Thursday, November 23, 2006

Marketplace: Was Grasso worth it?

Marketplace: Was Grasso worth it?:
"Dick Grasso's critics have long said he was paid too much, particularly for heading what was at the time a nonprofit institution. And that the compensation process was flawed. But the Wall Street Journal reports today that he just didn't do a very good job, at least according to a report commissioned by New York Attorney General Eliot Spitzer.

A University of Utah finance professor concluded that during Grasso's highest-paid years new listings on the Exchange declined. So did its market share. Its overall trading volume soared, but so did that of every other stock exchange. The report says Grasso was just riding the wave, says Charles Jones who teaches finance at Columbia University."
While it is true that the market share and new listings were down, his performance is not as clear cut. For instance to say Grasso did a poor job is a little like saying that network television executives have done a poor job since the ratings have dropped in the age of cable and internet (which may or may not be true). What we don't know is whether the decline would have been worse under alternative management/strategies.

No comments: