Will Former Exchange Chief Have to Return Pay?
This is Bob Doughty with the VOA Special English ECONOMICS REPORT.
Not many people would admit they were paid too much for a job. But that is what Richard Grasso is being asked to do. Mr. Grasso was chief of the New York Stock Exchange until last September. Since then, the exchange has asked him to return more than one-hundred-million dollars of his pay. Now the state attorney general of New York, Eliot Spitzer, has brought civil charges to demand that money back.
The New York Stock Exchange is organized as a company that operates for the public good. It is governed under state rules called the Not-for-Profit Corporation Law. This law says companies that do not earn profit cannot pay their employees an "unreasonable" amount. But the law does not say how much is too much.
Mr. Spitzer does not say that Mr. Grasso was a bad chief executive officer. In fact, he praises his work as C.E.O. Mr. Grasso is credited with helping to re-open the stock markets after the terrorist attacks of September eleventh, two-thousand-one.
But he also served as chairman of the board of directors of the exchange. Mr. Spitzer says Mr. Grasso pressured the members to approve too much pay.
Mr. Spitzer also says that information was hidden from the board. A man named Frank Ashen is cooperating in the case. His job was to inform the board about Mr. Grasso's pay. Mr. Ashen says mistakes were made. But he says he never purposely gave incorrect or incomplete information to the directors.
Last December, the stock exchange separated the duties of chief executive officer and chairman of the board.
The pay plan for Mr. Grasso is complex. It included a retirement plan, special pay and money to be paid at a later time. Last August the board voted to approve almost one-hundred-ninety-million dollars in pay for recent years. Mr. Grasso has already received one-hundred-forty million dollars. He agreed not to ask for the additional money. But, in the end, the exchange may owe him even more than that if he wins.
Mr. Grasso says the case brought by the New York state attorney general appears political. He says he did not try to hide anything, and that the board approved all the money. The former chief of the world's biggest stock exchange says he did nothing wrong. And he says he expects the courts to agree.
This VOA Special English ECONOMICS REPORT was written by Mario Ritter. This is Bob Doughty.