Only in America...

[C-lice]

The New York Stock Exchange is giving Richard Grasso, its CEO, a $139.5 million payday. Reward for a job well-done! Grasso has presided over the worst corporate scandals in American history, mostly having to do with stock manipulation which, mysteriously, the NYSE never noticed. During Grasso's tenure the big Wall Street trading houses have paid record fines to the Securities and Exchange Commission for engaging in stock-market fraud -- which, mysteriously, the NYSE never noticed. Under Grasso's watch the whole notion of corporate stock has become synonymous in the public mind with three-card monte. Great job, Dick!


This overpayment is especially grotesque given that the NYSE is a quasi-public institution, supervised by the SEC and operated under a charter that essentially exempts its management from market risk. And bear in mind that like all grotesque CEO overpayments, this money is not popping out of the air -- it is popping out of your pocket. Corporations pay a fee to have their stocks listed on the NYSE. That fee reduces the funds they could otherwise issue as dividends to stockholders, which reduces your mutual-fund and retirement income so that Dick Grasso has more money than he could possibly need. A check for $139.5 million handed to a man for sitting in a government-protected leather chair, who will now cackle as he counts his gold and millions of Americans go to bed crying in anxiety over small sums. (One American in eight lives below the poverty line.) Grasso ought be ashamed. But then, that assumes American CEOs are capable of feeling shame.

[Cool Texan]

C-Lice....which "worst corporate scandal" regarding stock manipulation are you referring to?

[Thumper]

I think we oughta blame the Bush Administration for the whole mess. That can be done in a few one-liners right here on LIG.

"Another Bush Fiasco."

"Bush hands millions to another crook."

"Bush economics again."

I'm sure you can think of many more.......

OR --- You can look at a few facts that might cast some light on the issue:

Consultants who work with the exchange's compensation committee argue that Grasso's total compensation should be compared more with chief executives of financial services firms than with that of the heads of other quasi-public regulatory institutions. That would make his compensation look reasonable by comparison.

Bankers throughout the U.S. who know Grasso spare little praise in commending him for the job he had done during his term.

They note that he has successfully marketed the world's largest exchange globally and ensured that it continues to grow and prosper. The market is operated very well, largely because of his performance. And when the market performs well, your 401(k) is likely to do well.

Industry analysts also cite his brilliant performance in the aftermath of the Sept. 11, 2001, terrorist attacks.

They also note that multi-million-dollar pay packages are a dime a dozen on Wall Street. For example, Citigroup's chairman, Sanford Weill, received a total package of more than $150 million in one year.

And that is the other side of the issue.

[ 09-03-2003, 08:29 AM: Message edited by: Thumper ]

[freespool]

I think a far bigger question is when is Ken Lay going to pay the piper? Pointing the finger of blame at these issues does no good for America,the real solution will be next Nov.,when we take our country back.

[Thumper]

See there, Freespool, I knew you could do it! :grin:

[Cool Texan]

Thumper,

[img]graemlins/applause.gif[/img]

[freespool]

Maybe they should commission a special investigation into this issue. Who could we get? Oh ya Ken Star would fit that job perfectly. Would a 200 million budget be enough?

[Silver Hilton]

I don't want a special commission. I just want the FBI to go down and bust Ken Lay's behind for fraud. He stole (through selling his stock to investors whom he had deceived) millions of dollars. He still enjoys great wealth.

Why, one has to ask, is this man still on the street? The FBI and SEC both report to the President, I believe.

The President's strong beliefs have led to significant enhancement in effort in enforcing terrorism laws and drug laws. One has to believe that if there is not strong enforcement of securities and fraud laws, that it's because President Bush wants it that way.

[Thumper]

Originally posted by Silver Hilton:
The President's strong beliefs have led to significant enhancement in effort in enforcing terrorism laws and drug laws. One has to believe that if there is not strong enforcement of securities and fraud laws, that it's because President Bush wants it that way.

<font size="2" face="verdana,arial,helvetica">Like I said above, SH, I'm sure this is somehow related to Bush. I figured a one-liner would do it. It took you two sentences rather than one, but good job! :grin:

[C-lice]

As I understand it, the NYSE is a not-for-profit organization. Among other duties, it is supposed to watch over many of the major securities firms.

