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ARTICLE · 15 JUNE 2004

Spitzer V. Grasso: Compensation-Related Governance Issues For Not-For-Profits

McDermott Will & Emery
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The complaint filed on May 24, 2004, by the New York attorney general against the New York Stock Exchange (a New York not-for-profit corporation), its former CEO and the former chair of its Compensation Committee, has important corporate governance, executive compensation and tax law implications for not-for-profit corporations nationwide.

United StatesTax
Ralph DeJong
Ralph DeJong
Monte Dube
Monte Dube
Andrew Liazos
Andrew Liazos
Michael Peregrine
Michael Peregrine
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The complaint filed on May 24, 2004, by the New York attorney general against the New York Stock Exchange (a New York not-for-profit corporation), its former CEO and the former chair of its Compensation Committee, has important corporate governance, executive compensation and tax law implications for not-for-profit corporations nationwide.

Essentially an action to rescind compensation payments made to the former CEO, the complaint raises important issues with respect to the exercise by a not-for-profit board of its fiduciary duties-particularly the process by which the board makes critical decisions in areas such as executive compensation. Furthermore, the scope of the complaint, the nature of the requested relief and the settlements (reached immediately prior to filing) with a former NYSE executive and the compensation consultant to the NYSE underscore the authority and leverage attorneys general may bring to bear over not-for-profit corporations.

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