(500-600 words, each question as its own paragraph, make it easy to read, do not write the questions, need it by 1:30pm today)On September 17, 2003, Richard A. Grasso resigned his position as chairman and CEO of the New York Stock Exchange (NYSE). At the time of his resignation, Grasso had not been charged with doing anything illegal. Rather, he was forced to resign on the grounds that his compensation was excessive. In other words, Grasso was paid too much.How did charges of overcompensation become grounds for resignation? After all, the NYSE board had approved Grasso’s latest pay package just 41 days earlier. The approved package allowed him to transfer $140 million in retirement and bonus money to his personal account before he retired. Critics of Grasso’s compensation package, however, argue that the board’s decision was based on Grasso’s deception as well as a series of errors in governance.Grasso was not born wealthy. His father abandoned his mother when he was a very young child. Grasso dropped out of college and later began his career as an $80-a-week clerk for the chairman of the NYSE. In other words, he was a person who worked very hard his entire life and overcame many obstacles to achieve success. If anyone had a right to feel entitled, perhaps Grasso did. When he resigned, Grasso had been at the NYSE for 36 years.Compensation the Key Dispute IssueA key issue in Grasso’s pay dispute was whether the CEO of the NYSE should be paid a salary comparable to that of a major corporate CEO. In 1995, the chairman of NYSE’s compensation committee—who at the time was Stanley Gault, the CEO of Goodyear—argued that the CEO’s pay should be comparable to the pay of CEOs at major corporations. Gault’s concern was that the NYSE would lose talented employees to the private sector if it was unable to match the private sector’s compensation for comparable jobs. Gault prevailed in spite of the fact that the NYSE is not really comparable to a major for-profit corporation. Instead, it is a relatively small not-for-profit organization whose primary purpose is regulation. There are huge differences between the NYSE and a large for-profit-corporation in terms of the number of employees, responsibility, and revenues.Grasso began his tenure as CEO of the NYSE in 1995. Under Grasso’s 1995 contract, he received a base salary of $1.4 million plus a bonus. The bonus amount was calculated as follows: As a benchmark, consultants calculated the median pay for the CEOs of selected companies (which included huge corporations like Citigroup and AIG). This amount was first reduced by 10 percent and then multiplied by a performance score called the Chairman’s Award. Grasso had a voice in determining that score, which could cause Mr. Grasso’s pay to exceed the median pay earned by CEOs at the selected companies.The bonus became even more generous under the direction of Ken Langone, whom Grasso himself appointed chair of the compensation committee in 1999. Langone’s philosophy was “you can’t pay a great manager enough money.” In 2000, for example, the board unanimously approved the compensation committee’s recommendation for a bonus award that reportedly exceeded the benchmark by $15.7 million. Grasso made $26.8 million that year. After September 11, 2001, when Grasso was lauded as a hero for getting the NYSE back in business soon after the terrorist attacks, his total pay package was $30.6 million.Meanwhile, Grasso’s retirement fund was growing at a tremendous rate because of several unusual provisions. Senior executives’ pension payouts usually depend on their tenure with the company and the average salaries they receive in their highest-earning years. Grasso not only was credited with extra years of service, but he earned pension dollars based in part on his big cash bonuses. In contrast, the CEOs of large corporations—such as the CEOs who made up his benchmark group—generally receive much of their compensation in the form of stock grants and options, which are not included in the computation of their pension benefits. As a result of beneficial provisions, during some years, Grasso could actually earn as much as $6.8 million in retirement benefits for every $1 million in bonuses!In January 2003, Grasso announced that he wanted to take all the money out of his retirement account—nearly $140 million—in return for staying on as CEO through mid-2007. (Normally, of course, he would have been entitled to his retirement funds at the time he retired.) In August, the board agreed and issued a press release announcing that Grasso would stay on as CEO and disclosing the $140 million payout.Greed or Merit?Once the payout became public, there was a firestorm of outrage. The press was relentless, and there were many calls for Grasso’s resignation. On September 17, 2003, the board, in a 13 to 7 vote, asked Grasso to resign, and he agreed. Then, in May 2004, New York State Attorney General Eliot Spitzer filed a civil suit against Grasso under New York State’s Not-for-Profit Corporation Law, which requires the compensation practices in nonprofit corporations to be “reasonable.” Spitzer also named Langone in the lawsuit but concluded that the rest of the NYSE board had been deceived when they approved various aspects of