New York (Sept. 3, 2003) -- Securities and Exchange Commission chairman William Donaldson is demanding that the New York Stock Exchange explain the details of a $140 million payout to its chairman Richard Grasso.
The NYSE paid Grasso the $140 million in a lump-sum from deferred compensation and retirement accounts. This is in addition to Grasso’s recently disclosed earnings of nearly $2.5 million, between salary and bonuses.
Some investors have complained that Grasso’s pay is too high and that the NYSE has weaker corporate governance policies than many public companies, according to Bloomberg.
``In my view, the approval of Mr. Grasso's pay package raises serious questions regarding the effectiveness of the NYSE's current governance structure,'' wrote Donaldson -- a former NYSE chairman -- in a letter to Carl McCall, who chairs the NYSE board's compensation committee.>
The board will comply with Donaldson's request by his Sept. 9 deadline, McCall said in the Bloomberg report.
Last week, former New York state comptroller McCall said Grasso's compensation reflected the board's desire to ensure that he didn't leave for another job.
In March, Donaldson ordered the 10 U.S. stock exchanges, including the NYSE, to review their corporate governance policies, urging them to be an example of business ethics.
-- WebCPA staff
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