NYSE Co-Presidents Due $28 Million Each

Robert Britz and Catherine Kinney, the top deputies of ousted New York Stock Exchange Chairman Richard Grasso, each stand to collect as much as $28 million in deferred compensation, people familiar with their pay said.

The NYSE’s co-presidents, elevated to their positions in January 2002, benefited from the same executive compensation plan that enriched Grasso. As with Grasso’s package, most of Britz’s and Kinney’s pay has accumulated since 1998, when the NYSE adopted a new pay plan, and came in the form of bonuses on top their salaries of between $500,000 and $600,000 a year.

Institutional investors, including the California State Teachers’ Retirement System, and many NYSE members, criticized Grasso’s $187.5-million pay package. Those complaints led to Grasso’s forced departure. Interim Chairman John S. Reed told members this week that they wouldn’t be “happy” when the compensation for Britz and Kinney was disclosed.

“If this is perceived as an outrageous grab, their effectiveness at the exchange will be damaged,” said James Angel, an associate professor of finance at Georgetown University.

Kinney and Britz each received incentive bonuses of $2.3 million in February 2002, according to compensation committee minutes released by the NYSE last month. In February 2003, Grasso recommended they each receive a $1.97-million incentive bonus and $983,334 in deferred pay.

The NYSE declined to comment and indicated Britz and Kinney would have no comment.

The exchange has come under pressure to release more details about the pay of top officers since Grasso’s departure. Some institutional investors said they were outraged by the size of Grasso’s compensation, largely because the board that made the decision consisted of chief executives of companies regulated by the NYSE.

Grasso was the only NYSE official who had a contract and left with his pension benefits fully vested, meaning he was entitled to take it all.

The benefits for Britz, 52, and Kinney, 51, weren’t fully vested, the people familiar with their pay said.

Reed is expected to announce the compensation of other top exchange officials this week, the people said. He also plans to revise the formula used for calculating pay so that executive compensation doesn’t accumulate so fast, the people said.

As the SEC and investor groups increase scrutiny of exchange executives’ pay, American Stock Exchange Chairman Salvatore Sodano told Amex members and employees that he was entitled to $12.4 million of retirement benefits next year.