VANCOUVER –   I know dick all about the financial market, especially the New York Stock Exchange in particular, but Richard Grasso’s resignation as chairman and chief executive officer of the NYSE is significant news considering the situation surrounding his leave taking.

Dick Grasso has been hailed by some as the Winston Churchill of the American economy, what with the defiant symbolism he embodied in the aftermath of September 11th, 2001, re-opening the exchange after the terrorism attacks that destroyed perhaps American capitalism’s most vivid symbol.  Grasso’s work as head of the NYSE has been widely respected, and it’s only because of his exorbitant pay packet that’s got everyone’s knickers in a knot and which led to his spectacular ouster.

Is it as the New York Post and the New York Times, at the time likened it to, all about greed?  Dick Grasso’s salary had never been public knowledge until late this summer when it was revealed that he stood to receive nearly $200 million.  The large sum was not all salary, but included deferred benefits as well, which accrued after nearly 36 years working at the exchange.  Grasso’s tenure at the NYSE began in the late 1960s when he took up a clerk’s position earning $82.50 per week.  He moved up the ranks the old fashioned way to become chair, and it would appear that some resented his less than silver spooned background that the sniping began.

The New York Times likened Grasso as another symbol in that pantheon of great American capitalistic greed.  Alongside Jack Welch, the former head of General Electric, Grasso, was being lumped in with people like Sandy Weill, Bernie Ebbers, Martha Stewart and the other faces from WorldCom and Enron.  However like Welch, Grasso hardly did anything wrong.  He did his job, and some will say rather admirably.  But the demise of Welch last summer, and Grasso’s this, is all thanks to that terrible cliché of perception equalling reality.  Gathering the largesse of other’s hard work is hardly a palatable swallow for the public.  Jack Welch’s public capital evaporated last year when his divorce proceedings revealed that he was living it large, thanks to an exorbitant retirement package that included stamps, jets, tickets to the US Open and newspaper delivery, even after he ceased to be head of GE.  The media compounded the situation by reporting this daily, and the public’s discontent with the situation swelled, seeing Welch voluntarily forgo his benefits.  Seniors and retirees whose 401k’s were beholden to the rampant instability of the free market, found themselves rather bitter that Welch was well-taken care of, while they were barely making ends meet, what with their pensions taking a dive along with the economy.  Some argued that they were eating cardboard and dog food, while former chairman Welch was alive and well in his penthouse overlooking Central Park West.

So while Page Six and all the tabloids in the Big Apple have knocked Jack Welch’s peccadilloes in favour of Dick Grasso’s demise as head of the NYSE, some questions are invariably asked.  Was Dick Grasso worth the nearly $200 million he was set to receive?  Perhaps, considering that the NYSE is a vital part of the American economy, and as head he deserved the appropriate compensation.  And don’t forget as well that before his resignation he voluntarily chose to forgo around $48 million of that cheque.  That said, being somewhat of a faraway admirer of Grasso’s, what prompted his ouster was not the amount he was given, but the method to which he was awarded such largesse.  As well, the procedure to which he was awarded such a generous pay package doesn’t jive well, with those that expect and now have to demand a free and unfettered market that should also include be transparent and clean-looking.

Martha Stewart, who by the way, is a friend of Grasso’s, and who was brought onto the board of the NYSE at Grasso’s invitation and nomination, and who had to leave the board when her ImClone scandal broke, got a lot of attention over her apparent greed.  She unlike her public demeanour was revealed through her actions to be as voracious as the rest of us when it came to her pocketbook.  Did it look appropriate that Grasso was getting such a charitable salary, while those that live and die thanks to the market he governed were getting the snot kicked out of them, thanks to a plethora of exigencies, like September 11^th, WorldCom, Enron, and the sort?  Well no, but then it wasn’t really Grasso’s fault.  Clearly, I am mightily surprised that the NYSE is not as transparent as it should be.  Why wasn’t Grasso’s pay packet revealed until recently?  And then when it’s revealed that Grasso’s reward was not determined by him, but by the board of the exchange, then the stickiness is apparent.  Think about it, Grasso as the head of the NYSE, is also the regulator of all the companies that are on the exchange.  These are companies which have equally human leaders, who aren’t known for their humanitarian tendencies as much as for their capitalist ones.  And that’s perfectly normal as the investors in this audience will attest to.  But when we see Grasso trying to slay the perception of greed and unencumbered sleaze and malfeasance in corporate America, through his position as head of the NYSE, and at the same time his tenure is regulated by the people he’s trying to police, then it isn’t all that clean and good.  Frankly, Grasso’s ouster was justified.

However, those responsible for Grasso’s resignation, or those that called for it at least, need to realise that just because Grasso is gone, doesn’t mean everything is fine now.  Sure John Reed will be paid a dollar-a-year instead, but what about the perception that greed is rampant in corporate America?  What about the situation at the NYSE where the two top jobs, that of Chairman and that of Chief Executive Officer are lumped into one task?  Some have said Grasso was hard at work trying to clean up some of the malfeasance amongst the companies that trade on NYSE, and it looks as if they wanted to do him in, before he did.  One will have to see then, if those left at the NYSE, people like Carl McCall and Leon Panetta, and those who spoke out for his resignation, will be able to lighten the ugly perception had at the exchange and had around corporate America in general.  Those that saw Dick Grasso as the problem and saw his ouster as an ends to the situation at hand, are wrong.  I suspect that down the line, it’ll show that it wasn’t his fault at all, and that he didn’t have to go this way.

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©2003 Joseph Planta.