Reverse Spin: Psst…Hey, kettle! It’s the pot

Maybe Dick Grasso should consider changing his last name to Grosso.

The New York Stock Exchange announced on Wednesday that Mr. Grasso’s contract as chairman had been extended through May 2007 and that he had been paid $140 million in deferred compensation, retirement benefits and other savings built up during his 36 years at the Big Board.

The disclosure comes as many exchanges, including the NYSE, are calling on listed companies to improve corporate governance.

“If they’re going to clean up their listed companies, they have to clean up their own house too,” Thomas Joo, a professor and corporate governance expert at the University of California at Davis, reportedly said. “It’s like the pot calling the kettle black.”

The Securities and Exchange Commission apparently agrees, as it is considering an investigation into the salaries of senior execs at the top exchanges, according to reports on Friday.

Well, at least now we know why Mr. Grasso is always smiling when he rings that opening bell.

Did I do that?

* Of course, it was an “accident.”

NASD said Tuesday that the failure on the part of brokers to give investors the appropriate discounts on mutual fund commissions was mostly unintentional.

Brokers often neglected to add different funds in the same group to reach the break point, regulators said.

The problems arose less frequently in firms that process transactions on paper rather than electronically, NASD said.

Bearish on bonds

* It’s pretty safe to assume that investors noticed the dismal performance of the world’s biggest bond fund last month.

Investors yanked $803 million from Bill Gross’ $71.7 billion Pimco Total Return Fund, marking the first month of net withdrawals since August 1997. The outflows came as the fund had its worst month ever, falling 4%.

“Every bond fund had losses, and Gross had double-digit positive returns for several years before,” Robert Glovsky, president of Mintz Levin Financial Advisors LLC in Boston, reportedly said.

Full speed ahead

* It looks as if the U.S. economy is chugging along even faster than previously thought.

The Commerce Department on Thursday released a new-and-improved read on growth of gross domestic product for the second quarter. According to the new version, GDP grew at a 3.1% annual rate, significantly better than the 2.4% rate previously cited.

The increase partly reflects more military spending for the war in Iraq, the report states.

Urge to merge

* You know things are looking up when the oh-so-conservative banking industry starts dipping its toes back into the mergers-and-acquisitions waters.

Boston-based FleetBoston Financial Corp., the No. 7 U.S. bank, agreed Thursday to buy Progress Financial Corp. of Bluebell, Pa., for about $211 million in stock. The move, the second big bank deal in eight days, will boost Fleet’s presence in eastern Pennsylvania.

On Aug. 21, Pittsburgh-based PNC Financial Services Group Inc. agreed to buy United National Bancorp of Bridgewater, N.J., for $638 million as part of an effort to expand in New Jersey and Pennsylvania

Like our spin? E-mail comments or suggestions to Frederick P. Gabriel Jr. at [email protected].

Closing Quote

“The carriers are suckers because this is the only area where they see growth in the insurance business, and so they are willing to sacrifice profitability for growth.”

– Consultant Martin McBirney, on the viability of long-term-care products for insurance carriers. Page 19

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