Market briefing---Bob (fast)
The Chairman to quell the controversy over compensation---Su (fast)
NYSE---Deb (fast)
the day to 9,420. the s&p 500 was off by a larger percentage, down 1.2% down 12 points to 1,010. nasdaq down 2.6% or almost 50 points to 1,823. checking most actives, the nyse it’s alltel com names, nortel, lucent and nokia, down 13, 15, and 59 cents respectively. enron’s former treasurier ben gleason pleaded guilty to charges of security fraud sentenced to five years in prison. the fifth and highest ranking former enron employee to admit wrongdoing. in exchange for the guilty plea police force dropped other charges that may have led to a longer sentence. prosecutors said gleason is not aiding their investigation into the collapse of enron. now to the latest on continuing efforts by the new york stock exchange and its chairman to quell the controversy over compensation. su keenan has details on that story, su.
>> bob, new york stock exchange chairman richard grasso was paid bonus upon bonus upon bonus. s.e.c. filings show the $140 million pay package he received this month included three bonus plans that pushed his compensation 10 times higher over an eight year period. we now know grasso’s annual compensation reached a peak in 2001 when he was paid $25.5 million questions over the pay package caused one new york stock exchange seat holder to call for the resignation of grasso and the entire board. grasso appearing in a business forum in washington says he has the board’s support and is not stepping down no one is unanimously supported in any walk of life. mine included. i’m very blessed to have so much of the membership so responsive and so supportive so a long way to a short answer, no.
>> no, not stepping down. s.e.c. chairman william donaldson who was grasso’s predecessor at the exchange requested the formal explanation on grasso’s pay. when bloomberg news caught up with him today and asked if the s.e.c. will probe further, he said things are under review. yesterday grasso tried to defuse the controversy by renouncing an additional $48 million payment that had not previously been disclosed. today he was criticized by mel minnow, an advocate for corporate responsibility.
>> i was stunned, and very very distressed by the pay announcement. i think particularly because it was not disclosed over the years and i hope that it will be a trigger for some very very serious reform efforts. it really is the smoking gum demonstrating the failure of governs gorchb answer at the new york stock exchange.
>> since becoming chairman and c.e.o. in 1995 grasso has been paid $87 million in salary, bonuses and deferred incentives. critics say that is too much compensation for a position that involves policing the corporate governance practices of the exchange’s 2700 listed companies. now, earnest badway, a dechs attorney that specializes in regulatory issues thinks grasso will ride out the controversy.
>> i personally believe he does not have to step down to restore kfs in the governing body. i have not heard any anything that would suggest any type of wrongdoing. one has heard at least in thegress that the board made this compensation decision soley without mr. grasso’s input and it was done as a way of retaining good quality executives like grasso.
>> grasso says he plans to remain as chairman until his contract expires in four years. bob.
>> thank you. su keenan on the grasso story. since the low of march 11th, the s&p is up 26%. deborah kostroun is at the big board and points out that what led the market up were some of today’s biggest losers. so a little bit of irony from deborah kostroun today. deb.
>> sms ironic, especially when we talk about the markets. in fact, today the nasdaq was lower, along with that small-caps lower. small-caps just as low as the nasdaq. in fact, small-caps since the low of march 11, up 39%, even surpassing the gain in the s&p 500. you can see what it’s been doing over the past six months. but today a little bit different story. some of those small-caps lower in today’s session. of course, this―some of the stocks that have actually been performing quite well since the low of march 11th, mid-cap, their largest drop in five months with this s&p mid-cap 400 index. it was down 2%. in fact, since the low on march 11th, still up 31%. some of the components of that, greenpoint financial, furniture brand, fairchild semiconductor. semiconductors, that was the biggest drag on the market. kind of an interesting switch in the market as well, that is the fact that what we did see in today’s session, we saw some of the old names, really kind of come in and the old defensive-type names performing quite well like consumer staples. in fact, consumer staples like coca-cola, obviously a dow component performing quite well. these were some of the names that―going back a few years that defensively performed quite well. not only consumer staples but also drugmakers. some of the drug movers. for the past three days while this market has been trying to find its way, those drug stocks performing well. remember we started out monday’s session with an article out of barron saying the drug stocks relatively cheap in comparison to the rest of the market. also utilities, this is another old defensive-type area of the market where we would typically see some buying interest, and one of the laggards of the market, the utilities performing quite well in today’s session. also concern about rising mortgage rates, and that actually hurt many of the bank and many of the mortgage stocks today. back to you, bob.
>> thank you, deborah kostroun. well, when we come back stocks may have ended the day lower but our next guest says he is undaunted by today’s downward move.
