July 2, 2008
NY AG Drops Final Claims Against Grasso for Excess Executive Compensation
We previously blogged that Richard Grasso, the former chairman and chief executive of the then not-for-profit New York Stock Exchange, had convinced New York's highest court to affirm the dismissal of four of the six counts brought against him by the New York Attorney General relating to Grasso's allegedly excessive compensation. The Associated Press and the New York Times now report that the Attorney General has decided to drop the case after another New York court threw out the remaining two counts.
According to the New York Appellate Division's opinion, the authority of the Attorney General to bring the last two statutory counts lapsed when the NYSE merged with a for-profit company, as the sole relief sought for any excessive compensation was repayment of the excess, which in this case would be paid to a now for-profit entity and so inure to its private owners. While not completely clear from the opinion, it appears that court may also have dismissed the only other remaining claim against Mr. Grasso, relating to whether he breached his fiduciary duty to keep the board informed about his pay, especially since the AP article indicates that the AG's office believes the case against Mr. Grasso is at an end. The full opinion can be found by going to the Appellate Division's appeals and motion calendar for July 2008, clicking on the "Appeals" link for July 1, 2008, and then scrolling to the 22nd page of the resulting PDF file, where the opinion begins.
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