Believe it or not, Richard Grasso almost left the
New York Stock Exchange
with an even bigger headache than his eye-popping $139.5 million payday.
If not for the brutal bear market and the devastation wrought by the Sept. 11 terror attacks, the NYSE might be well on its way to building a humongous $1.6 billion new headquarters and trading facility in lower Manhattan.
Indeed, plans for the new building weren't formally shelved until a year ago, when Mayor Michael Bloomberg said New York City couldn't afford the $1 billion in subsidies former Mayor Rudolph Giuliani had promised. Those city subsidies came about only after Grasso and the NYSE threatened to abandon lower New York and cross the river into New Jersey.
But as bad as that deal might have been for the city, it would've been worse for the NYSE. The plan would have committed the Big Board to building a trading floor three times larger than the one at its beaux-arts landmark building at 11 Wall Street.
When the original plan was announced in 1998, many thought it was a boondoggle because of the way computerized trading systems were transforming Wall Street. If anything, critics said, the NYSE would probably only need a token trading floor in the future because much of the activity at the NYSE would be conducted via high-speed computers -- a scenario that looks increasingly likely in the current era of reform.
But Grasso was determined to push ahead with his outsized building. It's an indication of just how committed he was to maintaining the status quo at the NYSE, especially when it came to the exchange's face-to-face model for trading stocks.