If any of us in the mid 1990's were to predict the future of the NYSE as 2004 approaches, it's doubtful that we would have foreseen the continuation of the exchange's monopolistic "franchise" in the trading of listed securities. During Grasso's tenure the NYSE has not only survived the ECN threat but prospered, and seat prices have appreciated by 300%. Grasso's compensation is clearly not determined by the bottom line success of the NYSE as an Corporation but he is rewarded based on the profitability of the members.As an association the goal of the NYSE is not to turn a profit per se, but to guarantee the livelihood of it's members. By that yardstick, Grasso has clearly done the job well. Here in the Chicago area, several dozen retired teachers are making over 100k a year in pension benefits. In this interest rate environment that would equate to having the risk free income stream off of 10-20 million dollars in savings. So given that the NYSE is a private association it's difficult to ascertain what's proper compensation, or is it any non-members concern. However I find it very ironic that former NYSE Chairman Bill Dondaldson is so up in arms. A bit jealous Bill, LOL! Considering that Donaldson's greatest achievement in life has been the enforcement of the PDT regulation, and the nation's de facto chief corporate accountant, i.e. Enron, WorldCom, XO, if Donaldson is making 142k a year Grasso should me making a billion.
LOL. C'mon, man, you're ignoring the fact that the NYSE is a quasi-regulatory entity responsible for overseeing companies listed on the exchange. That's the reason this is more than a brouhaha over excessive compensation in general and why the SEC can demand an explanation from the governance board. $140 million??? That's more than the entire market value of 10% of the companies that list on the NYSE. LOL. But let's take your "Dick works for the members" stuff seriously for a moment. You think the members knew about this pay package? Guess again. The NYSE released details of Dick's pay for the first time. It turns out Dick made $21.8 million in 2000 and $25.5 million in 2001 to boot. The $140 million represents deferred comp and an acceleration of retirement funds. Yeah, the members are so happy with Dick that there's a petition going around to force a special meeting of the NYSE board to get rid of him. You sound like a guy still bitter over the PDT rule that he can't see straight. Hey, the PDT rule is over and done with. Time to move on.
For starters I'm a former CBOT floor trader who doesn't know Dick(no pun intended) about listed stock trading, and except for a couple times speculating on GE I've never traded NYSE in my life. While I don't like the PDT from a libertarian standpoint, it has helped increase futures volume and that is my livelihood. As far as Grasso's compensation, it's facetious that just because an exchange has regulatory power (as do commodity exchanges, i.e. a violation of CBOT rules is automatically a breach of Federal law) that an executive's pay package be an SEC issue. Bottom line: no matter how distressed the rank and file members are at Grasso's pay, it was approved by a committee of fellow members.This is not akin to a self-congratgulatory Board of Directors of a publicly traded company voting themselves an excessive package. Besides, whats the arbitrary benchmark for excessive. 50 mil?, 90 mil?, 139? Is Grasso any less ethical than the Jr. Senator from New York selling her memoirs as First Lady for 10 million. Or for that matter the former mayor of NYC getting 100k a speech by exploiting his experiences from 9/11. All I know is, if I was Fleet financial or Speer Leads, and my specialist units were continuing to earn tens of millions a year unfettered, my pro-rated share of Grasso's 139 would not seem ludicrous.
Almost $200 million in heretofore undisclosed payments in 3 years to a person who heads a quasi-governmental organization that owes its advantages not to free competition but to enabling federal laws and regulations and that is accountable directly to the SEC . . . yeah, that seems excessive (and a bit shady) to me. If not to you, hey, that's cool . . . I'm not trying to convince you. I responded to your post because it was funny in trying to justify Dick's pay with the picture of a glad and approving NYSE membership and blaming a purportedly jealous SEC chief who you blame for the PDT rule and the bad actions of corporations. It seemed to me you were a failed stock trader just bitching. But now you say you trade futures for a living and the PDT rule has helped increase futures volume. So are you now OK with the PDT rule? And what's with the apples and oranges comparisons to Clinton's book deal and Rudy's speeches? You're not making much sense, guy. But have a great weekend anyway.
Icarus: My point about Donaldson was merely that he's been an ineffectual SEC Chairman, who presided over what I consider a huge affront to liberty, that being the PDT rule. From a business standpoint it neither bothers me nor effects me. Obviously I 'd rather see trading dollars deposited here in Chicago than somewhere else, BUT the PDT is bad policy and is forcing small traders to engage in riskier instruments than stocks. The point about Clinton, Rudy, A-Rod or whoever is that the ethics of compensation is a wide open debate. You're the one who chose to inflate Grasso's already exaggerated package by another 40%. I asked whats a "fair" arbitrary number? Grasso's not paid by the SEC. He's paid by the membership of the NYSE who have made literally in the combined billions of dollars under his chairmanship. What he's paid is the membership's business. Yea if I was a measly floor trader I might be thinking WTF, but by my reckoning they're lucky they've even got a floor to trade on. By your way of thinking since the FCC has created a monopolistic system in which Infinity and Clear Channel dominate the airwaves, the government should dictate Howard Stern's syndication fees.
First, with regard to the PDT rule. If you're unhappy about it, you're directing your blame at the wrong party. Who do you think wrote the rule? The NYSE (along with the NASD). The NYSE is self-regulatory with the SEC having oversight. All NYSE rule changes must be approved by the SEC but that is in almost all cases a mere formality and a simple application of administrative law. Dick was the head of the NYSE at the time, so let's give credit (or blame) where it's due. Second, let's work with your analogy with the FCC. It makes more sense to me to compare Dick with the head of the FCC (and Howard Stern with Martha Stewart LOL). I'm not sure what the FCC chairman is making . . . but I'm pretty sure it's not even a million a year and I'm definitely sure it's disclosed. You seem like a guy who would be unhappy if his tax dollars went to pay a regulator millions in undisclosed income. Where does the NYSE get its revenues? Not just from its members. Take a peek at the annual report. The NYSE revenues are comparable to a tax that is borne not just by its members (who ultimately pass it on to their customers - i.e., people who buy and sell stock) but to all participants in the stock market. You seem to be unable to follow the money trail. Hey, in any case, it's been fun debating with you. I'll give you the last word. Have a good weekend.
Grasso seems like an easy target. He's kinda funny looking, he's short, and he's "only" an NYSE guy. His pay package seems to be a bigger deal than it really is. This harks back to the days when Michael Milken made $400 million + and people were outraged. The greed is good era. I'm not thrilled he made so much money, but alot of other CEO's make a heck of a lot more than he did. Eisner, Bernie Ebbers, our buddy Ken Lay, etc, these guys are raking in the dough. Haliburton got less flack over Iraqi bidding shenanigens than Grasso has gotten over his pay. Alot of other overpiced CEO's are falling under the radar.
During my research this weekend, I ran across an article which made two points . It is Mr. Grasso' duty to the federal government to safegaurd the interests of all investors.His track record for the last several years certainly does not merrit his compensation. The second point being that his compensation is set by people he is charged with regulating.I cant think of a better example of conflict of interest thats occurred recently.After all, its because of his own greed that all attention is being brought to bare.Apparently some seat members on the NYSE want to can him.So its an outside chance he 'll be in the unemployment line because noone will be able to afford his salary.