Former New York Stock Exchange chairman Richard Grasso has won a partial victory in his legal fight to hold on to his $187.5 million compensation package.
The New York Appellate Division in Manhattan threw out four rulings against Grasso on Tuesday that had been made by a lower court last year.
The high court has not yet addressed other issues at the heart of the dispute. They include whether Grasso is entitled to a jury trial, and whether he can be ordered to pay back the disputed money without any trial, as the lower court judge ordered. Another issue is whether the lower court judge should recuse himself; Grasso contends, among other things, that the judge, Charles Ramos, had tried years ago to become an NYSE board member.
The four rulings Grasso won, dealing with technical issues, were reversed on the grounds that the state attorney general did not have the authority to bring them in the first place.
Grasso’s attorney, Gerson Zweifach, declined to comment.
The state is expected to appeal, said Darren Dopp, a spokesman for Gov. Eliot Spitzer, who originally pressed the case. The decision will be up to his successor, Attorney General Andrew Cuomo, whose spokesman said only that the office was reviewing the matter.
“This was just a technical issue related to some of the counts and was not the subject of the summary judgment we won” requiring Grasso to pay back more than $100 million in compensation, Spitzer said upstate after an unrelated event.
“That summary judgment motion is really the critical issue here,” Spitzer said.
But James J. Fishman, a Law Professor specializing in nonprofit organizations at Pace University Law School in New York, said it was a victory for the former chairman.
“The decision is saying that the attorney general stretched his authority when he went after Grasso,” Fishman said.
If nothing else, Grasso will have some leverage, he said.
“It gives both sides incentive to settle because this is Spitzer’s case and Cuomo, the new attorney general, will never get any points for it,” Fishman said.
There was no indication Tuesday when the court would rule on the other issues pending before it in the case.
The attorney general’s office sued Grasso under the state’s Not-for-Profit Corporation Law. The office asserted that Grasso had received unreasonable and unlawful pay that was not commensurate his services.
In January, an attorney fighting to retain Grasso’s compensation package told the higher court that a fully informed “blue chip” board of directors had approved the compensation and he should not be forced to give it back.
The state attorney general’s office has been trying to recover some of the $187.5 million pay package Grasso received in 2003. It contends that the compensation was unreasonable under state laws governing not-for-profit organizations.
Spitzer, elected governor in November, had argued Grasso wasn’t entitled to more than $18.3 million, only a portion of what he was paid, because he left the exchange early. Grasso left amid public criticism of his compensation. He has denied any wrongdoing.
Grasso joined the NYSE in 1968 as a clerk earning $81 a week and worked his way up to vice president in charge of listings then to chairman in 1995.