June 22, 2005
Grasso's Salary at the NYSE
Folks are not asking the right question when it comes to Grasso's over the top salary package at the NYSE. No one can defend the amount paid to Grasso; the only issue for the press and for the prosecution is who was responsible for approving the salary. Did Grasso steal the money or was the salary approved by the Board. The more significant issue for the public is how the NYSE could pay such an outrageous salary at all. This is a non-for-profit New York Corporation paying out a huge percentage of its operating budget on an excessive salary. Under competitive conditions the exchange could not get away with it, as competitors that run more efficiently could find ways of making the NYSE suffer for its poor management. The lack of exchange to exchange comptition creates this kind of slush money to be distributed by those exchanges with monopolistic pricing power. It is the monopolistic pricing power of the NYSE that creates the spoils that enable participants to divide obscene amounts of money. Either the government must regulate salary or the government must facilitate more exchange to exchange competition, for otherwise this problem of theft by salary will reappear.
June 22, 2005 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Grasso's Salary at the NYSE: