Eliot Spitzer Sues Dick Grasso Over Pay Package

by Glen Shapiro, LawAndTax-News.com, New York

26 May 2004

It emerged on Monday that New York's Attorney General, Eliot Spitzer, has launched a lawsuit against former head of the New York Stock Exchange (NYSE), Dick Grasso, over the latter's more than $200 million combined pay and severance package.

Speaking with regard to the action filed in New York's State Supreme Court, which also names former chairman of the NYSE compensation committee, Kenneth Langone as a defendant, Mr Spitzer argued that:

"You can't pay the head of (a) not-for-profit (organisation) that much money. It's simply too much, it's not reasonable, it's not right, it violates the law."

Although the Attorney General has not named the specific amount that he hopes to recover from the former NYSE chief, he is said to be looking for the return of at least $100 million.

In addition to querying the size of the compensation package, Mr Spitzer also suggested that Mr Grasso misled exchange directors with regard to his pay, and that he intimidated NYSE board members into supporting the pay awards.

In a statement released following the launch of the lawsuit against him, Mr Grasso announced that:

"I'm disappointed that New York's attorney general has chosen to intervene in what amounts to be a commercial dispute between my former employer and me. I look forward to a complete vindication in court and fully expect that my fellow NYSE directors and I will be adjudicated to have acted completely in accord with our fiduciary responsibilities and always in the best interests of the exchange."

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