New York (May 27, 2004) -- Former New York Stock Exchange chairman and chief executive Richard Grasso pledged to sue his former employer for money that he says is still owed to him and for damages and legal fees, and said that he would give any winnings to charity.
On the editorial page of The Wall Street Journal on Tuesday, Grasso vehemently defended the pay package that ultimately led to his ouster from the Big Board last September, and railed against the lawsuit filed against him Monday by New York Attorney General Eliot Spitzer, which seeks to recover part of the money he was paid. The lawsuit against Grasso, the Big Board and Kenneth Langone, the exchange's former compensation committee chairman, alleges that Grasso deliberately misled the NYSE and its board.
In the column, Grasso, who said the suit “smacks of politics,” said that his record at the NYSE “speaks for itself.” “The value of a membership seat nearly tripled during my tenure as chairman, soaring to more than $2 million from $700,000; the income to seat owners leasing their seats to others likewise jumped to $300,000 from $100,000. Under my leadership, the NYSE significantly increased its market share. It nearly doubled the number of listed companies, and the great majority of the near-500 non-U.S. companies now on the NYSE were listed during my tenure.” Grasso also oversaw the implementation of the Big Board's technology platform.
Grasso railed against Spitzer for not including in the lawsuit any of the directors who approved his sizeable pay package because he needs their support to pursue his political ambitions. “Mr. Spitzer's decision to sue me and not [former State Comptroller Carl] McCall … or the powerful CEOs who voted for my compensation year after year, makes clear that Mr. Spitzer is running for governor, and running hard. And he badly needs the support of Mr. McCall, and the others who made the decisions now under attack,” Grasso wrote. McCall chaired the compensation committee that approved Grasso’s pay.
Grasso continued, “Reasonable people can disagree about what an executive should be paid, but the directors who evaluated my performance were well aware of the market for executive compensation on Wall Street, because that is where many of them worked and earned their own substantial income. For all the charts and handouts at his press conference, Mr. Spitzer cited no evidence that I misled the board or hurt the NYSE. It didn't happen.”
Noting this his vindication “will now come in a courtroom,” Grasso said that he instructed his attorneys “to file a counterclaim for the compensation that is still owed to me, as well as to seek appropriate damages for the leaks orchestrated by [former interim NYSE chief executive John] Reed. I publicly pledge that I will donate the entire net proceeds of the recovery on my counterclaims to various charities.”
New York State Supreme Court Judge Charles E. Ramos will preside over the case to reclaim more than $100 million of Grasso's pay, the WSJ reported.
-- WebCPA staff
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