After weeks of criticism over his $140 million pay and benefits package, New York
Stock Exchange Chairman Richard Grasso was forced to resign Wednesday night.
USA Today reports that Grasso agreed to quit during a hastily arranged and
often tense two-hour conference call with his board. After a debate over whether
he could continue to act effectively as NYSE chairman, Grasso called for a vote
of confidence. He lost 13-7.
H. Carl McCall, chairman of the NYSE's compensation committee and a former
New York comptroller, will serve as lead director until a permanent replacement
for Grasso is found.
The furor began when the NYSE, in taking steps to make itself more financially
transparent, disclosed in Securities and Exchange Commission reports that Grasso
will receive $139.5 million in benefits and savings accumulated over his three
decades with the exchange, mostly since he became chairman in 1995. He could
get another $10 million in severance pay, according to his contract.
The Associated Press reports that under his current contract, Grasso is entitled
to at least $9.6 million in severance pay equal to his salary and target
bonus for the next four years as well as lifetime health and life insurance
for himself and his wife. He's already declined other provisions, including
supplemental retirement benefits, a $5 million bonus and funds vested in a capital
accumulation plan, which were included in the $48 million.
In a statement, Grasso said he was stepping down "with the deepest reluctance."
But he added that "I believe this course is in the best interest of both
the exchange and myself."
The details of Grasso's pay, never disclosed before, came as a shock to many
who hold stakes in the exchange, according to the AP.
"The thing that really surprised me was that he was paid a bonus for 9-11,"
said Muriel Siebert, an NYSE seatholder since 1967 who heads up her own brokerage.
"Now, I think Dick did a superb job that day. ... But a lot of people in
this country would have paid for the privilege of having that responsibility.
And they would have done it without a bonus."
In 2001, when terrorist attacks shut down the nation's capital markets for
nearly a week, Grasso's total compensation swelled to its highest level: $25.6
million, including a $16.1 million bonus and a $5 million "special award"
to be paid upon retirement.