Grasso Attacks Lawsuit as Political
Former New York Stock Exchange head Richard Grasso, who was sued Monday by New York Atty. Gen. Eliot Spitzer over his pay package, went on the offensive Tuesday and lashed out at his critics.
Showing little inclination to settle the accusations against him, Grasso said in a Wall Street Journal op-ed piece that Spitzer’s suit was political.
Grasso also took aim at John S. Reed, who succeeded him as chairman of the NYSE. He accused Reed of leaking information to the media to pressure the former chairman into returning his multimillion-dollar payout.
Grasso, 57, said he would sue the NYSE for $48 million still owed him under his pay package and would donate the net proceeds to charity if he won.
On Monday, Spitzer filed a civil suit seeking the return of the bulk of Grasso’s $188.5 million in compensation. Public disclosure of the details of Grasso’s pay in September led to his ouster -- one month after he had been paid $139.5 million of the total, representing bonuses and retirement benefits accumulated since 1999.
Grasso, who had been chairman and chief executive of the NYSE since 1995, having risen through the ranks since 1968, should return “at least” $100 million of the money because it violated New York law governing pay for executives at not-for-profit entities, Spitzer said.
The lawsuit also accused Grasso of manipulating the NYSE board.
But Grasso, in the Wall Street Journal piece, issued a blistering denunciation of his accusers, calling their behavior “immoral and dishonest” and saying they had “besmirched” his name.
Although the NYSE has maintained that Grasso left the exchange on his own, Grasso said Tuesday that he was fired.
“The exchange board was unwilling to stand by its own earlier action in the wake of a media firestorm, and turned around and fired me for receiving the compensation that the same board had awarded,” he wrote.
He also said that “Spitzer’s decision to intervene in a commercial dispute between the New York Stock Exchange and me over my compensation and retirement benefits smacks of politics.”
Grasso wrote that “Spitzer’s decision to sue me and not Mr. [H. Carl] McCall, who signed the new [pay] contract ... or the powerful CEOs who voted for my compensation year after year, makes clear that Mr. Spitzer is running for governor, and running hard.”
Last year Spitzer, a Democrat, publicly stated that he was considering a run for New York governor in 2006.
McCall, a top figure in the New York Democratic party, headed the NYSE board’s compensation committee when Grasso’s pay was approved.
Grasso said Spitzer “badly needs the support of Mr. McCall, and the others who made the decisions now under attack.”
Spitzer’s suit did not name the heads of leading Wall Street firms, such as Bear Stearns Cos.’ James Cayne and Goldman Sachs Group’s Henry Paulson, both of whom served on the NYSE compensation committee.
Grasso also attacked Reed, saying that “throughout this ordeal ... Reed never once approached me to discuss a settlement. Instead, he maligned me in the media, sent a letter last February demanding that I return more than $120 million without even explaining how he arrived at that number....”
An NYSE spokesman could not be reached for comment.
“Those who thought they could break me with their repeated media leaks badly underestimated my character and resolve,” Grasso wrote.
