State Supreme Court Justice Charles Ramos said Grasso failed to ensure that the NYSE board understood the “magnitude” of his ballooning pay, particularly the more than $100 million in retirement benefits that he quietly accrued in his last few years on the job.
The case was brought by New York Atty. Gen. Eliot Spitzer, who alleged that Grasso stocked the board with cronies, then misled them about how much he was earning. In a May 2004 lawsuit, Spitzer claimed that Grasso breached his fiduciary duties under a state law regulating nonprofit organizations, which the NYSE was at the time.
Grasso has contended that the NYSE board and its compensation committee were made up of top Wall Street executives who were informed of his pay and approved it.
But Ramos rejected those arguments in sharp language, at one point labeling as “shocking” Grasso’s contention that he himself didn’t realize how much he was earning.
“That a fiduciary of any institution, profit or not-for-profit, could honestly admit that he was unaware of a liability of over $100 million … is a clear violation,” Ramos wrote.