Tthe show goes on

New York, Oct. 11 (Reuters): Less than a month after the disclosure of Richard Grasso’s huge pay package cost the New York Stock Exchange chairman his job, the Big Board on Friday said his two top lieutenants stand to receive at least $22 million apiece when they retire.

Documents provided by the exchange revealed that the two executives, Big Board co-presidents Catherine Kinney and Robert Britz, each made about $2.7 million in salary and bonuses in 2002. The NYSE said its compensation package for its 23-member senior management team could top $125 million.

The exchange said the compensation packages were approved by Grasso and the NYSE board’s compensation committee.

The figures are “out of the ballpark” when compared with salaries of other US exchanges, said an official at the $145 billion California Public Employees’ Retirement System, the biggest US public pension fund.

“I would encourage Chairman Reed to immediately seek to renegotiate these contracts,” said Sean Harrigan, Calpers board president.

Interim NYSE chief John Reed said the exchange would modify some of the components of its pension and deferred-compensation plans. He gave no details, but said executive pay had to reflect the need to “have the very best management”.

Reed, who came out of retirement to take his interim position at the exchange, has been charged with reforming the Big Board’s management structure in a way that mitigates any conflict of interest in the exchange’s dual role as regulator and a securities marketplace.

“It’s clear that the exchange has benchmarked itself against the financial industry in general, because these levels of pay are what you expect to find perhaps at the largest financial corporations,” said Espen Eckbo, founding director of the Center for Corporate Governance at Dartmouth College.

“My personal view is that they need to reduce the level of comparables; they need to look at themselves differently than they have,” he said.

An NYSE spokesman said that neither Britz nor Kinney was available for comment.

Grasso resigned on September 17 after it was revealed that his compensation and benefits package totalled $188 million.

His departure came shortly after big investors and public pension funds, including Calpers, called for him to resign, saying the disclosure had shocked investors and shaken faith in the financial system.

Britz is a 30-year veteran of the NYSE and Kinney has worked there for 28 years. Since Grasso’s resignation, NYSE members have called for the exchange to open its books and disclose the compensation of top executives, particularly the compensation of Kinney and Britz, saying they were largely unaware of the hefty sum Grasso was able to accumulate.

While Grasso was pressured to resign follow disclosure of his pay package, it is not expected that Kinney and Britz will feel the same heat.

Reed has voiced the need to retain experienced board members to assist him in pushing through some of the changes being proposed.