Dick Grasso In Trouble Again

In September 2003, then New York Stock Exchange (NYSE) Chairman Dick Grasso resigned in the face of a public outcry over his $140 million compensation, which raised questions about NYSE's governance.

Today, the New York state attorney general's office sued Grasso over a compensation package they labeled "wholly inappropriate and illegal."

The suit follows a four-month investigation into the controversial pay package and asks that a State Supreme Court judge rescind the pay package and determine a "reasonable" level of compensation for Grasso.

New York Attorney General Eliot Spitzer said the case demonstrates "everything that can go wrong in setting executive compensation." He cited "the lack of proper information, the stifling of internal debate, and the failure of board members to conduct proper inquiry" as factors contributing to the failure.

Many worried about NYSE's ability, under Grasso, to properly govern its member businesses since these were the same factors cited in the problems with Enron, WorldCom, HealthSouth and others. John Thain was appointed CEO in December to replace Grasso.

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• CEOs Are Overpaid
• Spitzer Sues Grasso