The chairman of the New York Stock Exchange, Dick Grasso, offered his resignation with immediate effect last night after failing to withstand a storm of controversy sparked by revelations that he had received one-off pay package of $140m (£88m), a sum that many on Wall Street considered outrageously excessive.
The abrupt departure of Mr Grasso, 57, will send shock waves through the American finance industry. Critics have also been calling in recent weeks for sweeping reform of the exchange - the largest in the world - arguing that it had become a club of elite Wall Street mandarins controlled by Mr Grasso.
That Mr Grasso, who had been 36 years at the exchange, could so swiftly be ousted would have been unthinkable until recently. He was more used to being lauded for reopening the exchange within days of the September 11th attacks in lower Manhattan and overseeing a huge expansion in its business.
But jaws dropped when the exchange confirmed last month the scope of his pay deal, negotiated as part of an agreement to extend his contract for an additional two years to last until 2007. The extraordinary sum included deferred payments and money accumulated in a savings account with the exchange.
By yesterday the chorus demanding that Mr Grasso step down had become deafening. The voices came both from major pension funds across the US and from members of the exchange itself. Two Democrat candidates for the US presidency also added weight to the pressure on Mr Grasso, who had been chairman of the NYSE since 1995.
Sources said that Mr Grasso arrived at an emergency meeting of the NYSE board shortly after the close of the markets in New York last night, offering to resign if he was asked to. It then took a short time for the board members to concur that indeed he had no choice but to leave. It did not help Mr Grasso that the NYSE is meant to be a not-for-profit organisation, owned by its members. When asked recently about the scale of his remuneration, he replied: "I am blessed. Thank you."
"Instead of setting an example of ethical leadership for the market he oversees, Mr Grasso's behaviour has shaken the faith of investors and the foundation of the stock exchange," Senator Joseph Lieberman, a presidential candidate, said yesterday, shortly before Mr Grasso stepped down.
Earlier the New York state Comptroller Alan Hevesi, who heads the state's pension fund, and a group effort by California Treasurer Phil Angelides and the heads of both the California Public Employees' and the California State Teachers' Retirement System had also asked for the head of Mr Grasso.Reuse content