Magazine

The Trials Of Dick Grasso


By Maria Bartiromo Five years ago, Dick Grasso was celebrated for getting the New York Stock Exchange (NYX) up and running almost immediately after the attacks of September 11. Today he is about to go to court to defend himself against a lawsuit brought by New York Attorney General Eliot Spitzer alleging that the $187.5 million pay package Grasso was awarded as head of the Big Board violated a state law requiring that officers of not-for-profit corporations be paid only compensation that is "reasonable." It also alleges that Grasso improperly influenced the amount of his award and that the NYSE board was given incomplete and inaccurate information about the pay package. When I talked with Grasso, he was upbeat but less combative than in the past.

You won kudos for swiftly getting the Big Board back on its feet right after September 11. Now you're about to go to trial. Any bitterness?

None whatsoever. The two are completely unrelated. The response to September 11 was the financial-services business and the government sending a message to the terrorists that they had failed. That they had killed thousands of innocent people and destroyed property but that the target of their attack, the fundamental embodiment of America, would shine brighter than ever before.

Will you settle your case?

We are way beyond the point of talking about settlement. It is important now for...the world to understand that the level of compensation that I received was agreed upon by the most admired and toughest and most responsible people in business. I never negotiated, and I never asked for a nickel. They paid me what they thought I deserved.

Some people might say, sure, the board approved your package, but you basically controlled the board because they were the heads of the listed companies that your exchange was regulating.

That is absolutely incorrect. If you look at the composition of the board throughout my eight years as chairman and CEO, to suggest that someone like [former Ford (F) CEO] Alex Trotman or [former Autodesk (ADSK) CEO] Carol Bartz or [former Goldman Sachs (GS)CEO] Hank Paulson, today this country's Treasury Secretary, was in any way intimidated by Dick Grasso is perfectly silly.

Would Spitzer have gone after you if he weren't running for governor?

I don't believe this has anything to do with his gubernatorial bid. The Attorney General was presented with a request from [interim NYSE Chairman] John Reed to bring this action and was given copies of a report that has been substantially repudiated.... He was misled, and I think the case is misguided. The rhetoric on both sides has been unfortunate.

Any hard feelings toward Paulson? He first gave you high marks and then was instrumental in pushing you out and installing his former Goldman colleague John Thain.

No. Hank was a very tough, fair-minded evaluator of what the exchange paid me when he was a member of the compensation committee, and his call for my removal was a reflection of his opinion at that point in time. There is no malice....I can understand why he chose to do what he did.

Do you regret not taking the NYSE public when you had the chance?

Well, I do. It's very difficult to compare 1999 to 2006, but had we taken it public in 1999, this issue would have never arisen. But you learn early on Wall Street that the tape only moves in one direction. You can't make it go backwards.

Maria Bartiromo is the anchor of CNBC's Closing Bell


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