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Date Posted: 15:07:07 09/06/03 Sat
Grasso in the line of fire
NYSE members want changes at the top
By DANIEL DUNAIEF
DAILY NEWS BUSINESS WRITER
New York Stock Exchange president Dick Grasso walks among floor traders during a retirement function on Valentine's Day.
A growing group of New York Stock Exchange members is trying to figure out how to change the NYSE board - and get rid of its chairman Dick Grasso.
"There's a lot of people on the floor that want Grasso gone," said a trader who requested anonymity.
Outrage over Grasso's $140 million retirement pay and a minimum annual $2.4 million salary plus bonus that extends through 2007 has led a group of exchange members to look for new leadership.
Many have also placed calls to William Donaldson, chairman of the Securities and Exchange Commission, who many knew during his time as Grasso's predecessor. They've reportedly expressed a strong desire for Donaldson to press for a new board.
With that end in view, some members, who've paid as much as $2 million for their "seats" that allow them to trade stocks on the floor, are trying to gather enough signatures to force a full meeting of the 1,366 members.
The purpose of that meeting, among other things, would be to replace the board.
"As far as a special meeting, that is going to happen," predicted one broker who handles big trades. "There's a real concern on the floor that Dick was given a contract extension, especially when all this stuff is going on."
Traders, specialists, and other members generally spoke about the NYSE on the condition of anonymity because they said they feared reciprocity from the exchange, which can mete out fees and penalties at will.
Donaldson has already sent a letter to the NYSE compensation committee headed by H. Carl McCall requesting details about Grasso's compensation.
McCall, who didn't return calls to his office yesterday, has until Tuesday to respond.
A NYSE spokesman said the exchange would comply with the request by the deadline.
As for Grasso, the spokesman said he'll "be here at least through May of 2007" - the duration of his new contract.
"I congratulated Bill" Donaldson on the letter, said Muriel Siebert, president of Muriel Siebert & Co. "He took a very gutsy move in opening the subject up."
Grasso "got paid what's considered an enormous amount of money in a bear market when fees are going up," said one trader who said his firm's fees climbed as much as 40% in the last two years.
"It seems like very poor judgement to the people who work here that the board would allow" fees to rise this fast as trading volume stagnated and Grasso collected a bonanza, said another trader.
The NYSE has taken heat from corporate governance experts for requiring the companies that list their shares to follow guidelines that the exchange itself hasn't followed.
The NYSE has made some changes, including prohibiting its directors from serving on the boards of listed companies, and is in the process of adapting several others.
Originally published on September 6, 2003
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