Dick Grasso and the New York Stock Exchange

Forget about the money. Sure, a $140 million payout in deferred compensation and retirement bennies to NYSE Chairman Dick Grasso is obscene. So was the $21.8 million he got in 2000 alone or the $25.6 million he gained in 2001 or the $12 million he received last year in salary, bonus, and other compensation.

But the most troubling aspect of this controversy is the fact that the board didn’t disclose these pay practices or much else until now. If it had to reveal Grasso’s compensation earlier, when it was being decided and doled out, the board never would have been so generous. Directors would have known what a firestorm these numbers would have produced. They would have been more diligent in handing out that much money.

Instead, the board flunked the corporate governance test. Its governance procedures rival those of a penny stock company.

Yesterday, when the Exchange gave limited access to the media to documents supplied to the Securities & Exchange Commission, which is investigating Grasso’s outsized compensation, it revealed another governance no-no. Until June of this year, Grasso was recommending all committee membership assignments to the board. In other words, he had far more control than he should have over the very board members who were setting his pay.

The bottom line: This board has got to get its governance act together. It should operate as a role model to all the NYSE-listed companies, a best practice organization for corporate governance. Instead, we’ve got a bunch of rubber-stampers who act as if they’re working in the old Kremlin. There’s little transparency in this joint.