Also when I was leaving, NYSE Richard Grasso was coming under pressure to resign but he was stating he would wait til next week to address the issue. In the next few hours, he resigned: UPDATE 7-NYSE Chairman Grasso resigns under pressure
Wed September 17, 2003 09:36 PM ET
(Recast first paragraph, adds comment from California Controller Steve Westly)
By Jake Keaveny and Brendan Intindola
NEW YORK, Sept 17 (Reuters) - Richard Grasso, the head of the New York Stock Exchange, resigned on Wednesday in the face of mounting pressure from investors, regulators and top Wall Street firms over a $140 million payout.
Grasso's departure, which comes two years to the day after he triumphantly reopened the exchange after Sept. 11, raises questions about the exchange's future role and direction.
While Grasso's record of building the exchange's business was never in question, the public outcry over the size of his compensation and lack of disclosure about it cost him the support of key Wall Street figures.
In recent days the public outcry mounted as calls for his resignation came from top state pension funds, floor traders and politicians.
Grasso bowed to the pressure and tendered his resignation in an emergency board meeting called on Wednesday.
"Mr. Grasso's resignation was a necessary step to restore confidence in the exchange," California Controller Steve Westly, who sits on boards of California's giant state pension funds, said. "It is a breath of fresh air for the markets."
Larry Sonsini, a prominent West Coast securities lawyer and NYSE board member, was asked to take Grasso's place on an interim basis, according to a spokesperson at Sonsini's San Francisco office. The spokesperson did not say whether he had accepted the post.
The board was set to hold another conference call at 9:00 p.m. EDT (0100 GMT) to discuss Sonsini's appointment, as well as appoint a search committee to select a permanent successor.
Carl McCall, chairman of the NYSE compensation committee, led the board meeting Wednesday, according to the NYSE. McCall had shown support for Grasso in a public announcement Sept. 9.
"Dick offered to submit his resignation if the board requested, and the board did so this afternoon," said McCall, chairman of the NYSE compensation committee.
A TOUGH WEEK
The resignation follows a tumultuous week. Grasso, who worked for the NYSE for 36 years and was chief executive since 1995, watched his support among the exchange's members weaken dramatically.
"Today, I shared with the board of directors ... that, with the deepest reluctance and if the board so desired, I would submit my resignation," Grasso said in a statement.
New York Comptroller Alan Hevesi and California Treasurer Phil Angelides, asked for Grasso to step down on Tuesday. The two officials are responsible for over $300 billion in state run pension funds.
On Wednesday other public figures followed suit. Two Democratic presidential candidates -- Joseph Lieberman, senator from Connecticut, and John Edwards, senator from North Carolina -- and Michael LaBranche, the head of the largest specialist trading firm on the NYSE, also made public requests for Grasso to resign.
OTHER REFORMS?
Grasso's resignation is expected to trigger corporate governance reforms within the exchange -- including the way various NYSE compensation committees approved Grasso's pay.
William Donaldson, the head of the U.S. Securities and Exchange Commission, said Wednesday that the SEC will review the structure of the NYSE's internal governance structure.
"It's a very sad time for the New York Stock Exchange," Francis Maglio, a long-time NYSE member said. "He wasn't in this alone. Other people have to share responsibility for the demise of a man who spent his entire life at the New York Stock Exchange and loved it." (Additional reporting by Nicole Maestri, Paul Thomasch, Javier David and Chris Sanders)
reuters.com |
