Europe's Grasso Effect

Outrage about executive salaries is missing a couple of decimals in Europe. In September New York Stock Exchange boss Dick Grasso resigned amid a backlash over his $188 million deferred-compensation package. Around the same time, the chairman of the world's third largest food retailer, scandal-tainted Netherlands-based Royal Ahold (whose U.S. chains include Giant Food and Stop & Shop), stepped down following national outrage over his failure to inform investors of the two-year, $6.8 million contract he gave new CEO Anders Moberg. The French government pressured Pierre Bilger, the ex-CEO of engineering giant Alstom, into returning a $4.6 million severance payment, and shareholders of Europe's largest drugmaker, London-based GlaxoSmithKline, rejected the $36.5 million payment CEO Jean Pierre Garnier would receive if he lost his job. "Everyone in Europe is being very careful right now," says Dan Konigsburg, a corporate-governance analyst at Standard & Poor's in London. "No one wants to be like Grasso." They will need a big raise for that.