2004-6-3
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. Mister 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.
Mister Spitzer does not say that Mister Grasso was a bad chief
executive officer. In fact, he praises his work as C.E.O. Mister
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. Mister Spitzer says Mister Grasso pressured the members to
approve too much pay.
Mister 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 Mister Grasso's pay. Mister 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 Mister 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. Mister
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.
Mister 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.