WorldCom and other companies. But some saw conflicts of interest among board members and too much influence from the chairman, both in selecting directors and naming them to committees.

Grasso called an emergency meeting of the NYSE board shortly after the market closed Wednesday. He offered to resign as chairman and chief executive, and after some discussion the board accepted, said H. Carl McCall, chairman of the compensation committee.

Grasso is entitled to keep the $139.5 million in benefits and savings accumulated over his three decades with the exchange -- mostly since he became chairman in 1995 -- and he could get another $10 million in severance pay, according to his contract.
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Friendly Fan · Sep 18, 2003

a Wall Street guy ought to know not to violate the Pig Rule

good riddance

bnb · Sep 18, 2003

That'll learn him.

Out you go. You'll just have to get by on $140 mill. Oh, and you can continue to sit on the compensation committees of other boards. And lets work out a sererance, of course.

Grrrrr!!! No matter what your political stripe -- this sort of excess must infuriate you!

Its mega ceo's like this that give the other 2% a bad name!

haven · Sep 18, 2003

Yeah, executive salary has to be one of the real market problems out there today.

I have no problems when guys that really save companies or encourage great growth take home huge checks... but when people who have been ineffective or merely adequate take home checks that are so disproportionate to the generality of their employees (even skilled ones)... then I think something's wrong.

A problem of the wolf guarding the hen house, though I don't really know a way you can fix it. You don't want to regulate top salaries, etc... and it's not like the shame factor has much of an effect when you're banking a fortune .

Dream Sequence · Sep 18, 2003

Of course the NYSE is a private company whose shareholders decided this was fair compensation. Would I have paid him that much? I don't know enough about how much business he brought the NYSE (i.e, getting more foreign companies listed, etc.) but I figure if the shareholders (and in this case the seat holders aren't complete morons) pay him $140, they are the only that can really b**ch about it.

AroundTheWorld · Sep 18, 2003

Originally posted by Dream Sequence
Of course the NYSE is a private company whose shareholders decided this was fair compensation. Would I have paid him that much? I don't know enough about how much business he brought the NYSE (i.e, getting more foreign companies listed, etc.) but I figure if the shareholders (and in this case the seat holders aren't complete morons) pay him $140, they are the only that can really b**ch about it.
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Not really, it's the representatives of the shareholders who made that decision, so if I was a smaller shareholder, I would really be more mad at these representatives than at this Grasso dude. After all, he just took what he could get.

One of my professors cited this comment today: "Now we got the pig out of the trough, we just need to find out who filled the trough!"

GreenVegan76 · Sep 19, 2003

Originally posted by Sir Jackie Chiles
One of my professors cited this comment today: "Now we got the pig out of the trough, we just need to find out who filled the trough!"
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What a great quote!

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NY Stock Exchange Chairman resigns

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