NYSE's top executives are owed $133m on
retirement
October 13, 2003
By
Bloomberg
New York - The New York Stock Exchange (NYSE)
said last week it owed its top executives about $133 million
in deferred pay, including $22 million each for co-presidents
Robert Britz and Catherine Kinney, the deputies of ousted
chairman Richard Grasso.
The obligations reflect
practices established under Grasso, who was pushed out in
September after the exchange disclosed that he had accumulated
$188 million in deferred pay.
Interim chairman John
Reed wrote in a memo to members, posted on the NYSE's website,
that he would modify the pay system. The exchange revealed
senior executives' compensation for the first
time.
"These were pretty darn lavish packages," said
Sean Harrigan, president of the California Public Employees'
Retirement System, the top US pension fund.
Reed needs
Britz and Kinney, 30-year NYSE veterans, to run day-to-day
operations. He signalled in his letter that he was not
planning an overhaul in management. The stock exchange "must
keep and have the very best management".
The combined
$273 million that was paid to Grasso and is due to the
exchange's top 59 executives amounts to almost 10 times last
year's $28.1 million net income at the NYSE.
Traders
have complained of rising fees as executives' compensation has
climbed.
Reed is scheduled to meet state treasurers
tomorrow to discuss pay at the exchange and how it is
governed. Pension funds have also called for the exchange to
spin off its regulatory unit, in part so exchange directors do
not have to set the pay of executives who police their
businesses.
Britz and William Johnston, president from
1996 until January 2002, earned $36 million each in salary,
bonuses and retirement pay. Kinney will get $35 million.
Spokesperson Ray Pellecchia said the NYSE was prepared to pay
the obligations.
As of December 31 2002, it had $927
million in securities and $36 million in cash, according to
its annual report.
In addition to the top six
executives, who are due $73.2 million in lump sum retirement
payments, the exchange estimated 17 senior vice-presidents
were due $55 million and 36 other officers were owed $4.8
million, according to the website.
"I'm pleased the
numbers were disclosed but I find them shockingly high," said
NYSE member and retired trader John Jakobson. "As yet there is
no evidence that they deserved this."
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