NEW YORK -- The New York Stock Exchange said yesterday it would not sue its former chief executive and chairman over his lavish pay package, but was cutting the salaries of top officials.
Current chief executive John Thain said the potential case against Richard Grasso is in the hands of the Securities and Exchange Commission and New York state regulators. Both offices had indicated they were looking into the issue of Grasso's pay.
"It is more advantageous for them to pursue this case than it is for us," Thain said at a news conference following an exchange board meeting. "We have no plans to bring an independent suit" although he did not rule out the possibility of later joining regulators.
Grasso was ousted from the exchange in September over a $187.5 million compensation package that outraged Wall Street and regulators, many of whom believed it was excessive. The resulting furor prompted the exchange to overhaul its corporate governance practices, including how it compensates executives.
In that context, Thain said yesterday that senior executives of the exchange would receive pay cuts from 10 to 20 percent, effective immediately. The cuts do not affect bonuses.
"We very much want to compensate our people for their good work. This does not reflect their performance in any way," he said.
Thain, who started at the NYSE last month, is being paid a $4 million annual salary, while interim chairman John Reed, who is expected to leave the exchange, is receiving a symbolic $1 salary.
Also yesterday, the NYSE appointed Amy Butte as chief financial officer, replacing Keith Helsby, who is retiring. Butte, who will be paid $500,000 excluding bonuses, most recently held the same job at Credit Suisse First Boston's financial-services division.