- The Washington Times - Tuesday, September 16, 2003

SACRAMENTO, Calif. (AP) — The leaders of three powerful public pension funds in California and New York yesterday called for the resignation of New York Stock Exchange Chairman Dick Grasso, saying the size of his pay package endangers attempts to reform corporate governance.

State Treasurer Phil Angelides — one of the more influential board members of the California Public Employees’ Retirement System, the nation’s largest — and Sean Harrigan, chairman of the fund’s board, told a news conference they have “deep concern” about Mr. Grasso’s $139.5 million compensation package and want the pay revised along with his resignation.

They were joined in their request by Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System.

“It is fundamentally important that Grasso resign, so the New York Stock Exchange can restore its moral authority,” Mr. Angelides said.

New York State Comptroller Alan G. Hevesi — trustee of New York’s $90 billion pension fund, the nation’s second-largest — joined the call, saying Mr. Grasso has “lost the ability to implement needed reforms at the NYSE and to regulate and monitor its members and listed companies.”

“While in many ways he has done an excellent job, his effectiveness on the key issues of fighting corporate corruption and improving corporate governance has been shattered,” Mr. Hevesi said.

The exchange had no comment on the developments yesterday.

The NYSE performs a dual role as a financial-services company and a regulator of the 2,800 public companies traded under its watch.

Criticism of Mr. Grasso’s lavish payout of savings and accrued benefits has swelled since it was disclosed last month. Mr. Grasso forfeited another $48 million in compensation in a bid to quell the furor last week, but the news of additional money promised him only fed the outcry.

Traders and seatholders were said to be circulating one or more petitions seeking changes in top management at the NYSE. The matter was expected to be discussed at a meeting of active seatholders tomorrow, and at a general meeting next month.

“The enormous amount of his remuneration is inappropriate for a regulator,” Mr. Hevesi said. “When an official is paid an extraordinary amount of money by those he is supposed to regulate, there is an obvious conflict of interest.”

The Securities and Exchange Commission demanded that the exchange explain how Mr. Grasso’s compensation was determined and is reviewing the NYSE’s response.

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