Richard Grasso is winning by losing. A New York appeals court just ruled that the excessive compensation case against the former NYSE chief must be dismissed because the exchange is now a publicly-traded for-profit entity, not the “not-for-profit” entity it was when Grasso was earning more than $10 million per year. The key claim against Grasso had been that compensation for a not-for-profit executive must be reasonable. Grasso’s pay package was anything but, and could only be explained (though never satisfactorily) by the fact that the NYSE board members voted to pay Grasso something like what they were paid.

Now the court has ruled that since the exchange is for-profit, there is no real point in making Grasso return the excess cash.

The irony here is that Grasso was the main proponent of the NYSE’s old and outdated way of doing business, which relied on an open outcry system of trading, dominated by specialist firms and cozy deals all around. It was in part because Grasso protected the specialists and the insiders that he was paid so much in the first place.

Grasso had already been fired by the time his successor John Thain arranged a merger with Archipelago, a big electronic trading outfit, the deal that led it to for-profit status. But his closest ally on the NYSE board, Kenneth Langone –also a co-defendant in the case against Grasso — was the staunchest opponent of the merger. Of course, it’s unlikely that the merger would have happened had Grasso still been in charge.

Thus it appears that the demise of the old Grasso regime is what will permit the bald bell-ringing ex-boss to keep his unearned millions.

Photo of Richard Grasso via Wikimedia Commons