Furious Grasso to counter-sue over $189m pay claims

An enraged Richard Grasso, the former chairman and chief executive of the New York Stock Exchange, yesterday said he would counter-sue his former employer for due compensation and damages, insisting that his "vindication would come in a courtroom".

An enraged Richard Grasso, the former chairman and chief executive of the New York Stock Exchange, yesterday said he would counter-sue his former employer for due compensation and damages, insisting that his "vindication would come in a courtroom".

Writing in the US edition of The Wall Street Journal, Mr Grasso delivered an angry response to news on Monday that the New York Attorney General, Eliot Spitzer, had filed a legal case against him over his controversial $188.5m (£104m) 2002-03 remuneration package.

In the article, Mr Grasso vehemently denied Mr Spitzer's allegations that the NYSE board had been misled when deciding on his pay, arguing that he had not been involved with the remuneration committee's decision-making process. Mr Grasso also accused his temporary successor, John Reed, of orchestrating leaks, which stirred up a media backlash against him.

The dispute over Mr Grasso's pay eventually led to his dismissal from the company last September.

"I have instructed my lawyers to file a counterclaim for the compensation that is still owed to me, as well as to seek appropriate damages for the leaks orchestrated by Mr Reed," he wrote.

"Those who thought they could break me with their repeated media leaks badly underestimated my character and resolve. I look forward to addressing them in court where they can no longer hide behind Mr Spitzer's cloak."

Mr Spitzer claims directors at the NYSE, who approved Mr Grasso's pay, were misled about the scale of other executive pay packages around the world, and that Mr Grasso was allowed to set his own performance benchmarks "which he easily exceeded".

So far, Mr Grasso, who worked for the NYSE for 35 years, starting on a wage of $81 a week, has received around $140m of his total 2003 package, of which Mr Spitzer aims to reclaim some $100m.

Mr Grasso said the decision not to pursue Carl McCall, chairman of the remuneration committee, which approved his pay, proved that Mr Spitzer's lawsuit was politically motivated. Mr McCall was the unsuccessful Democratic candidate for New York governor in 2002, a post which Mr Spitzer has publicly acknowledged he is considering standing for in 2006.

"New York Attorney General Eliot Spitzer's decision to intervene in a commercial dispute between the NYSE and me over my compensation and retirement benefits smacks of politics," he wrote.

"Mr Spitzer's decision to sue me and not Mr McCall ... or the powerful CEOs who voted for my compensation year after year, makes clear that Mr Spitzer is running for governor, and running hard. And he badly needs the support of Mr McCall, and the others who made the decisions now under attack."

Former directors of the NYSE, who voted on Mr Grasso's remuneration on several occasions, include Morgan Stanley's CEO Phillip Purcell and the CEO of Goldman Sachs Group, Henry Paulson.