WALL STREET WHACKINESS
WSJ is still puzzled by this week’s resignation of Richard Grasso and the mini-scandal that preceded it.
Dick Grasso, one of the better leaders the New York Stock Exchange has had and a man still in the prime of his career, was forced to resign this week for the crime of . . . being overpaid?
This would certainly puzzle the proverbial visitor from Mars, unless he’d lived through the past 24 months of corporate scandal. Mr. Grasso was booted not just for his shockingly big pay package, but for the fact that the responsible board members were surprised and bemused by the discovery that they’d paid him so much. The head of the board’s compensation committee, H. Carl McCall, whose most recent day job involved looking after billions in New York State pension funds, somehow lost track of the fact that he’d signed off on $140 million in accumulated pay and benefits for Mr. Grasso.
How to get from here to there? Mr. Grasso is gone, though frankly we’d rather have kept him as CEO and brought in a new board, one that would have set a strict timetable for taking the exchange public. Now things have to be done the hard way. First get a new CEO, then a clean sweep of the board. Mr. McCall and company have already forfeited the confidence of the investing public as caretakers of the exchange’s public image. They’d hardly do much better as caretakers of the nest eggs of investors who might be tempted to buy shares in a publicly traded NYSE Corp.