NYSE chairman resigns amid lavish pay package row

New York Stock Exchange chairman Dick Grasso has resigned amid rising fury over his $139.5m (€124m) pay package, his 36-year career ruined by cries that he made too much money running the world’s richest financial market.

Mr Grasso opened an emergency meeting of the NYSE board yesterday and said he was prepared to offer his resignation if the board asked him to, according to a source close to the board.

The board requested Mr Grasso step down, and then accepted his resignation, the source said. The board was to reconvene later in the evening to discuss a replacement.

The meeting, which included chief executives from Wall Street’s largest investment banks, began shortly after the market closed.

The resignation came a day after, four major pension fund leaders called for Mr Grasso to step down, condemning his payout as inappropriate for a regulator.

Resentment over the multi-million dollar pay package was coming to a head on the exchange floor, as well, as active seatholders planned to gather after the market closed today to discuss the issue with three directors who are also NYSE members.

The NYSE revealed its top executive’s pay for the first time last month as it announced Mr Grasso’s contract had been extended through 2007. News that he would receive a lump sum payment of $139.5m (€124m) in accrued benefits and tax-deferred savings sent jaws dropping across Wall Street. The funds accumulated over his 36-year career with the exchange, mostly during his eight years as chairman.

Mr Grasso has insisted he did nothing to influence his pay. At a September 9 news conference, when he announced he would forgo another $48m (€42.5m) promised to him under his contract, he said each year when informed of his compensation he responded by saying: “I’m blessed. Thank you.”

Critics, from investor advocates to politicians and traders, say the lavish pay undermines the credibility of the exchange, a not-for-profit institution that is owned by its members and also serves as a regulatory watchdog.

Michael LaBranche, the head of LaBranche & Co., one of the NYSE’s largest stock-trading specialist firms, had come out earlier in the day in favour of a change.

“We are calling for Grasso’s immediate resignation in the interest of the New York Stock Exchange. We think Dick Grasso has to leave now in order for the exchange to move forward and restore investor confidence in the marketplace,” he said.

Traders have reportedly circulated one or more petitions calling for a special meeting to discuss changes at the top of the NYSE. Many have also been critical of the board for approving the hefty pay package.