NYSE chairman Dick Grasso takes the money - early - and runs

[Malachi151]

http://www.canada.com/news/business/story.asp?id=3EE5B44F-6EA7-4D4A-AF6E-9C7BBEA256CD

NEW YORK (AP) - Dick Grasso's $140 million US payout on benefits accrued over 36 years with the New York Stock Exchange sent jaws dropping even in Wall Street's glitziest corner offices.

"It defies the imagination to understand how someone could have amassed that kind of compensation," said Paul Hodgson, a compensation expert with the Corporate Library, a private research group.

Grasso's millions accumulated in three accounts, the NYSE said, particularly over the past 20 years as he rose through the management ranks to become chairman in 1995, a post he'll hold until 2007 under his new contract. The massive withdrawal included $51.6 million US in previously accrued retirement benefits, $47.9 million US related to past incentive awards and $40 million US from a supplemental executive savings account.

"That kind of dough is at the high end of executive deferred compensation accounts, from our experience," said Jonathan Kenter, co-chair of the employee benefits group at law firm Bingham McCutchen.

[Pyrrho]

Damn. You could buy a President or two with that kind of money.

[The Central Scrutinizer]

Good for him.

Are you implying there is something wrong with this?

[Malachi151]

Have a go here:

http://www.forbes.com/2003/05/07/cx_da_0507topnews.html

NEW YORK - The reason chief-executive pay has spun so wildly out of control isn't hard to understand: CEO pay is determined by boards of directors--many of whom are also CEOs or aspiring CEOs who, guided by compensation consultants, seek to have their boss paid at least as well as the next boss. When the boss next door earns more, so too must their boss. It's a one-way ratchet.

Enter Dick Grasso, chairman of the New York Stock Exchange. He received a 2002 pay package valued at more than $10 million, according to The Wall Street Journal. This package came despite an economic downturn, declining share prices, weakening earnings at the Big Board itself and mini-scandals in which several NYSE board members were forced to resign. But at least with his CEO-style compensation, Grasso, 56, and a lifetime staffer at the NYSE, can hold his head high amidst the company he keeps--that is, other CEOs.

[Pyrrho]

The rationale for the high levels of compensation such people receive is that they are being rewarded for the vast benefits their leadership brings to a company. Why should a guy be paid, say, $100,000 when his leadership has increased the company's revenue by $10 billion? I'm not saying I agree with this, but that's what I understand the rationale to be. Kind of like why they pay sports stars so much.

[Mr Manifesto]

Originally posted by The Central Scrutinizer
Good for him.

Are you implying there is something wrong with this?

"These are volatile times... The whole world cries out, 'Peace, freedom and a few less fat bastards eating all the pie.'"

Blackadder, "Sense and Senility", third series.

[The Central Scrutinizer]

Originally posted by Malachi151
Have a go here:

http://www.forbes.com/2003/05/07/cx_da_0507topnews.html



You just post quotes and links. Do you have an opinion?

[corplinx]

""It defies the imagination to understand how someone could have amassed that kind of compensation," said Paul Hodgson, a compensation expert with the Corporate Library, a private research group. "

They asked a guy who does nothing but complain about executive compensation to comment on this? Notice they didn't identify the purpose of his group or the man's slant. Typical slant. If you know that this is the sort of thing Mr. Hodgson says all the time, it has much less impact.

How do you like your media bias today?

[RCNelson]

The article describes the NYSE as "a private not-for-profit institution".

I wonder who is funding the NYSE, and if they have any say in how much to pay the CEO.

[Malachi151]

Well you noticed, if you read the links, that what one thing they are saying is that many exectives and other highly paid people have huge defered compensation packages that they have been building for 20 or so years and that right now many, like Grasso, are taking those payments because they believe that this is the lowest that taxes are going to be for the foreseable future. Bush has essentially created a window of oppertunity for these multi-millionairs and billioniars to take some huge profits and save themselves millions of dollars in taxes.

That's one issue.

The other issue is executive compensation.

This is has been news on CNN, Money Line, and Forbes, run by economic ultra-right winger, Steve Forbes, and in all of these very "conservative" and pro-wealthly new establishments even these people are sayign that they are astonished by this level of executive compensation.

Now, when I read in Forbes that someone's compensations package is shocking to the top executives and analysts in Wall Street then I think its safe to say that yes, this is a shocking level of compensation for the job that was being done.

Keep in mind here that Dick Grasso is chairman of a NON-PROFIT organization. This is what I have said all along, that non-profit organizations don't mean at all that the people working there are not making huge profits, it just means that there are no share holders that make profits.

Now, as for executive pay, as these pieces point out, executive pay is determined by board members. Board members are typically other executives. As they say, Dick Grasso is a board members on Home Depot's board, and the CEO of Home Depot is a board member of the NYSE.

Essentially its all multi-millionairs sitting in a room together patting each other on the back, and saying I'll give you a raise here, if you give me a raise there. Its a total crock of s(*^ essentially.

The last company I worked for was a small compnay, at most it had 40 people. It had board, and our CEO made $400,000 a year, while programmers were getting underpaid by about $10,000 a year and raises were denied for 2 years due to "budget problems" caused by "9/11".

Personally I think our CEO sucked, and I know that they lied to us, and they took away our stock options which is what we recieved as a bonus for exception overtime.

The board consisted of doctors and exectutives from other companies, and investors. These people set the pay for the executives for our little company, and the CEO of our company, which we hired when our company had only 8 people, 6 programmers, a secretary, and a support person, had people on the board who were life long friends of his.

They never met us, they never knew us, they never cared about any of the employees, adn this is a small company! The CEO of this small orgnaization that had only 8 people when he started was getting paid almost half a million dollars a year. Gee, I wonder why we were never able to break even and had to suspend raises for everyone else!? Keep in mind, that this was in Little Rock Arkansas too so the pay was very high for the area.

The entire programming team of 6 people probably made around $300,000 a year.

Our company existed for 1.5 years before the CEO ever came on board.

The one and ONLY product that we had for sale was the single software package, which our development team had created by themselves and was installing, supporting, maintaining, and enhancing. Without the development team there was nothing at all. The company IS the software product. And, given this the entire devleopment team made less money than the CEO!

Without the development team there CEO would be out of a job!

I'm sorry, but there is no way to rationalize that the CEO was more important to the company than the entire development team, there would be no company at all without the software product!

Executive pay is a crock.

Oh, and of course it was grounds for being fired to discuss salary with anyone. After I left I did a little probing though and found out quite a bit.

[corplinx]

Originally posted by Malachi151
The entire programming team of 6 people probably made around $300,000 a year.


Wow, you guys were making big bucks for programmers post-bubble. Here's a clue, the bubble is over. The time when you could skip college and take a highly overpaid programming job is over.

I've eaten my humble pie and taken a nearly 50% paycut. Of course, I was always honest with myself about how overpaid I was during the .bubble.

It's time to realize that programming jobs outside high living cost areas is only a 35-48 range.