NYSE Chairman Grasso Says He Won't Step Down

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New York Stock Exchange (search) Chairman Richard Grasso (search) said Wednesday he would not resign his post as head of the world's biggest bourse after facing more criticism of his $140-million pay packet.

"Would I voluntarily, after having just committed four more years of my life to the institution, step down? The answer is clearly not," Grasso told reporters after participating in a panel discussion convened here by the Business Roundtable (search), a lobbying group for corporate chief executives.

A day earlier, Grasso had defended his pay package at a press conference in New York, and announced that he would forgo $48 million in future pay and benefits. But this concession did not stop controversy from following him to Washington.

Grasso was asked during the panel discussion if chief executives, in general, ever feel that the compensation committees of their boards are offering them too much money.

"I've taken great pride in the fact that I've never had a two-way dialogue on the subject of compensation," Grasso replied, adding that he views it as important for directors on compensation committees to exercise independence.

Nell Minow, an investor activist, took on the NYSE chairman during the discussion, dominated by debate over U.S. CEO pay.

"The way we pay CEOs is completely crazy," Minow said. "It's not related to performance. It does not promote performance and it is not a genuine negotiation.

"I'm sorry Mr. Grasso, I think you should be sitting down with your compensation committee, you should be in negotiations. That's what corporate governance is."

The event's keynote speaker, U.S. Securities and Exchange Commission (search) Chairman William Donaldson (search), declined to comment on the NYSE's response Tuesday to a letter he sent earlier this month demanding details on Grasso's pay.

Donaldson said after his speech that he had spoken earlier with Grasso, whom he has known for several years. Asked if there was any personal tension between himself and Grasso, the SEC chief said, "Absolutely not."

Donaldson himself was chairman of the New York Stock Exchange in the early 1990s and was Grasso's boss.

Grasso acknowledged that he had chatted with Donaldson, but declined to give details about the exchange's response to Donaldson's demand for information.

The furor over Grasso's pay has fueled new criticism of the NYSE's structure as both a private business and a regulator. The exchange launched an internal examination in response to an SEC request.

Grasso said he believes the Big Board's structure is viable, but he added, "I would tell you that in the process of this governance review committee that is underway ... they're looking at every aspect of the institution."