The New York Stock Exchange, already under intense criticism for its compensation practices, disclosed yesterday that its top six executives are eligible for more than $73 million in combined payments upon retirement.
Adding in another 17 people at the rank of senior vice president and above, the total reaches an estimated $128 million - equal to one-seventh of the equity in the exchange held by about 1,400 members.
The NYSE was rocked by disclosures this summer that then-Chairman and Chief Executive Officer Richard A. Grasso had accumulated $187.5 million in such payments, although he agreed to relinquish $48 million before he resigned last month.
Governance experts promptly criticized the size of the executives' pay packages, with Sean Harrigan, president of the influential California Public Employees' Retirement System, calling on interim NYSE Chairman and CEO John S. Reed to renegotiate the executives' deals.
But reaction from NYSE members was mixed.
Some were relatively unfazed, because Reed had warned them the compensation was sizable in an attempt to pre-empt the kind of furor that greeted revelations about Grasso's pay.
Others were amazed.
"'I'm pleased that the numbers were disclosed, but I find them shockingly high," said NYSE member and retired trader John Jakobson. "As yet there is no evidence that they deserved this."
Reed, who disclosed the pay packages in a bulletin to members yesterday, promised that change was coming. "For calendar year 2004 and beyond, we will clearly modify some features of our plans as well as their administration," his memo read.
In the wake of the Grasso affair, the NYSE has been under pressure to quickly disclose the top officials' pay.
The exchange estimated that Robert G. Britz and Catherine R. Kinney - its co-presidents and chief operating officers - each will be entitled to more than $22 million in lump-sum payments upon retirement, accumulated over their roughly three decades at the NYSE.
Each of them averaged about $2.6 million in salary, bonus and long-term compensation over the past five years, although they assumed their current positions only in January 2002.
And, each received more than $3.75 million in their new posts last year.
Kinney was paid slightly less than Britz in each of the past five years.
Overall, the top six executives' pay averaged more than $1 million in the past five years.
William R. Johnston, a former president of the exchange under Grasso and a current adviser to the chairman, made $5.8 million in salary and bonus in 2001, $5 million in 2000 and $7.4 million in 1999.
Last year, in his half-time role as adviser, he was paid $1 million. He is due to receive up to $500,000 this year working halftime, the report said.
Edward A. Kwalwasser, the top regulatory official at the exchange, received salary and bonus packages of $1.5 million in 2001 and $1.3 million in 2002, putting him at a compensation level far above that of other regulators in the industry.
William H. Donaldson, the chairman of the Securities and Exchange Commission and the nation's top regulator, is paid a yearly salary of $142,500, which does not include a bonus.
Reed's memo, however, sought to deflect rumors about even grander pay throughout the executive ranks.
"There are [fewer] than 12 people earning more than $1 million per year," the memo said.
Saying "these numbers reflect the same process and programs that underlie Mr. Grasso's compensation," Reed's memo said Grasso annually made pay recommendations for the officials to the board of directors' compensation committee, which approved the amounts.
"These numbers are 'as they are,'" Reed wrote. "For our management team, the recommendations for compensation were made by Mr. Grasso to the compensation committee of the board, approved by it and then by the full board."
The Chicago Tribune is a Tribune Publishing newspaper. Wire services and The New York Times contributed to this article.