Motion Denied in NYSE Pay Suit

A judge Wednesday denied a motion by Home Depot Inc. founder Kenneth Langone to dismiss part of a lawsuit over executive compensation at the New York Stock Exchange that targets him.

New York Atty. Gen. Eliot Spitzer has accused Langone, a former chairman of the NYSE’s compensation committee, of misleading other board members about former stock exchange Chairman Richard A. Grasso’s pay. At issue is Grasso’s deferred compensation program, called a capital accumulation plan, or CAP.

“The court said that our case had ‘raised hundreds of issues’ for which Mr. Langone must answer,” Spitzer spokesman Darren Dopp said. “We are gratified that the court agrees with us, and look forward to a trial on our claims.”

The trial date was moved up a month, to Sept. 5.

Langone spokesman Jim McCarthy had no immediate comment. Grasso and Langone have both said they did nothing illegal.

“We’re ready for trial,” Spitzer said Wednesday before the decision.

Lawyers for Langone filed this statement in a New York state court in January: “Far from misleading the board ... both Langone and his predecessors, as chairmen of the compensation committee, took pains to ensure that the board repeatedly was informed about Grasso’s compensation and, specifically, his CAP awards.”

Spitzer is seeking the return of at least $100 million from Grasso. Meanwhile, the former chairman has countersued the NYSE for $50 million, claiming defamation and breach of a contract he said was thoroughly understood and legitimate.

Grasso headed the world’s largest stock market for eight years before resigning under fire a month after signing a new contract in 2003.

A review commissioned by the NYSE board after Grasso left claimed that as much as $156.7 million of the pay package for Grasso was excessive.

Langone is a Grasso ally who opposes Spitzer’s campaign for governor.