The Telegraph
Since 1st March, 1999
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Wall Street fat cat quits under fire over pay

New York, Sept. 18 (Reuters): Richard Grasso, the head of the New York Stock Exchange, has resigned in the face of mounting pressure from investors, regulators and top Wall Street firms over his $140 million pay package. Grasso’s departure came two years to the day after he triumphantly reopened the exchange after the September 11 attacks.

While Grasso’s record of building the exchange’s business was never in question, the public outcry over the size of the 57-year-old executive’s compensation and lack of disclosure about it cost him the support of key Wall Street figures.

The criticism mounted in recent days, with calls for his resignation coming from top state pension funds, floor traders and politicians. Grasso bowed to the pressure and tendered his resignation at an emergency board meeting held shortly after the market closed on Wednesday.

Among the board members to call for Grasso’s resignation were three leading Wall Street chiefs: Henry Paulson, who runs Goldman Sachs Group Inc; Philip Purcell, head of Morgan Stanley; and William Harrison, head of J.P. Morgan Chase & Co., a source familiar with the meeting said.

“Grasso’s resignation was a necessary step to restore confidence in the exchange,” said California controller Steve Westly, who sits on boards of California’s giant state pension funds. “It is a breath of fresh air for the markets.”

The NYSE board, however, has failed to persuade one of its own members to run things on an interim basis.

Larry Sonsini, a prominent West Coast securities lawyer and NYSE director, was asked to replace Grasso temporarily, but turned the offer down after being given just a few hours to consider it, people familiar with the matter said.

The resignation came at the end of a tumultuous week. Grasso, who worked for the NYSE for 36 years and was its chief executive since 1995, watched his support among the exchange’s members weaken dramatically.

Stock market participants were particularly keen to see the furore surrounding Grasso’s payout die down — especially after a batch of accounting and executive compensation scandals in the last three years did little to stave off the bear market.

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