Floor traders at the New York Stock Exchange (search) are putting together a petition calling for new management to replace Chairman Richard Grasso (search), who is under the gun for a $140 million payout.

James Rutledge, an NYSE member who has asked the U.S. Securities and Exchange Commission (search) to investigate Grasso's compensation, said he knew of the petition at the world's largest stock exchange.

"I am well aware of the petition," Rutledge said, but he declined to go into further detail.

Three of the NYSE's board members will get an opportunity to hear floor members' frustrations next week.

According to a source speaking on the condition of anonymity, NYSE board members Robert Fagenson, Christopher Quick and James Duryea will get an earful when they sit down with many floor members at what is being called an "unofficial meeting."

"The floor is in mutiny," the source said. "It's not going to quiet down by Thursday."

If the petitioners gather 100 signatures from 1,366 seat owners, they could hold a special meeting to talk about replacing Grasso.

Development of the petition comes as Rutledge and other exchange members begin to publicly voice their concerns over Grasso's pay and the board's approval of it.

"The recent facts coming to light about compensation policies put us in a position where we can't support pay levels at the exchange," said Michael LaBranche, chief executive officer of LaBranche & Co. Inc. (search), which runs the largest specialist operation on the NYSE floor.

In a letter earlier this month, Rutledge asked the SEC to "closely examine and explore" the exchange's announcement that it paid Grasso almost $140 million in accrued savings, benefits and incentives, and extended his contract for an additional two years, until 2007.

Rutledge, an NYSE member since 1973, marked the letter "confidential" and asked the SEC for discretion.

"If and when certain individuals within NYSE management become aware of a disclosure of 'internal criticism,' there are incidents of possible vindictive retribution against the suspected 'informants'," the letter said.

But in a memo informing his colleagues of the letter, Rutledge said the "current crisis that the exchange is faced with far outweighs the risk of hastening the demise to my otherwise mediocre career."

Meanwhile, LaBranche and the NYSE are locked in a public dispute regarding an exchange investigation into the trading practices of some of its specialists, who manage the buying and selling of shares on the exchange's floor.

LaBranche is appealing a censure and $150,000 fine it received for failing to turn over e-mails to the exchange's enforcement division that were requested as part of the investigation.

While LaBranche has since turned over the e-mails, it is appealing the decision on principle.

The NYSE declined to comment on Rutledge's comments or the floor traders' petition.

Since the NYSE divulged Grasso's compensation on Aug. 27, it has faced a public outcry and intense media scrutiny, with many saying the chairman receives far too much money for someone serving as a regulator.

Grasso has staunchly defended his compensation and pay package, and said Wednesday that he would not resign his post.