Grasso’s pay and benefits packages.What can we conclude about the fairness of Grasso’s compensation? On the one hand, there is no question that the NYSE prospered under Grasso’s leadership. Listings had gone up and market share had increased, as had the value of a chair on the exchange. New computer technology that would have decreased profits had been rejected. And everyone admits that Grasso was heroic in getting the NYSE reopened after the September 11 attacks.On the other hand, some information might lead us to believe that greed also played a role. There are indications that Grasso jealously guarded his benefits and perks. Although the board may not have known the full amount of Grasso’s pension benefits, Grasso’s executive assistant testified that Grasso received regular updates from human resources on the value of his pension. He once withdrew $6 million in retirement savings to buy a new house. Each year, he cashed out a week of unused vacation time, and he once charged a $759 pair of sunglasses to his expense account with the justification that the sunglasses were needed to limit glare during on-camera interviews.Subsequent RevelationsAfter the scandal broke, the NYSE commissioned an investigation under the leadership of former federal prosecutor Dan Webb. At first, the NYSE refused to make Webb’s findings public or even to turn it over to Grasso’s defense team. They argued that the report was protected under attorney-client privilege. Protracted court battles on release of the report did not end until early 2005, when a New York court ruled that the report was not legal advice and thus was not protected under attorney-client privilege.The Webb report, as it is now known, was not favorable to Grasso. It contended that the New York Stock Exchange had not used good governance practices, because Grasso had been involved in the process that calculated his pay and benefits. As evidence, the report noted that Grasso had “personally selected which board members served on the compensation committee, and some directors he selected were those with whom he had friendships or personal relationships.” The report was also willing to pass moral judgment on the size of the benefits package, concluding that Grasso’s pension benefits were “several times more than what a reasonable pension would have been.” Overall, there is general agreement that the report found Grasso’s pay excessive.Potentially more serious allegations also arose. SEC lawyers asked Grasso if he had attempted to prop up the price of stock of the AIG Corporation as a gesture of friendship for Maurice R. Greenberg, then chairman and CEO of AIG. Specifically, Grasso was asked if he had put pressure on AIG specialists at Spear, Leeds, and Kellogg, a unit of Goldman Sachs, to support the price of AIG stock, in part by setting up a $17 million fund to buy AIG shares. The
state was expected to argue that Grasso was motivated to do Greenberg favors because Greenberg was a member of the NYSE compensation committee from 1996 to 2002. Spitzer contended that Grasso was guilty of a conflict of interest because his position with the NYSE gave him regulatory authority over companies, like AIG, whose CEOs approved his pay.Grasso’s trial was originally scheduled to begin October 30, 2006, but it never happened. In June 2008 speculation began that the Grasso case was falling apart. Within a month the entire case was dismissed and Grasso was able to keep all of the money.DISCUSSION QUESTIONS 1. Was Grasso justly paid for being a great manager and protecting the interests of the NYSE, or was his compensation excessive? Defend your answer.2. Did the board of the NYSE act responsibly in this matter? Why or why not? Were the alleged conflicts of interest real or merely apparent? Explain.3. Was Grasso simply a victim of certain character flaws? Of political forces that required more disclosure after the Enron and other corporate scandals in late 2001? Discuss your answer.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Essay Fountain
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Nutrition, Hospitality & Human Services
Thank you for the revision.
Customer 452919, April 16th, 2024
Social Work and Human Services
Thank you for presenting the paper n-time. The team is getting much better. I have used you guys for a at least 4 semesters and will continue throughout my college career.
Customer 452919, February 21st, 2024
Thank you Team!
Customer 452919, April 5th, 2022
Thank you. You all have been timely, and amazing.
Customer 452919, May 3rd, 2022
Customer 452725, April 23rd, 2021
The presentation slides were not narrated as asked per the instructions.
Customer 452623, September 28th, 2021
Great Job !!
Customer 453117, September 17th, 2022
Biology (and other Life Sciences)
Thank you
Customer 452995, November 22nd, 2021
Best service hands down.
Customer 452995, January 24th, 2022
Nutrition, Hospitality & Human Services
Thank you for your assistance.
Customer 452919, April 13th, 2024
Thank you for following the guidelines of the discussion essay. We are off to a great start.
Customer 452919, March 20th, 2024
Thank you for your service as a team .
Customer 452919, December 1st, 2021
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat