NYSE Donations Rocketed for Charities Linked to Pay Panelists

The New York Stock Exchange’s charitable contributions to organizations affiliated with members of the board’s compensation committee have climbed 63-fold since 1995 as Chairman Richard Grasso’s pay soared.

Donations to charities and civic and professional groups supported by members of the pay panel, which in August gave Grasso a package worth $140 million, rose to $1.3 million last year from $21,500 in 1995, according to NYSE documents.

The NYSE’s support of the favorite causes of people who set Grasso’s pay may influence their judgment, said Charles Elson, head of the University of Delaware’s Center for Corporate Governance.

“Whenever you donate to a charity in which a director sits, it raises questions,” Elson said. “The fear is that those donations may compromise a director’s objectivity.”

In 2001, when Grasso earned $25.5 million, his highest pay ever, the exchange gave $81,050 to charities affiliated with Kenneth Langone, the chairman of the compensation committee from 1999 until June.

Langone, chairman of Invemed Associates Inc., didn’t return a call for comment.

Robert Zito, the exchange’s executive vice president for communications, said all of the exchange’s giving is based on merit and made without regard to personal connections.