NYSE Big payout was bid to compete

Consultants told the NYSE that top officials were underpaid.
NEW YORK (AP) -- New York Stock Exchange chairman Dick Grasso's $139.5 million in accrued benefits and deferred compensation was the result of a concerted effort to raise the pay of all the Big Board's top managers to compete with soaring corporate salaries, according to exchange documents.
While critics scolded public companies for letting executive pay skyrocket, the NYSE quietly sought advice from consultants on how to emulate the top payers.
A nearly foot-high stack of committee minutes, internal memos and expert reports detail the effort, which ultimately resulted in the colossal payout announced two weeks ago, along with Grasso's contract extension. The NYSE allowed reporters to examine the documents Wednesday. The documents show how the exchange sought to get around its chief problem: As a private, not-for-profit institution, the NYSE could not use more traditional vehicles such as stock options to reward and retain executives.
Consultants repeatedly told the NYSE board that its top officials were underpaid compared with executives at large financial services companies, which they used as a benchmark.
What's in minutes
Minutes from compensation committee meetings show members approved increasingly larger awards for Grasso, often conveying hopes that it would help keep him from leaving.
The result was a series of swelling bonuses and contributions to Grasso's retirement and other tax-deferred accounts. Grasso, 57, who has spent nearly his entire professional career with the exchange, earned $2.2 million in 1995, the year he became chairman and CEO. His total compensation soared to $25.5 million in 2001.
In contrast, an internal memo showed his predecessor, William Donaldson, earned a total of $1.65 million in 1992.