From the recent fiery debate in the New York Stock Exchange over
the remunerations of its Chairman and Chief Executive, the question
as to what separate "Reasonable Remuneration" from "Greed" makes it
relevant to our Singapore experience too.
The Chairman and Chief Executive of the NYSE had probably assumed
that he had provided the environment to allow everyone listed on
the Board to make more millions than himself, and in so doing
should also be remunerated in similar quantum.
Likewise, our own Political Leaders had felt that the Ruling Party
had provided the right political economic environment to allow the
many MNCs to operate in Singapore and whose CEOs are paid
handsomely, why should our Singaporean Political Leaders be paid
lesser than the CEO's of foreign and local Corporations ?
Singapore's politicians are the highest paid in the World, and is
done so on the flimsy excuse that Leaders in Government should be
paid handsomely so that they will be fall into corrupt
temptations.
The wages of Leaders in either the Political and Economic sectors
should reflect the Standard and Cost of Living of the country, and
should be commensurate with the wages of the population.
The average worker at the bottom of Singapore's society earns an
average of $500 to $800 per month, the Middle Income Wage Group is
averaging between $1200 to $3000 per month (topping at $5000), and
the Upper Income starts from $5,000 to $25,000 per month; while the
Super Income starts at $30,000 per month.
If US Corporate leaders are paid salaries averaging $200,000
annually, (without bonus considered) - it explains the wage paid to
the US President to be the same - while the average US Citizen in
the Middle Income Group averages $60,000 annually
Venerable Grasso now a symbol of
greed
NYSE chief quits after furore over $246m pay
package
NEW YORK - They were just a few lines among hundreds of pages of
documents, but they were enough to cost the head of the world's
largest stock exchange his job.
Mr Dick Grasso, chairman and chief executive of the New York Stock
Exchange (NYSE), was ousted at an emergency meeting of the bourse's
board on Wednesday - ending a 36-year career that unravelled in
less than a month after a huge US$140 million (S$246 million)
one-off payout was disclosed.
Once described as 'the hero of Wall Street' for his efforts at
promoting the NYSE, Mr Grasso now finds himself branded a symbol of
Gordon Gekko-like greed. The infamous character in the 1980s hit
movie Wall Street believed 'greed is good'.
Mr Grasso's huge payout was made up of combined retirement benefits
- and was on top of his annual salary and bonus.
The lump sum, quietly amassing for years and earning annual
interest of a guaranteed 8 per cent, had been kept a secret, along
with his basic salary and bonus.
But in the wake of corporate accounting scandals such as Enron's,
the NYSE faced growing criticism that it was failing to meet the
standards it demanded from listed companies.
On Aug 27, it caved in and gave the media limited access to
hundreds of pages of documents that it had submitted to the
Securities and Exchange Commission (SEC).
Mr Grasso's secret stash was finally made public.
Even his most ardent supporters were aghast - the earnings were
more in line with the chief of a large profitable company, than a
Wall Street regulator.
Even his basic salary and bonus averaged a hefty US$10.9 million a
year.
Wall Street's elite, who have prospered under Mr Grasso's
stewardship over the years, found themselves on the same side as
outraged investors and regulators.
So on Wednesday night when he offered to submit his resignation to
the NYSE board if they requested it - they did.
Mr Grasso, 57, a college drop-out who started out as a clerk at the
exchange and worked his way up, said later in a statement that he
submitted his resignation 'with the deepest reluctance' and that
this was 'in the best interests of both the exchange and
myself'.
Institutional investors cheered the move yesterday.
'Mr Grasso's resignation was a necessary step to restore confidence
in the exchange,' said California Controller Steve Westly, who sits
on boards of California's state pension funds.
Ironically, his resignation came two years to the day after his
greatest triumph, when he reopened the NYSE after the Sept 11
attacks.
But even that career pinnacle has been tarnished by the surprise
disclosure that he had received a US$5 million bonus for his
performance that day.
Mr Grasso's resignation is expected to trigger corporate governance
reforms within the exchange. One focus has been the process by
which various NYSE compensation committees approved their chief's
pay.
'It's a very sad time for the NYSE,' said long-time NYSE member
Francis Maglio. 'He wasn't in this alone. Other people have to
share responsibility for the demise of a man who spent his entire
life at the NYSE and loved it.'
Meanwhile, attempts to find a swift replacement for Mr Grasso
foundered when California lawyer Larry Sonsini turned down the job
of interim chairman. -- Bloomberg, Los Angeles Times, Reuters
http://straitstimes.asia1.com.sg/topstories/story/0,4386,210497-1064008740,00.html?