This is sure a different take than the WSJ.......
Grasso's days are numbered
Commentary: Pay scandal ruins image of 9/11 valor
By David Callaway, CBS.MarketWatch.com
Last Update: 12:05 AM ET Sept. 11, 2003
SAN FRANCISCO (CBS.MW) - He was by no means a New York City fireman, risking his life to run into the collapsing towers, but Dick Grasso nonetheless became a symbol of the bravery and resolve that characterized that city and this nation two years ago this week.
The New York Stock Exchange chairman, overseer of the very symbol of American financial greatness the terrorists sought to destroy, almost single-handedly rallied a frightened Wall Street by opening the exchange back up only six days after the attacks.
Sitting there at press conferences in the days after the attacks, proclaiming that the terrorists would not stop the engine of the global financial markets, Grasso helped launch the surge of patriotic pride that got America back on its feet.
But now, only two years later, Grasso is under fire, a symbol of the greed and lack of integrity at the very top of the financial food chain that has come to underline the corporate corruption scandals of the latest bear market.
The Dow Jones average ($INDU: news, chart, profile) and the Nasdaq ($COMPQ: news, chart, profile) may be just barely above where they were two years ago when the planes hit, but on the corner of Wall and Broad in lower Manhattan, the image of the NYSE has changed forever.
That Grasso had accumulated some $140 million in compensation during his 36-year career at the exchange, the vast majority in the last decade, was surprising enough for a man whose position is more regulator and cheerleader on Wall Street than risk taker. And it was inevitable that when the NYSE finally disclosed it last month, it would provoke a hailstorm of criticism.
But when the exchange came out this week to say that he was entitled to another $48 million, but that he would honorably not take it, this scandal vaulted into the realm of the absurd. What could the directors of the exchange possibly have been thinking when they awarded this package, other than that they could expect similar treatment from him for their companies or themselves at some point?
To be honest, you can't blame Grasso. Like everybody else who makes a living grubbing for money on Wall Street, he took what he could get. I'm sure he feels he worked hard all his career and was entitled to at least some of the wealth that his friends and neighbors in the securities industry customarily accumulated.
But if he had stepped away from the opening bell and the balcony overlooking the trading floor for just one minute to really think about how the investing public looks to him and the NYSE as a symbol of fairness and integrity in the American capital markets, he would see what a terrible mistake he and the board have made.
I only met Dick Grasso once, seven or eight years ago in Luxembourg or all places, where he gave a speech at a conference for European exchange leaders. The speech was unremarkable; basically a list of facts about why the NYSE was so great.
What was remarkable, however, was the way the crowd treated him. Despite his squeaky voice and small stature, he moved like a giant through the post-speech cocktail party, shaking hands and pontificating on Europe and the U.S., his handlers at his side clearing the way as if for a rock star.
By comparison, the leaders of Europe's exchanges at the time seemed puny; NYSE and Nasdaq wannabees who melted into the background when Mr. Big entered the room.
Those were the days when folks still talked seriously about a global stock market, with a 24-hour, rolling trading day across Asia, Europe and the U.S., and the NYSE at the heart of it. Those dreams died along with the technology bubble and the advent of the bear market, however, and this latest debacle has surely put a stake in their heart.
Grasso stood defiantly in front of reporters Wednesday and vowed not to resign in the face of the growing scandal, but he won't have a choice at the end of the day. William Donaldson, head of the Securities and Exchange Commission, and Grasso's (obviously underpaid) predecessor at the NYSE, can't afford to have the world's largest exchange at the center of Wall Street's biggest pay scandal in years.
Grasso is biding time until he gets the $140 million. Once he has it, he will quit, walking into the sunset with little care about his legacy. That's the way Wall Street has always worked, and probably always will.
But if the NYSE ever wants to regain the credibility it enjoyed under Grasso at the height of the bull market, its board should resign too. Alas, after Enron (ENRNQ: news, chart, profile), WorldCom (MCWEQ: news, chart, profile), Martha Stewart, and the Wall Street analyst research scandals, it has finally become clear.
The fish is rotten at the head.
us.rd.yahoo.com*http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B7BB0447C%2D63B1%2D42D1%2DBEE9%2DE61252EC4197%7D |
