New York Stock Exchange: Regulating the Regulator

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Article Details

Pub. Date	:	January, 2004
Product Name	:	Effective Executive
Product Type	:	Business Ethics & Corporate Governance
Product Code	:	EEBS10401
Author Name	:	Sanjib Dutta and K Subhadra
Availability	:	YES
Subject/Domain	:	Management
Download Format	:	PDF Format
No. of Pages	:

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Description

The New York Stock Exchange (NYSE) was in news recently for all the wrong reasons. It was criticized for its governance practices which led to the resignation of its Chairman and CEO. The interim chairman and CEO took various steps to reform NYSE

On September 18, 2003 Richard Grasso, Chairman and CEO of New York Stock Exchange (NYSE) resigned amidst widespread criticism against his pay package and governance practices at NYSE. Earlier in August 2003, NYSE announced that Grasso received a lump sum amount of $140 mn from NYSE (covering two decades of deferred compensation, and retirement benefits). The exchange also announced that Grasso's contract was extended up to 2007 with an annual pay of $1.4 mn and $1mn annual bonus.

William Donaldson, Chief of Securities and Exchange Commission (SEC)¹ commented that Grasso's compensation details raised serious doubts about governance standards at the NYSE. Donaldson sent a letter to the compensation committee head—Carl McCall asking for more details about how Grasso's compensation was decided.

Keywords

New York Stock Exchange, Regulating the Regulator,Indian Economy,investment policies,foreign investors,China,Brazil, business & economics, New York Stock Exchange (NYSE), news , reasons, governance practices, Securities and Exchange Commission,Grasso's contract.