Jan. 17 (Bloomberg) -- Richard Grasso, the former chairman of the New York Stock Exchange, said costs from the lawsuit challenging his compensation at the Big Board may have exceeded $100 million -- almost as much as New York state is trying to claw back.

``If you took the entirety -- there were 60 witnesses deposed, my co-defendant, myself -- I would not be surprised if the legal bill were in excess of $100 million,'' Grasso said in an interview today. ``This lawsuit from my standpoint is about honor. It's not about money any more.''

The suit, filed in May 2004 by then-Attorney General Eliot Spitzer, seeks to recover more than half of the $190 million Grasso received during his eight years as NYSE chairman and chief executive officer. Spitzer, who became governor of New York earlier this month, argued that Grasso's pay was ``unreasonable'' and violated state laws governing not-for-profit organizations.

The case now sits at the New York appeals court, where Grasso is fighting a ruling that he breached his duty to the exchange by accepting the pay. Lawyers preparing for a trial have gathered more than a million pages of documents from the NYSE and taken testimony from 60 executives and former board members.

Grasso, 60, didn't limit his comments to his own compensation. The NYSE's current CEO, John Thain, should be paid more now that the exchange has become a for-profit company, Grasso said.

Praising Nardelli

He also praised ousted Home Depot Inc. CEO Robert Nardelli, whose $210 million exit package prompted the company to overhaul its approval process for executive pay and may result in congressional hearings. Grasso, who was a Home Depot director from 2002 to 2004, said Nardelli almost doubled profit at the world's largest home-improvement retailer during his six years as CEO.

Grasso said criticism of former Exxon Mobil Corp. CEO Lee Raymond was inevitable after he stepped down from the world's largest oil company with a $357 million retirement package.

``I have heard some people say Lee Raymond was in the sweet spot, that he was there when oil went from $9 a barrel to $65 a barrel, that he had nothing to do with that,'' Grasso said.

Grasso was less supportive of Henry McKinnell, who was forced out as Pfizer Inc.'s chief in December after the stock fell 40 percent during his five years at the helm. McKinnell left with almost $200 million in severance, pension assets and performance awards.

Expensive Suit

At more than $100 million, the suit against Grasso would be among the costliest recent legal proceedings faced by a chief executive. Former Enron Corp. CEO Jeffrey Skilling paid his defense lawyers $70 million over the five years he fought allegations of fraud, according to an Oct. 15 BusinessWeek report. Richard Scrushy, the former CEO of HealthSouth Corp., spent at least $21 million on his first criminal trial.

``The $100 million strikes me on the high side because the lawsuit hasn't gone to trial,'' said Peter Henning, a professor at Wayne State University's law school in Detroit specializing on white-collar crime. ``But the partners handling Grasso's case are probably billing $600 or $700 an hour, and the law firm will put a number of lawyers and support staff on a case, so the numbers can ratchet up pretty quickly.''

John Milgrim, a spokesman for the new attorney general of New York, Andrew Cuomo, didn't return a telephone call seeking comment.

The `Whole Story'

Grasso last week asked the appeals court to throw out an earlier order that he return as much as $112.2 million in pay to the NYSE. He also has challenged a decision by the same judge, Charles Ramos of the New York State Supreme Court, to hold a non- jury trial on certain aspects of Spitzer's case.

``What we're asking for is the right to go to trial, a trial by a jury of my peers, hopefully later this year,'' said Grasso, who was wearing a New York Fire Department pin on his lapel. ``Once the whole story is told, my reputation will be vindicated and my case will be overturned.''

Grasso said he may be willing to negotiate a settlement with Cuomo depending on how the appeals court rules. Talks with Spitzer in 2004 stalled in part because Grasso asked the exchange to release $48 million in pay that he had pledged to charity.

``It's got to be a settlement born of honor,'' Grasso said. ``But until there is a settlement of honor, I think it's important for me to continue this battle.''

Thain's Expansion

Grasso said that since leaving the exchange, he's helped Joseph Grano, the former chairman UBS Paine Webber Inc. and a member of President Bush's advisory council on homeland security, start a security company. Grasso joined the exchange as a clerk in 1968 and rose through the ranks until he was replaced William Donaldson as chairman and CEO in 1995.

He resigned in September 2003 during the controversy that erupted after his compensation became public. Since then, Thain has converted the stock exchange into a for-profit, publicly traded company and set the Big Board on a path of global expansion that so far includes the $14.8 billion takeover of Paris-based Euronext NV and an investment in India.

Grasso said Thain ``absolutely'' should get paid more than the roughly $6 million he received in 2006.

``He's done a brilliant job,'' Grasso said. ``The exchange is no longer the institution I ran. It's a for-profit, global enterprise today. John's contribution to the creation of wealth in that institution has been enormous.''

To contact the reporters on this story: Allan Dodds Frank in New York at allanfrank@bloomberg.net; Edgar Ortega in New York at ebarrales@bloomberg.net.

Last Updated: January 17, 2007 18:15 EST