Case Study of NYSE

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Case analysis I: Level of Executive Pay Case Study The case involves the New York State Stock Exchange (NYSE) that may have been overpaying one of its members and hiding details of its pay from its stockholders and the public. The NYSE, a non-profit organization, is jointly owned by more than 1,300 members and directed by a board of corporate officers and directors. It is governed by regulations of the Securities and Exchange Commission (SEC). On March 2004, the organization came under attack since it was revealed that a series of questionable events surrounded the payment of former NYSE chairman Richard (Dick) Grasso. As many as 45 former directors and former employees were subpoenaed over possible violations of NYSE regulations or other regulations that dealt with accountability of an organization. Controversy over Grasso's pay had started the previous year when revelations regarding the hugeness of his pay sparked media and public outrage. Grasso's annual pay was disclosed to include $1.4 million in salary plus a nonguaranteed bonus of approximately $1 million. Nonsalary compensation for the preceding four years had ranged from $9.9 million to $24.2 million per year (McCall, 2003). This was exclusive of his other benefits, plans, and awards There were arguments both and against Grasso's high pay. The arguments that supported his high pay included the fact that performance during Grasso's time tripled due to his effective management capacities. Grasso was also a
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