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September 19, 2003
NYSE's Grasso Resigns Amid Compensation Furor
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.

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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.

 

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