Daimler-Chrysler’s chairman and chief executive, Juergen E. Schrempp, is leaving the New York Stock Exchange’s board of directors following the salary furor involving Dick Grasso, a spokesman for the auto giant said Sunday.
SCHREMPP BECOMES the second director to leave the board, which has been under pressure to reform its governance practices since the disclosure of Grasso’s $187.5 million pay package sparked public condemnation.
On Thursday, lead director H. Carl McCall announced his resignation from the board. McCall, an NYSE board member since June 1999 and chairman of the compensation committee for the last three months, has said he was not aware of important details of Grasso’s compensation. Schrempp also was on the committee, and questioned the pay package.
Schrempp, the only non-American to serve on the exchange’s board, decided to resign after careful consideration, said the Daimler-Chrysler spokesman, declining to identify himself.
Schrempp hoped his move would allow for the board to redefine itself, as it seeks to replace Grasso, the spokesman said.
Schrempp’s second two-year term was to expire in June. His resignation was first reported Sunday by Germany’s weekly Welt am Sonntag newspaper.
The NYSE had no comment on Schrempp’s departure, spokesman Ray Pellecchia said.
Grasso’s pay was set in a contract approved in May 1999. Under an August contract revision, Grasso was paid a lump sum of $139.5 million in accumulated benefits and savings, and was owed an additional $48 million in vested funds over the next four years — which Grasso said he would forgo in the face of growing public resentment.
At an Aug. 7 NYSE board meeting, Schrempp noted that Grasso’s compensation had stirred negative public sentiment and inquired whether the exchange should get an outside opinion on its legality. He was told an independent consultant had determined that the revised deal would save the exchange more than $3.5 million.
When the board decided on Sept. 17 it was time for Grasso to step down, Schrempp was one of 13 members to vote for the move. Seven board members voted that Grasso should stay.
On Sept. 21, the exchange’s board named former Citigroup executive John S. Reed as its interim chairman and CEO. Even before McCall and Schrempp resigned, observers said a number of the board’s directors were likely to leave amid a leadership shuffle. Reed has already suggested the 27-seat board be pared down to about a dozen members.
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