What I find most irritating about New York Stock Exchange Chairman Richard A. Grasso's reward package is that it disregards the work done by all the people behind the scenes ("The $140,000,000 man," Cover Story, Sept. 15). They didn't share in the loot, although they shouldered the burden. If he's so deserving, perhaps they should all call in sick one day to let him run the place by himself. Why does Grasso deserve a $5 million bonus for September 11? Many people have to work miracles on a daily basis because "that's what they get paid for." Unfortunately, overpaid CEOs aren't held to the same standard.
Mr. Grasso and his board just didn't exhibit the judgment you'd expect from otherwise astute businesspeople. Pick a number. Grasso should have earned maybe some reasonable multiple of tens of millions. Greed showed a compensation payoff attempt that is despicable, and borders on immoral at a time when regulatory governance, and the NYSE corporate governance, should be at its peak. What is also sad is that Grasso, and indirectly, the Board, were willing to push this through at all costs. Grasso resigns in disgrace after 36 years. Let's not feel sorry for him, though. I'm sure he'll spend it wisely, with his buddies from the NYSE Board.
Liberal railings against "tax cuts for the wealthy" usually leave me feeling quite dyspeptic. However, after reading about Grasso's compensation plan, I have to concede that they may have a point. Perhaps Congress should consider a tax rate for unearned income.
John G. Cronin
White Plains, N.Y.
The $140 million man has resigned, but his board still seems to be in a fog as to how he came by that tidy sum. Here is a scenario that puts the figure in perspective: Assume that at the end of his first year of employment at the NYSE, Grasso received a sum X into his retirement account. This deposit started accruing interest at a rate of 8% per year. After the second year, he received another deposit, which was 8% more than the one the year before. This deposit also earned interest at 8%. And so forth, every year thereafter. For all of these deposits to be worth $140 million today, after 35 years of employment, the initial deposit X would have had to be $292,184, which it obviously wasn't. Two important conclusions can be drawn: The later deposits Grasso received no doubt by far exceeded his regular compensation. And second, do not underestimate the power of compounding interest, even at just 8% per year.
Clifton Park, N.Y.
Americans believe it is their birthright to earn any amount of money, even if it is more than they can spend intelligently in their lifetime. This game of excessive pay reminds me of college drinking contests, in which whoever drinks the most without passing out is admired.
Mountain View, Calif.
What a fine role model for the financial-services industry.
Citrus Heights, Calif.
Time for Eliot Spitzer to take another look at the NYSE.
Wilkes-Barre, Pa. "Still getting stronger" (News: Analysis & Commentary, Sept. 15) predicts long-term productivity growth, based on the increasingly effective use of information technology and tighter management of labor. You ignore an important element of productivity: the increasing skill and experience of aging baby boomers. Baby boomers are entering their most productive age range, and they currently make up a disproportionately large segment of the population. In addition, according to the Bureau of Labor Statistics, they are the only age group with an increasing labor-force participation rate during the current recession.
Ignoring the baby boomers' effect on productivity could be serious, because it is short-lived, not long-term. In 2010, baby boomers will start retiring in droves -- just when we will need higher productivity to help support them in retirement.
Edward A. Bryant
New York I am very uncomfortable with reading elsewhere that military members in the special forces operate commonly out of uniform, as during the early days of the Afghanistan operation ("Outsourcing war," Special Report, Sept. 15). Now, private military companies (PMCs) perform largely, but not exclusively, in-theater support missions. Field support is, of course, a military function, as is training and security. Clearly, that makes PMCs a legitimate military target. Also, when the U.S. foots the operational bill for some coalition forces, does that make those coalition forces mercenaries in some eyes?
White Pine, Mich.
As for Billy J. Gray's military pension, your article indicated that a veteran with 20 years' service would receive 50% of his old salary. Use of precise terminology and full insight into the military compensation structure yields a very different and more accurate accounting. Mr. Gray's pension is 50% of his base pay, excluding any and all allowances (such as those for quarters and subsistence). In my case (Navy Commander, O-5, with 22 years active service), my pension amounts to about one-third of my total active duty compensation. For members with specialty pay for flying, hazardous duty, etc., the pension at 20 years can easily amount to less than one fourth of their salary, which is half the amount your article would lead the reader to believe.
James H. Martin
Alexandria, Va. The column "Putting e-limits on your kids" (Technology & You, Sept. 15) is both timely and informative. Readers should know that President Bush signed into law my legislation to create a child's section on the Internet, where kids can go to gain the benefits of the Internet in a safe environment. I invite your readers to learn more by visiting Smithsonian.kids.us, the first of many kids.us sites to come.
John M. Shimkus (R-Ill.)
House of Representatives
Washington "How to get U.S. broadband up to speed" (Information Technology, Sept. 8) says the U.S. is lagging behind in the deployment of broadband services because the poor, unfortunate Bell operating companies are saddled with regulations that are not imposed on the cable industry. Roger O. Crockett has bought the propaganda that the Bells have been feeding regulators across the country (by the way...most aren't buying). This is a common tactic of the Bells -- running to regulators when they are getting beaten in the marketplace. The Bells have been unwilling to make the capital investments required to upgrade their antiquated legacy networks. Cable has invested billions in upgrading their networks and has reaped the rewards in doing so, capturing the lion's share of the broadband residential market. Cable made the investment with no guarantee of profits from regulators and entirely with private risk capital.