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NYSE to Disclose Pay of Its Execs, Bar Them From Company Boards

June 06, 2003|From Bloomberg News

The New York Stock Exchange will disclose the pay of its top executives and bar them from sitting on company boards, responding to criticism from regulators that the world's biggest equity market failed to meet the standards it demands from its listed companies.

The reforms adopted Thursday by the exchange's 27-person board were among 10 developed by a panel led by former New York State Controller H. Carl McCall and ex-Clinton administration Chief of Staff Leon E. Panetta.

"This is designed to be a first step in a substantial series of initiatives designed to bring the exchange's corporate governance in line with those of our listed companies," NYSE Chairman and Chief Executive Richard Grasso said.

Securities and Exchange Commission Chairman William Donaldson in March ordered the NYSE and nine other exchanges to tell him how they are ensuring their governance provides ethical models for their members. Shareholder activists and some government officials, including New York Atty. Gen. Eliot Spitzer, have criticized the Big Board for not adequately representing individual investors.

The exchange said Thursday that it would require its compensation and audit committees to include only directors from outside the securities industry.

Senior NYSE officers serving on the boards of listed companies must leave them by the companies' next shareholder meeting.

Grasso, 56, said he would leave the board of Home Depot Inc. as soon as a replacement is found. Grasso is a member of the board's compensation and governance committees.

Spitzer applauded the NYSE for "quickly and forthrightly" making the changes.

The NYSE also said it would begin disclosing the pay of Grasso, the exchange's next four highest-paid employees and its directors in its 2003 annual report, which will be published next year.

Grasso made $12 million last year and more than $15 million in 2001, according to people familiar with his pay and benefits.

In addition to the changes made Thursday, McCall and Panetta said the governance committee will recommend others in months to come involving board representation, length of service and other criteria that require changes in the exchange constitution.

"Everything is on the table," Grasso said when asked if the exchange might consider splitting his role as chairman and CEO with another person.

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