Green-Eyed Critics Cut Down Grasso

It's not the principle of the thing, it's the money.

Though Dick Grasso's critics may profess righteous indignation about conflicts of interest and weak corporate governance, it's really another crime for which they ultimately brought down the New York Stock Exchange chairman: achieving wealth.

Judging from the poison-pen letters that piled up on Grasso's desk before his Wednesday evening resignation, the NYSE chief might have been able to linger for years at his post -- a job he plausibly would do at the salary of an order clerk -- had he smoothed out his retirement payments or cut a few million from his salary.

Ostensibly, Grasso's salary raises troubling questions, as the parlance goes, about the conflict of interest inherent in his post. As NYSE chairman, he's both a regulator of the NYSE and a booster of the exchange. So one part of his job is ensuring fairness: making sure that neither investors nor listed companies get a raw deal when stocks are traded. The other part of his job is to ensure that exchange members make a good living from the trading of stocks -- a goal embodied by an NYSE compensation package based partly on the number of companies the NYSE could poach from the rival Nasdaq.

But what appears to be bubbling up is outrage that Grasso made this money when investors weren't -- outrage that isn't mollified by pointing out that, when everyone else appeared to be making incredible sums of money during the Great Bull Market, Grasso wasn't.

Grasso's pay package "sends the wrong signal at this critical time when public- and private-sector leaders must be steadfast in their commitment to restoring the credibility of our financial markets," a trio of California regulators wrote Tuesday.

As the anti-Grasso argument goes, once you get paid $139.5 million or more, you can't possibly be an effective regulator. As New York State comptroller Alan Hevesi put it in a statement Tuesday, "When an official is paid an extraordinary amount of money by those he is supposed to regulate, there is an obvious conflict of interest."

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