New York (May 5, 2004) – The New York Stock Exchange doesn’t want to pay former chairman and chief executive Richard Grasso the millions in severance spelled out in his old contract, but just in case, the exchange has set aside $36 million to cover itself.
In its annual report to seatholders, the NYSE revealed that it hoped to avoid paying its former CEO some $60 million in pay and severance that he believes he is due. Grasso, who resigned last year amid an uproar over his large compensation package, has already been paid approximately $140 million, and has no intention of returning any of it. Indeed, The New York Times reported that his lawyer hinted that Grasso might sue to get back the money due him.
The NYSE’s 2003 annual report was hailed by some as a significant improvement in transparency, and also revealed some other moves on the corporate governance front. Most important was a significant reduction in pay for the exchange’s two co-presidents — $1.6 million in total compensation, down from $3.8 million the year before. On the other hand, each has accumulated over $9 million in lump-sum pension payments under the same retirement plan that inflated Grasso’s worth – a plan that no longer applies to the NYSE’s new chief executive, John A. Thain.
The NYSE also reported $49.6 million in net income, up from $28 million the year before.
-- WebCPA staff
