BC: POSTER BOY OF GREED
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Good work if you can get it ..
Includes $57 million more because he
was 'fired' .. I should be so lucky ..
Richard Grasso Leaves a Selfless Gift to Us All: Michael Lewis
(Commentary. Michael Lewis, whose books include ``Liar's
Poker'' and ``MoneyBall'' is a columnist for Bloomberg News. The
opinions expressed are his own.)
Sept. 22 (Bloomberg) -- I'm still trying to figure out how
Richard Grasso did it. No matter how you look at it, his was a
remarkable achievement.
An otherwise unexceptional fellow, performing fairly routine
functions for a not terribly profitable enterprise, staffed and
owned by some of the most financially self-interested people on
the planet, talked and charmed them into forking over an annual
salary of as much as $25.6 million, building himself a retirement
nest egg worth $140 million.
The man may not have been the ideal leader of the New York
Stock Exchange. He may have had a distressing tendency to
embarrass himself (shaving his head after meeting Marxist
guerillas in the Colombian jungle) and his employer (banning the
Arab television network al-Jazeera from the exchange as a
presumed act of patriotism). But he did one thing extremely well:
get paid.
For anyone who sincerely feels underpaid -- and who among us
can honestly say he does not? -- Richard Grasso's achievement
cannot go ignored. As with any business virtuoso, however narrow
his focus, Grasso has given the world more than he has taken from
it, by offering us all important lessons. To wit:
Join the Club
1) To be overpaid you must seek to be paid by people who are
themselves overpaid. As executive pay expert and fellow Bloomberg
columnist Graef Crystal often points out, a reliable predictor of
what an executive earns is the income of the people who set his
salary. We must assume, now that Richard Grasso has established
himself as the world's leading authority in his chosen field,
that he grasped this simple principle.
This would explain one of Grasso's several seemingly
comically inept moves: his insistence, over the loud objections
of an entire planet, that Citigroup Inc. Chief Executive Officer
Sanford Weill sit on his board.
True, Weill may have been a bit ... tarnished. But no man on
Wall Street made certain that he got more than he deserved than
Sandy Weill. Weill almost certainly was the CEO who, merely by
the sums he extracted from his company for himself, inspired
Warren Buffett to dump his stock and to complain last year,
without naming names, about the excesses of executive pay.
Who can blame Grasso for his passion for Weill? It must have
struck him as a simple matter of giving the job to the man best
suited to do it. No man on Wall Street was better qualified than
Sandy Weill to sit on Richard Grasso's compensation committee.
Star Ringer
2) To be overpaid you must get yourself classified as Talent
-- even if what you really are is a dull-minded creature of habit
performing a task as rudimentary as, say, ringing a bell.
The casual comments of his board suggest that Grasso managed
to do this. For instance, when the misguided controversy over
Grasso's pay package first reared its ugly head, H. Carl McCall,
the guy who now runs the compensation committee, explained that
``you have to do what you can to retain good people.''
Of course you do! Good people -- and really there are so few
of us -- are the most precious of assets. And you never know. At
any moment Richard Grasso could have been offered $250 million to
ring the bell someplace else. And where would that have left the
New York Stock Exchange?
Seize the Day
3) Timing is everything. Grasso had the wisdom to strike his
lucrative pay deal in 1999. That year, his pay jumped to $11.3
million. Now $11 million a year, a sum that more than doubled
over the next two years, might seem like a lot of money in these
niggardly times. I'm here to tell you that back in 1999 eleven
large was chicken feed. Many people -- people who had worked even
fewer years than Richard Grasso -- made much, much more.
A lifelong bureaucrat such as Grasso might have been
forgiven for taking a reticent view of the matter. ``Oh well,''
he might have said, ``eleven million isn't all that bad for a
fellow with no college degree who never worked anyplace else and
never generated any wealth for anyone.''
But that's what sets apart Richard Grasso: he didn't! Like
any true master of his art, he was constitutionally incapable of
resting on his laurels. A lesser man might have returned his hand
to his pocket. Not Grasso! He looked around and saw that as well
as he was doing for himself, other people were doing better.
Self-Doubters Lose
Which brings us to our fourth and final lesson:To be
overpaid you must continue to believe that you are not. For if
you begin to sense you are getting more than your fair share, you
may miss opportunities to get even more.
Grasso admirably resisted this natural human tendency. His
fierce determination to do what he did best, to the best of his
abilities, enabled him to ignore the apparent conflicts of
interest and justify taking lucrative seats on the boards of
publicly traded companies. And when the ripest moment for
personal gain presented itself, he bravely seized it.
Of course there are people who object to Richard Grasso
taking an extra $5 million bonus in the aftermath of 9/11. These
are the same small-minded folks who object to the child in the
ice cream parlor asking for just one more scoop. They may enjoy a
brief moment of self-righteousness. But they'll never make it in
the big time.
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