VideoLate Friday, at the start of the holiday weekend, the New York Stock Exchange disclosed compensation figures for its 23-member senior-management team.
Less than a month after details about Richard Grasso's $188 million compensation package led to his resignation as the NYSE's chairman and CEO, the exchange reported that co-presidents Catherine Kinney and Robert Britz each took home about $2.7 million in salary and bonuses in 2002. Each also stands to receive at least $22 million upon retirement, according to Reuters.
The NYSE added that compensation arrangements for the entire 23-member senior management team, which were approved by Grasso and the boards compensation committee, could exceed $125 million, reported Reuters.
The exchange revealed the salaries of its top six executives. In addition to Kinney and Britz, they are:
- William Johnston, a senior adviser, who earned more than $1.25 million in 2002 and is entitled to a $6.8 million retirement payout.
- Edward Kwalwasser, an executive vice president, who earned $1.38 million and is entitled to a $7.7 million payout.
- Richard Bernard, an executive vice president, who earned $1.5 million and is entitled to a $4.8 million payout.
- Richard Edgar, an executive vice president, who earned $1.11 million and is entitled to a $9.2 million payout.
James Rutledge, an NYSE member since 1973, said the Britz and Kinney figures were "pretty much within the parameters of what we expected," according to Reuters, but the other four senior executives "caught me by surprise."
Critics pounced on the news. "It's clear that the exchange has benchmarked itself against the financial industry in general, because these levels of pay are what you expect to find perhaps at the largest financial corporations," said Espen Eckbo, founding director of the Center for Corporate Governance at Dartmouth College, according to Reuters.
Interim NYSE chairman John Reed announced plans to modify some features of pension and capital plans for individuals, beginning in 2004. Without providing further details, Reed added that executive pay must reflect the need to "have the very best management."
Neither Britz, a 30-year veteran of the exchange, nor Kinney, a 28-year veteran, was available for comment, reported Reuters.
Quattrone Concedes Role in IPO Allocation
Frank Quattrone, the former star banker at Credit Suisse First Boston, admitted on Friday that he played a role in allocating shares of initial public offerings to the investment bank's clients.
Quattrone, who has been charged with obstruction of justice and witness tampering, conceded under cross-examination by Assistant U.S. Attorney Steven Peikin that "it is possible I looked at partial lists of allocations before final decisions were made," according to Reuters.
"I might have taken part in some discussions," Quattrone also reportedly noted in testimony. "I did not make any decisions."
Still, the comments dealt a blow to the defense argument that Quattrone had nothing to do with how initial public offerings were allocated at CSFB. Quattrone attested earlier in his trial that neither he nor his employees had records on the allocation process.
Peikin, however, used a series of E-mail and other internal documents from CSFB to show jurors that Quattrone was closely involved in the allocation of hot stock offerings, Reuters reported. In one E-mail exchange between Quattrone and Dell Inc. CEO Michael Dell, Quattrone told Dell that he knew the executive was "personally interested" in one hot stock offering and said that he could allocate some shares if needed.
In another E-mail, according to Reuters, Quattrone told a fellow CSFB executive that he would like to meet "and discuss IPO allocations past and future."
The trial is focused particularly on a December 2000 E-mail message that Quattrone sent to subordinates, backing a top deputy's instruction for them to "clean up" their files. Prosecutors allege this message was sent to block investigations into CSFB's IPO practices by the Securities and Exchange Commission and a federal grand jury in late 2000.
Quattrone testified earlier in the day under direct examination, according to Reuters, that he never intended to obstruct justice in late 2000 when he forwarded the "clean up" memo. "In my mind, there was no relevance whatsoever about what was in the investment banking files and what the investigation was about," he said.
Many Unprepared for Sarbox Deadlines
More than a year after the passage of Sarbanes-Oxley, many companies are not nearly as prepared as they should be to implement many provisions of the landmark act.
"Companies are running out of time to refine their financial operations to meet accelerated filing deadlines with the Securities and Exchange Commission," notes Parson Consulting, a financial management consultancy.
In 2004, annual reports must be filed with the SEC within 75 days of fiscal year-end, 15 days sooner than the current deadline. Quarterly reports must be filed within 40 days of the quarter's end, 5 days sooner than the current deadline. Eventually the deadlines will further contract, to 60 days for annual reports and 35 days for quarterly filings.
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