Governance Issues at the New York Stock

Exchange: Payback Time at NYSE

On September 18, 2003, Richard Grasso (Grasso), Chairman and CEO of NYSE resigned
amidst widespread criticism of his pay package and governance practices at NYSE. Earlier in
August 2003, NYSE announced that Grasso had been given a lumpsum amount of $140
million from NYSE (covering two decades of deferred compensation, and retirement
benefits). It also announced that Grasso's contract had been extended upto 2007 with an
annual pay of $1.4 million, and an additional $1million annual bonus.

William Donaldson (Donaldson), Chief of the Securities and Exchange Commission (SEC)3,
commented that Grasso's compensation details raised serious doubts about governance
standards at the NYSE.

Donaldson sent a letter to the compensation committee head - Carl McCall (McCall) asking
for more details about how Grasso's compensation package had been decided. The
misgovernance at NYSE came to light in August 2003 when the Council of Institutional
Investors (CII)4 published a report which highlighted the shortcomings in NYSE's
governance practices.

Source: - .ICMR India site