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Grasso's Pay Becomes a Classroom Lesson

Teachers and students express amazement and outrage at the NYSE chief's compensation.

September 15, 2003|Ann Saphir | Bloomberg News

Peter White, New York state's teacher of the year in 1999, said Wall Street floor traders "grossly understate the matter" when they call New York Stock Exchange Chairman Richard Grasso's pay package excessive.

"Words like loathsome, dishonorable and scandalous more aptly describe it," said White, who teaches social studies at Northport High School on Long Island. "If, as records show, Grasso handpicked the chairman and members of the committee that approved his nearly $190-million package, then Grasso's simple resignation is not enough. He should give the money back."

Grasso's salary has become the talk of classrooms nationwide.

His pay increased to $25.5 million in 2001 from $2.2 million in 1995, the year he became chairman and chief executive, boosting his total compensation to at least $188 million. He agreed last week to forgo $48 million. Grasso also said he never was part of the pay discussion and has no plans to resign.

The average U.S. worker would need 5,261 years to earn as much as Grasso, based on a 40-hour workweek.

"The entire life spent in honor of stocks and manipulating money is the anti-life," said Stanley Bosworth, headmaster of St. Ann's, a private school in Brooklyn. "It doesn't bring them closer to the beating heart and the wonder of nature."

George Davison, headmaster of Grace Church School in Manhattan, a private institution where the average teacher salary is $54,000 a year, said his students would judge Grasso's pay by measuring him against Jason Giambi, the Yankee first baseman who signed a seven-year contract worth $120 million.

"They would talk about how Jason Giambi creates value," Davison said.

"Is there value added, and how did they calculate that?" said Gregory Donadio, who has taught economics and history at Horace Mann School in the Bronx for 27 years "I think he's overpaid. It's a sort of an incestuous system. He has great influence on the people on the compensation committee, and there was a total lack of transparency over the years."

David Lewin, senior associate dean of the MBA program at UCLA's Anderson School, said the salary "is so seemingly out of line, not only does it seem unrelated to the performance of the organization, it borders on a scam."

Finance teacher Joan Harris turned to her students in a classroom at Carl Schurz High School on the northwest side of Chicago last Friday.

"Should he resign, this guy that made all this money?" Harris asked, referring to Grasso. "What has he done for the New York Stock Exchange?"

The class voted 17 to 3 to reduce Grasso's pay, though none said he should be fired.

"I never knew you could make so much money in such a short time," said Sandy Flores, a junior. "He could help other people who need help."

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