I love this headline in today's New York Times -- "Grasso Giving Up $48 Million in Benefits." Ouch! That's gotta hurt. But to Richard A. Grasso, the chairman of the New York Stock Exchange, it's a drop in the bucket.
You see, the New York Stock Exchange disclosed its chairman's compensation package last month after a request made by the Securities and Exchange Commission. Since Grasso took the position in 1995, he's earned $97 million, not including benefits. And then there are retirement benefits and various bonuses. In all, the Times article notes that Grasso had received $139.5 million in accumulated pay. The $48 million he's forgoing is money he is owed in back benefits.
In a USA Today article, Grasso said he would "forgo that $48 million because the size of his pay was becoming a distraction from his job of running the exchange." Is announcing that he's giving up the $48 million supposed to make us feel better about the fact that he's made $97 million as the as the chairman of the NYSE? Executive compensation and corporate governance have been enormous issues in the past year. Shouldn't the NYSE be a bit more of a role model in the area of corporate governance?
SEC Chairman William H. Donaldson certainly thinks so. As a recent Washington Post article reported, Donaldson wrote the following in a letter to the NYSE's compensation chairman: "As you know, I believe that self-regulatory organizations must be models of good governance…In my view, the approval of Mr. Grasso's pay package raises serious questions regarding the effectiveness of the NYSE's current governance structure."