Grasso's compensation is determined by the NYSE's compensation committee. Who serves on the committee? For the most part the members come from the securities firms NYSE regulates. [img]graemlins/eek13.gif[/img]

Charles Elson, Director of the Weinberg Center for Corporate Governance at the University of Delaware, said that Grasso basically received "...an entrepreneurial return for someone who works in a public capacity. He is a regulator."

Let's look at the $139.5 million he received. $40 million was from an "employee savings account", $51.6 million was from "accrued retirement benefits", and $47.9 million is in "prior incentive awards" Grasso's under contract through 2007. Why does he get to cash out this deferred compensation before he retires?

Grasso's income was reported at roughly $10 million in 2002 (which was decided by the compensation committee). Well, somehow, he accumulated the $139.5 million since 1995--his actual pay must have been closer to $20 million per year.

Sanford Patrick Weill? The one whose nomination to the NYSE was going (with Grasso's support)forward despite Weill's being investigated by the SEC for biased stock research?

Grasso served on the boards of Home Depot and Computer Associates. These are both on the NYSE. While not illegal this seems to be a conflict of interest.

I do not deny that Grasso received, and deserved, kudos for getting the NYSE back up and running following the 9-11 attacks. By all accounts that was a herculean effort and it really was what the economy needed at that time. Nor do I deny that other CEOs earn unimaginable sums. I just think that if we look at the fact that Grasso made as much as he did during the time frame that he did, it looks bad. It definitely shakes the faith of the average investor.

It looks like he got preferential treatment and it looks like his actual earnings were inaccurately reported over the past several years. It looks like a good many manipulations have taken place which have benefitted him and hurt the little guy.

I am a registered republican. I voted for Bush in 2000. I will likely vote for him again in '04 (unless McKain somehow gets on the ballot). I have no intention of jumping on the "Bush gives big business the gold mine and the little guy the shaft" bandwagon. I just think that it is very wrong that Grasso got away with what he's gotten away with.

[1pump]

The President's strong beliefs have led to significant enhancement in effort in enforcing terrorism laws and drug laws. One has to believe that if there is not strong enforcement of securities and fraud laws, that it's because President Bush wants it that way.

<font size="2" face="verdana,arial,helvetica">Never underestimate the power of distraction. GW is operating under the assumption that we have an attention span as limited as his. Sadly, he might be right.
Everybody should quit flying American flags on their vehicles and start taping up photos of Ken Lay, Bernie Ebbers and Martha Stewart on their back windows. [img]graemlins/eek13.gif[/img]

[ 09-03-2003, 10:05 PM: Message edited by: 1pump ]

[Cool Texan]

I'm guessing that no one on this thread would have turned down the money if it was offered to you. I know I wouldn't. So what's the problem? I say good for him.

Originally posted by Thumper:
I think we oughta blame the Bush Administration for the whole mess. That can be done in a few one-liners right here on LIG.

"Another Bush Fiasco."

"Bush hands millions to another crook."

"Bush economics again."

<font size="2" face="verdana,arial,helvetica">Now you're talking Jack!!!! I knew someday if you talked to me enough that I could get you to see the light :grin:

[ 09-03-2003, 12:08 PM: Message edited by: Stew ]

[Silver Hilton]

Actually Jack, that was a compliment to Mr. Bush and his administration. The Bush administration has shown themselves to be quite effective in prosecuting their goals, as they define them. If the Bush team wants something, they have shown single minded focus in moving towards the goal, on many fronts, and have been demonstrably effective in doing so. We've seen it in the judiciary, in the environment, the FCC, and in starting wars.

They have also shown the ability to get focused on a variety of trivial issues that might arguably be less important than others facing the nation, the whole gay marriage question, for example. So I don't think they have a limitation of attention span issue.

So, I tend to believe that the Bush team doesn't really want to crack down on executive wrong doing. 1Pump, you may be right, that it's an attention span issue, but I don't think so. While GW may be watching cartoons in the oval office, his team is very sharp, and you can bet that Karl Rove has thought about whether this issue needs a response from the White House. They seem to be making the calculation that busting the Enron executives won't matter in the next election.