Grasso Wins Round in Battle over NYSE Pay
REBECCA ROBERTS, host:
It was one of the biggest controversies on Wall Street in 2003.
Dick Grasso, the head of the New York Stock Exchange, made more than $180 million. The amount was so high that when the full board of directors learned about it, they fired him. Then New York's attorney general sued Grasso, saying he was to give the money back. Grasso has been fighting back in an attempt to keep the money. And yesterday, a New York court ruled that the money is his.
NPR's Adam Davidson reports.
ADAM DAVIDSON: Eliot Spitzer was attorney general in 2003. Back then, he said, Dick Grasso hoodwinked the New York Stock Exchange board into giving him what may have been the highest pay ever for the executive of a non-profit. Spitzer argued that as attorney general, he needed to step in to protect the public interest.
Grasso had a response. He pointed out that the New York Stock Exchange board is made up of directors who are financially savvy, including several major company CEOs and a former secretary of state. If Grasso made too much, it was the board's fault.
Others argued that the stock exchange is not like most non-profits. It's not a hospital or a charity or a struggling arts group. It's entirely focused on making money. And under Grasso's leadership, it made a lot of money. Much has changed since 2003.
Spitzer is now New York's governor, the stock exchange is now a for-profit business, and Grasso may be able to keep his money. A New York court ruled that the attorney general doesn't have the right to oversee the New York Stock Exchange's compensation plans. John Coffee of Columbia University says the ruling's impact is not limited to Grasso's bottom line.
Professor JOHN COFFEE (Law, Columbia University): Now this is a very important decision which has broad implications, because it essentially strips the New York attorney general of most of its authority over not-for-profit corporations.
DAVIDSON: Coffee says the ruling - if it survives appeal - means all those non-profit hospitals, charities and arts groups will have much less oversight than before.
Adam Davidson, NPR News, New York.