The Big Guys Bit The Dust
The first scandal that I am writing about is Richard Grasso. He was the head of the New York Stock Exchange. It was the 27th of August 2003 when it was discovered that Mr. Grasso was given a deferred compensation package that was worth almost $140 million dollars. It was a great concern because the handpicked compensation committee was made up of representatives of the NYSE-listed companies, over which Mr. Grasso had authority over as head of the Exchange.
There was much criticism about the deal from the U.S. Securities and Exchange Commission chairman William H. Donaldson and some of the pension fund heads. The Exchange board met and in a vote of 13-7 asked Mr. Grasso to leave the position. He left on September 17, 2003.
As if Mr. Grasso didn’t have enough grief on May 24, 2004 New York state Attorney General Eliot Spitzer, who demanded that he repay the majority of the $140 million pay package, sued him. Before Mr. Grasso left his position he was supposed to receive an additional $48 million on top of the $139.5 million that he already received. He did not receive these funds although on May 26, 2004 he had sued the current Exchange chairman, John Reed for the unpaid money. The suit filed against him said that Mr. Grasso and the director of the NYSE, Kenneth Langone misled the NYSE board about the details of his pay package, which was much higher than comparable chief executives. The NYSE was a non-profit institution during Mr. Grasso’s tenure and was governed by State of New York rules governing executive compensation for non-profits. There were also issues concerning premature withdrawals of his retirement package that usually have strict timetable for withdrawals.
In May 2007, New York State Appeals Court dismisses four of six counts against former New York Stock Exchange chairman Richard Grasso the ruling may make it more difficult for the state to force him to return large portion of the almost $140 million...
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