NYSE Chairman Grasso Resigns

September 17, 2003 (PLANSPONSOR.com) - New York Stock Exchange (NYSE) Chairman Richard Grasso has resigned his post following an emergency meeting of the exchange's board of directors.

The NYSE board of director’s emergency session came as requests for Grasso’s resignation emerged from a number of fronts, including  NYSE directors, floor traders, institutional investors and legislators.   This after details of a $139.5 million compensation package surfaced in August, followed by the disclosure of  another $48 million in compensation.  While Grasso waived that extra component, the news of additional money promised him only fed the outcry and ultimately led to his sudden departure, according to a Wall Street Journal report.

Among those calling for Grasso’s resignation were leaders of three powerful public pension funds:   California State Treasurer Phil Angelides, one of the most powerful board members at the California Public Employees’ Retirement System (CalPERS); New York State Comptroller Alan Hevesi, trustee of the Empire State’s $90-billion pension fund; and Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System (CalSTRS) (See  Pension Execs Join Grasso Resignation Call ).

In their announcement on Tuesday Angelides and CalPERS chairman Sean Harrigan told a news conference that they had “deep concern” about Grasso’s $139.5-million compensation package and called for the package to be revised and for the NYSE executive to step down.  The size of the Grasso package hurts ongoing efforts to reform corporate governance.  “It is fundamentally important that Grasso resign, so the New York Stock Exchange can restore its moral authority,” Angelides said.

Grasso worked for the NYSE for 36 years and was chief executive since 1995.  His resignation is expected to trigger corporate governance reforms within the exchange, including the way various NYSE compensation committees approved Grasso’s pay. 

Additionally, the Big Board’s directors named Larry Sonsini, chairman of a San Francisco-based law firm, as the interim chairman.   Sonsini had not officially accepted the position at press time.