- The Washington Times - Wednesday, September 17, 2003

NEW YORK (AP) — New York Stock Exchange Chairman Richard Grasso resigned yesterday amid rising fury over his $139.5 million pay package, his 36-year career ruined by cries that he made too much money running the world’s richest financial market.

Mr. Grasso called an emergency meeting of the NYSE board, at which he offered to resign if the board asked, said H. Carl McCall, chairman of the NYSE compensation committee, who ran the meeting.

“The board did so and accepted that resignation,” Mr. McCall said.

In a statement, Mr. Grasso said, “I believe this course is in the best interest of both the exchange and myself.”

The board was to reconvene later in the evening to discuss a replacement.

Mr. Grasso said he was stepping down “with the deepest reluctance.”

“Throughout my career and on behalf of all exchange constituents, I have worked with great partners to build and enhance the value and brand of the NYSE,” he said. “I look forward to supporting the board and the exchange in bringing about a smooth transition to a successor.”

The meeting, which included chief executives from Wall Street’s largest investment banks, began shortly after the market closed.

Resentment over the multimillion-dollar pay package was coming to a head on the exchange floor, as well, as active seatholders planned to gather after the market closed today to discuss the issue with three directors who are also NYSE members.

The NYSE revealed its top executive’s pay for the first time last month as it announced Mr. Grasso’s contract had been extended through 2007. News that he would receive a lump-sum payment of $139.5 million in accrued benefits and tax-deferred savings sent jaws dropping across Wall Street. The funds accumulated over his 36-year career with the exchange, mostly during his eight years as chairman.

Mr. Grasso has insisted he did nothing to influence his pay. At a Sept. 9 news conference — when he announced he would forgo another $48 million promised to him under his contract — he said each year when informed of his compensation he responded by saying, “I’m blessed. Thank you.”

Critics, from investor advocates to politicians and traders, say the lavish pay undermines the credibility of the exchange, a not-for-profit institution that is owned by its members and also serves as a regulatory watchdog.

Michael LaBranche, the head of LaBranche & Co., one of the NYSE’s largest stock-trading specialist firms, had come out earlier in the day in favor of a change.

“We are calling for Grasso’s immediate resignation in the interest of the New York Stock Exchange. We think Dick Grasso has to leave now in order for the exchange to move forward and restore investor confidence in the marketplace,” he said.

Traders have reportedly circulated one or more petitions calling for a special meeting to discuss changes at the top of the NYSE. Many also have been critical of the board for approving the hefty pay package.

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