NYSE’s Earnings Fall 50% in 2004 as Bonuses Double for Operating Chiefs

The New York Stock Exchange reported Wednesday that its net income tumbled 50% last year as expenses rose faster than revenue. Bonuses awarded to the Big Board’s co-chief operating officers more than doubled.

The exchange earned $24.6 million in 2004, down from $49.6 million in 2003.

Total expenses climbed 5.3%. The steepest rise came in expenses for professional services, a category that includes legal costs from litigation related to ousted Chairman Richard Grasso and a lawsuit related to the NYSE’s “specialist” stock trading firms.

The legal battle over Grasso’s compensation “is not the largest component of our legal fees,” said NYSE Chief Financial Officer Amy Butte in a conference call with reporters.

Revenue was nearly $1.08 billion last year, up slightly from $1.07 billion in 2003. The relatively unchanged revenue picture was due in part to a sluggish stock market, Butte said.

In its proxy statement, also released Wednesday, the NYSE broke down the compensation of some of its top officials.

John Thain, the former Goldman Sachs Group Inc. president who became NYSE chief executive in January 2004, earned a salary of $3.92 million and had $120,000 in other compensation.

Chief Regulatory Officer Richard Ketchum, also a new arrival to the NYSE, pocketed a $484,615 salary, a $600,000 bonus and $34,326 in other compensation.

Co-Chief Operating Officers Robert Britz and Catherine Kinney, two holdovers from the Grasso era, each collected a $750,000 salary, a $1.2-million bonus and other compensation that came to $81,557 for Britz and $81,371 for Kinney.

Their bonuses were up sharply from 2003, when Britz and Kinney each were awarded $525,000, but were down from 2002, when they collected $1.97 million each.