Reuters: SEC questions Grasso’s pay package. Securities and Exchange Commission Chairman William Donaldson, in a terse letter addressed on Tuesday to NYSE board member H. Carl McCall, said the approval of Grasso’s $140 million pay package “raises serious questions regarding the effectiveness of the NYSE’s current governance structure.”
No kidding, but Donaldson is being low key here.
This outlandish loot for the head of the New York Stock Exchange doesn’t raise questions. I shouts of continued, unrepentant arrogance in the top ranks of America’s business community.
One interesting question in the SEC letter is the extent to which Grasso’s winnings will come from money the NYSE would otherwise use for genuine enforcement of rules designed to protect shareholders.
We’ve seen plenty of evidence that the NYSE — and other stock exchanges — did far too little enforcement while the bubble expanded. Yet now that times have gotten grim from shareholders, CEOs and other top executives are doing just fine, thanks, and there’s another corporate scandal every week.
If Donaldson is really going after these folks — really trying to clean up Wall Street, which is plainly incapable of self-correction — he’ll deserve great applause. He’ll be helping to save capitalism, something today’s corporate chieftains don’t worry about.
Posted by: Barry Ritholtz on September 5, 2003 08:49 AM
The States (like NY and Oklahoma) have been embarrassing the Feds for well over a year now. Its pathetic that Spitzer’s 12 man office is out-ivestigating, out-enforceing and out-settling the SEC’s much larger but still undersized staff.
(I’ve addressed this issue alot; See link)
Credit new SEC chairman Donaldson for finally finding an issue that the states haven’t beat him to. Of course, I imagine that he’s a little pissed, having had Grasso’s job 8 years ago — and not reciveing anywhere near that kind of coin . . .
Posted by: dano on September 3, 2003 06:18 PM
I read an article about this earlier this month in the NYTs. The big problem that all of the high-paid executives had that were interviewed for the article was that the money comes at no risk. It’s not like stock options where at least there is some pretense of “earning” the money… it’s all in cash.
-d