Spitzer has charged that Grasso’s pay deal was excessive under a state statute that governs nonprofits like the stock exchange. But, NEWSWEEK has learned, Grasso may argue that the exchange is hardly a charity like, say, United Way. Rather, he may note that there are many other examples of not-for-profits that operate more like businesses (with well-paid chiefs). One organization he’s considering citing is the Motion Picture Association of America, the film industry’s trade group, which is also incorporated in New York. By all accounts its former chairman, Jack Valenti, earned more than $1 million. The response was still in draft form last week and could change.
Grasso is also planning to file a lawsuit against the exchange for an alleged violation of a nondisparagement clause in his contract. He may also sue his replacement, John Reed, for defamation. If filed, the suit is expected to point to a series of critical statements Reed made about Grasso following his ouster last year, including an exchange press release that said its board had concluded that “serious damage has been inflicted on the exchange” because of the pay deal. A spokesman for Reed says, “We think there’s no actual or legal basis for this claim.” No charitable feelings at this not-for-profit.
