Hurricane Isabel hasn’t made it up the East Coast yet, but the storm that has engulfed the New York Stock Exchange is over, and Richard Grasso is gone, tossed aside like just another piece of plywood in the wreckage of a trailer park. It’s an expensive piece of plywood, mind you — the man is owed $140 million for his years of service — but he’s history all the same.
The lesson is a chilling one for many CEOs, who happily justified the millions they were paid, performance aside, because their board of directors had given the OK. But now, things are different: In recent months, lots of CEOs have gotten the boot for poor performance, particularly if they made big bucks in the process (though not all: See FC’s November cover story, “CEOs Who Should Lose Their Jobs”). In this case, Grasso was universally considered to be doing a good job. Yet he’s outta there in this new, no-tolerance environment for any CEO who commits the sin of getting caught with hands in the till.
Let’s not forget, either, that Grasso’s board did approve his package, although some have suggested that they didn’t understand or didn’t know what they approved. Maybe we should add a few more pink slips to the stack — this time from some members of NYSE’s board. Paying attention is generally a good first step in good governance.