Former New York Stock Exchange chairman Richard Grasso, who was ousted in 2003 amid controversy surrounding his vast pay package, received compensation and benefits "far beyond reasonable levels," according to a report released by the NYSE.

In total, Grasso received roughly $144.5 million to $156.7 million in excessive compensation and benefits, according to the report by attorney Dan K. Webb of Chicago-based Winston & Strawn. The NYSE hired Webb in late 2003 to investigate Grasso's pay.

From 1992 to 2002, Grasso received more than $97.8 million in annual compensation, roughly $81.5 million of which was awarded from 1999 to 2002, according to the report. "Even assuming that Grasso performed at a consistently outstanding level during this period, his compensation was more than double what was reasonable in this four-year period," according to the report, which noted that Grasso's "total in excess annual compensation was approximately $43.1 million."

The report called Grasso's pay for 2000 and 2001 "grossly excessive, approximately three to four times what was reasonable." For those years, his annual compensation reached about $26.8 million and $30.6 million respectively. "A conservative estimate of what Grasso's yearly compensation should have been in this period is $4 million to $6 million, based on the median level of an appropriate peer group," the report said.

"Even assuming outstanding performance by Grasso, a generous annual compensation level would have been in the range of about $8 to $9 million," while Grasso's compensation was several times that amount in 2000 and 2001, the report noted.

According to the report, Grasso's "excessive benefits were the product of multiple flaws in the compensation and benefits process employed by the NYSE." Among other things, the report noted that Grasso's Supplemental Executive Retirement Plan benefits weren't subject to "any reasonable limits or caps that would have prevented their growth to unreasonable levels," his accumulation of SERP benefits wasn't monitored sufficiently, and the compensation committee didn't examine and consider the level of those benefits when making its compensation decisions for Grasso every year.

The report also said that the consultants employed by the compensation committee didn't have the "appropriate level of involvement in, or input regarding, the compensation and benefits process." In addition, the committee used "an inappropriate comparator group for benchmarking Grasso's compensation levels, comparing Grasso to CEOs of large, profit-making institutions that are vastly different from the NYSE."

"Against proper governance practice, Grasso was involved in or connected to the process that determined his own compensation," the report noted. For example, the report said that he chose which board members sat on the compensation committee, he had a "strong influence" on who was appointed to the board that approved his compensation, and he determined a component of the annual NYSE performance evaluation process that the committee used in part to set annual bonuses and to benchmark Grasso's pay.

Grasso, former NYSE director Kenneth Langone, and the exchange itself are being sued by New York State Attorney General Eliot Spitzer over Grasso's pay package. Grasso has counter-sued the exchange and John Reed, his successor as NYSE chairman.

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