More Calls For NYSE Chief's Ouster

The heads of several powerful public pension funds called for the resignation of New York Stock Exchange chairman Dick Grasso, saying the size of his pay package is inappropriate for a regulator.

California Treasurer Phil Angelides called Tuesday for Grasso to resign and for the NYSE board to renegotiate his $140 million payout, reports CBS MarketWatch.
Angelides, flanked by the leaders of two of the nation's biggest pension funds, said a letter was sent to Grasso and the NYSE board and a copy sent to Securities and Exchange Commission chairman William Donaldson.

"If Wall Street can't stomach this compensation package then something must be wrong," Angelides said. Resignation is "the only way confidence of institutional investors can be restored."

Representatives of the California Pension and Employees Retirement System and California Teachers Retirement System joined Angelides. The group stopped short of taking financial action and said it would not be practical at this point to quit doing business with the exchange.

But the state has $46 billion invested in NYSE-listed companies and extensive relationships with brokers, investors, companies and other parties that have extensive dealings with or on the exchange. Angelides said he was willing to use moral and financial persuasion.

"We're not dilettantes," he said. "We don't just send letters."

Later Tuesday, New York State Comptroller Alan G. Hevesi — trustee of New York's $90 billion pension fund, the nation's second largest — joined the call, saying Grasso has "lost the ability to implement needed reforms at the NYSE and to regulate and monitor its members and listed companies."

"While in many ways he has done an excellent job, his effectiveness on the key issues of fighting corporate corruption and improving corporate governance has been shattered," Hevesi said.

The NYSE had no comment on the developments Tuesday, spokesman Rich Adamonis said.

The NYSE performs a dual role as a financial services company and a regulator of the 2,800 public companies traded under its watch.

Criticism of Grasso's lavish payout has swelled since it was disclosed last month. Grasso forfeited another $48 million in compensation in a bid to quell the furor last week.

"When my contract was signed in '99, no one could have anticipated these levels of compensation," he said last week. "This institution should not be preoccupied with talking about the compensation of its leader."

Traders and seatholders were said to be circulating one or more petitions seeking changes in top management at the NYSE. The matter was expected to be discussed at a meeting of active seatholders on Thursday, and at a general meeting next month.

"The enormous amount of his remuneration is inappropriate for a regulator," Hevesi said. "When an official is paid an extraordinary amount of money by those he is supposed to regulate, there is an obvious conflict of interest."

Hevesi's predecessor, H. Carl McCall, chairs the NYSE compensation committee.

Grasso's contract expires in 2007.