Ok it's at least clear that Gretchen Morgenson discusses “court filings” of experts on Richard Grasso’s pay at the NYSE.
Experts hired by the New York attorney general’s office contended in court filings that Mr. Grasso’s pay was inappropriate because it vastly exceeded that received by executives in five different comparative groups during the 1999-2002 period and because it was based on financial results that were inflated by an improper accounting technique. The experts for Mr. Grasso argued that his compensation, which jumped from $6 million in 1998 to $30.55 million three years later, was appropriate because it reflected common practice at public companies and was the result of thoughtful deliberations by an informed board. They contended that members of the exchange board had all the information they needed to approve the pay of Mr. Grasso.
Morgenson then concludes
Mr. Spitzer’s experts provided extensive data to justify their conclusions.
But
those testifying on behalf of the former exchange chief provided little documentation for their conclusions that his pay was appropriate. . . [Evelyn Brody] did not note that the details of Mr. Grasso’s pay were not disclosed to the exchange’s membership until shortly before his ouster.
And she gives the last word to one of Spitzer’s lawyers:
What we intend to prove is that an improperly constituted board and comp committee awarded Mr. Grasso compensation that was unreasonable and improper and the exchange then improperly accounted for those awards to hide their true cost.
As I discussed last March and November, and contrary to Morgenson's snide remark about Brody, the board did have detailed knowledge when it voted on the pay. It’s not clear what “details” Morgenson thinks were omitted.
Moreover, the question of how much is “reasonable” is an exceedingly difficult issue. That’s why we entrust these decisions to non-conflicted and informed boards – which is just what this board was, according to defense experts.
So, is this commentary, like the executive pay rants Morgenson does every Sunday, or is it news? Or is the Times' point that we're not supposed to get that straight?
I'll have much more to say about Morgenson, Grasso and Morgenson on Grasso, but can't now, because . . . .(see the next post)
Update: Morgenson seems to have changed her tune a bit on Grasso. On September 21, 2003 she criticized "the hypocrisy of the New York Stock Exchange directors giving Mr. Grasso his money and then booting him for taking it." After Spitzer decided not to charge the directors for "giving Mr. Grasso his money," Morgenson seems to be focusing on Spitzer's new theory -- that the money was too much and the board was misled (that is, unless you accept the fiction that Morgenson is simply reporting and not commenting). Well, at least now Morgenson and Spitzer now have their stories straight.
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