NEW YORK - The New York Stock Exchange said Thursday that it will not sue its former CEO and chairman over his lavish pay package, but is cutting the salaries of its 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 previously 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 after 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.
Recognizing the intense scrutiny of Grasso's pay package, Thain announced Thursday that the salaries of senior executives of the exchange would be cut by 10 to 20 percent, effective immediately. The cuts do not affect bonuses.
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 Thursday, 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.
Addressing another concern of many brokerages and listed companies, Thain announced a new plan to increase the amount of electronic trading at the NYSE by revamping its Direct Plus automated order system.
The exchange's board of directors unanimously voted to remove two roadblocks within the Direct Plus system - a 30-second delay in executing transactions and a 1,099-share order limit.
Now, buy and sell orders that match up will be executed instantaneously, regardless of size.
While only three weeks into his job as the exchange's leader, Thain said the electronic trading plans were a long time coming.
"Our customers want the ability to trade quickly and with a high degree of certainty, and we're going to give them the ability to do that," Thain said.
The technology proposals must be approved by the SEC, Thain said, but could then be implemented within two months.
