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Grasso owes $112.2M to NYSE, Spitzer tells judge

By ASSOCIATED PRESS
Published November 3, 2006

ALBANY, N.Y. - New York Attorney General Eliot Spitzer wants former New York Stock Exchange chief Richard Grasso to return nearly $112.2-million from his disputed $187.5-million compensation package for 2003, according to court papers.

Earlier this month, state Supreme Court Justice Charles Ramos ordered Grasso to repay part of the pay and directed Spitzer to calculate the amount.

The judge, who was expected to get Spitzer's recommendation Thursday, will soon rule on it.

Spitzer's total includes $81.5-million in pension payments made to Grasso in September 2003 and $12.3-million in interest on two loans provided to Grasso.

There was no immediate comment from Grasso's attorney, Gerson A. Zweifach of Washington, D.C.

The judge said in his Oct. 18 ruling for partial summary judgment that he was "shocked" at one aspect of Grasso's defense: That he believed stock exchange officials were fully aware of all the elements of his compensation as they increased it annually.

In trying to recover some of the pay package, Spitzer said the compensation was unreasonable under laws governing nonprofit organizations and that board members were misled into approving greater compensation. An internal NYSE review known as the Webb Report claimed up to $156.7-million of the package was excessive when compared to most U.S. corporations.

Grasso has long argued the exchange's officers were aware of the compensation when it was approved.

The 72-page decision by Ramos said Grasso didn't fully disclose his growing compensation from a Supplemental Executive Retirement Plan. A SERP is an extra retirement fund many companies maintain for their executives.

The decision stated Grasso's SERP of $36-million in 1999 grew to more than $100-million in less than three years.

Spitzer, who is running for governor in New York, said any return of Grasso's compensation will be used to help educate investors.

[Last modified November 3, 2006, 01:38:18]