[NYSE]"Grasso to forfeit added $48 million in pay
By Meg Richards
Associated Press
NEW YORK - Pressed by regulators to explain the lavish pay for chairman Richard Grasso, the New York Stock Exchange revealed an additional $48 million in deferred compensation Tuesday but said Grasso would forfeit it -- after a payout of nearly $140 million announced two weeks ago.
A letter to Securities and Exchange Commission Chairman William Donaldson showed how Grasso's salary and other compensation ballooned from a total of $3 million in 1996, his first full year as chairman and chief executive, to $25.6 million in 2001, his most richly paid year. Multimillion-dollar bonuses, particularly in 2000 and 2001, accounted for much of the growth.
In the 12-page document, H. Carl McCall, chairman of the exchange's compensation committee, answered point by point the concerns raised by Donaldson last week. The SEC chairman, who held the top NYSE job before Grasso, had raised stark questions about the payout and set a Tuesday deadline for the exchange to respond.
The NYSE, a quasi-private institution charged with regulating the public companies traded under its watch, has been widely criticized for Grasso's pay -- announced even as the exchange demanded more accountability from its members and was instituting its own reforms. The Aug. 27 disclosure triggered howls of protest throughout the U.S. financial world.
The SEC confirmed Tuesday that it had received McCall's response, but declined to comment further.
McCall said that in addition to the $139.5 million already paid to Grasso in retirement benefits and deferred compensation over three decades at the exchange, and his current annual salary of $1.4 million, the NYSE chief was entitled to receive an additional $48 million over the next four years under the terms of a 1999 employment contract.
In an elaborately paneled meeting room at the NYSE building, Grasso told reporters he had decided to forgo the $48 million in the interest of the institution, and to help restore its focus -- which he said had been distracted since the details of his pay became public.
``When my contract was signed in '99, no one could have anticipated these levels of compensation,'' Grasso said. ``This institution should not be preoccupied with talking about the compensation of its leader. . . . I think it's important for this business to get back to business, and that's why I've done what I've done.''
Grasso, who will remain in his post until 2007, said his compensation has always been determined exclusively by the NYSE board, with no input from him. The NYSE, which has not publicly released the compensation of any top executives until recently, has promised to disclose the information for its top five highest-paid managers in its next annual report."
Posted on Wed, Sep. 10, 2003
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