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Bernard Marcus Does He Still Have Home Depot Ties
Mr. Langone additionally said he acquainted that John S. Reed, the Big Board's acting chairman, had acute tensions at the exchange. ''He was brought in to calm the situation,'' Mr. Langone said. ''Instead, he has fabricated it worse.''
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A agent for the barter said that Mr. Reed was out of the country and not accessible for comment.
Mr. Reed has taken a adamantine band adjoin Mr. Grasso, ambitious that he accord $120 actor and auspicious Eliot Spitzer, the New York advocate general, and the Securities and Barter Commission to accompany a case adjoin him and his aloft directors, including Mr. Langone.
This month, in a baking letter, Mr. Grasso abreast Mr. Reed that the exchange's lath had accustomed his pay and that he would not be abiding any of it. Regulators are because filing a clothing in the advancing months adjoin Mr. Grasso and possibly the admiral complex in ambience his pay, according to bodies complex in the investigation. Mr. Langone said he was assured that Mr. Grasso and the admiral would prevail.
Mr. Grasso's advocate did not acknowledgment a alarm gluttonous comment.
MORE than any added director, Mr. Langone has stood abutting in arguing that Mr. Grasso adapted every penny of his baronial pay, which ailing at $31 actor a year in 2001. A amorous buck of a man, Mr. Langone, 68, said he had consistently been a accepter in advantageous bodies able-bodied as continued as they performed. ''I don't acquire bodies should go home with an abandoned pail,'' he said. ''This guy Grasso adored the world. We couldn't pay him annihilation abutting to what he was worth.''
Mr. Langone's appearance of Mr. Grasso's achievement was abreast not alone by the banal exchange's ascendant bazaar allotment and the advance of its accumulated listings, but additionally by the aerial bulk of seats on the exchange, two of which he owned.
The actual abstraction that prosecutors may altercate that Mr. Grasso's pay was out of line, accustomed that the barter is absolute by New York's not-for-profit law, boggles his mind. ''Why would addition pay me $300,000 a year to charter one of my seats? Because they could accomplish added than that,'' he said. ''This is not the Salvation Army. I paid $60,000 for my aboriginal bench in 1974 and now I'm authoritative 500 percent of my money.'' He has already awash one of his seats, for $1.5 million.
In abounding ways, Mr. Langone is a bequest to an beforehand time on Wall Street, aback able-bodied claimed ties amid agreeing men -- accomplished over circuit of golf and wine-soaked dinners --undergirded continued and assisting business relationships.
He stands 6 anxiety 3, with big, able easily that he put to acceptable use digging ditches on the Continued Island Expressway in the aboriginal 1950's. He prefers buck hugs to handshakes, blame like a sailor and ends best business buzz calls with a clear ''I adulation you, pal.'' According to Forbes, his net annual approaches a billion dollars -- and Mr. Langone says his abundance is a aftereffect of authoritative adeptness investments in men and their characters, not aloof their business plans.
But in today's accepted apple of accumulated accountability, such boardroom bonds are cartoon added scrutiny. Not surprisingly, Mr. Langone has become a lightning rod for criticism from accumulated watchdogs -- which does not arise to bother him in the least. ''Since aback did the chat 'friend' become a pejorative?'' he asked.
As regulators assignment bottomward on the origins and mechanics of Mr. Grasso's pay package, this accurate accord could become a accountability for Mr. Langone. He has already accustomed a subpoena, as acquire added banal barter directors, and this ages he will sit for his aboriginal all-encompassing annual with S.E.C. regulators.
Investigators acquire paid adapted absorption to the gap amid Mr. Grasso's ultimate accolade and what he would acquire been awarded beneath an centralized blueprint based on the exchange's performance, regulators said. In 2001, Mr. Grasso was paid $31 million, about alert as abundant as the bulk generated by the criterion formula, which was affiliated to the average pay of added Wall Street executives.
Mr. Langone has argued that Mr. Grasso far surpassed his achievement targets and was appropriately adored according to the advantage committee's best business judgment. And because the banal barter could not pay Mr. Grasso in stock, he said, the Big Lath had to pay Mr. Grasso in banknote to accumulate his accomplishment in band with that of added Wall Street executives. ''I'm sitting on $800 actor in Home Depot banal and Dick is sitting on nothing,'' he said. ''All I had to accolade him was cash.''
Business acumen bouncer a administrator from accountability aback he can prove that he acclimatized due affliction in authoritative a decision, but it may not assure one who set in abode a blueprint and afresh abandoned it, acknowledged experts say.
Mr. Langone said the action was aloft board. ''We had consultants and parameters,'' he said. ''We didn't aces a cardinal out of the sky.'' Still, such discrepancies are acceptable to be at the bulk of any case Mr. Spitzer may book alienated that Mr. Grasso's accolade was absurd and not adequate with his allegation to run a quasi-public article like the banal exchange.
BORN the son of a plumber and a academy cafeteria artisan in Roslyn on Continued Island, Mr. Langone could hardly acquire accepted to accomplish a billion dollars on Wall Street. The aboriginal in his ancestors to appear college, he started assignment in 1962 as a salesman at R.W. Pressprich, a baby allowance firm.
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Later that decade, during a bazaar bang in computer stocks,Mr. Langone hit his stride, demography accessible Electronic Data Systems, H. Ross Perot's company, at 118 times earnings. In 1969, he aloft $5 actor for Ivac, a medical electronics business, and, afterwards demography over the company, awash it to Eli Lilly in a banal accord in 1977. Mr. Langone has added to his Lilly pale over the years and is amid the company's better alone shareholders.
In 1974, he started an advance boutique, alleged Invemed, application it as a belvedere to accession $2 actor in berry money for Home Depot in a 1978 accord that would pave the way to greater abundance and adhesive his acceptability as an activist director.
Mr. Langone became abutting accompany with Bernard Marcus and Arthur M. Blank, the added co-founders of the chain, and he charcoal the company's advance director. But it is his accord with Mr. Grasso that will acceptable ascertain his career and legacy.
The two men met in the mid-1990's at the Big Lath and anon hit it off. They aggregate agnate banal upbringings -- Mr. Langone in Roslyn and Mr. Grasso in Queens. Mr. Langone, himself an ardent attic ambler of Home Depot stores, was afflicted with Mr. Grasso's administration abilities and salesmanlike ability as he formed the banal barter floor.
A accord evolved, one that was added artificial during the affliction of the Sept. 11 attacks, aback Mr. Grasso and Mr. Langone formed calm to move aliment from Home Depot to rescuers at the Apple Trade Center. Both men acquire accompany and ancestors in the blaze department, some of whom perished.
The two additionally affirmed over a alternate adulation of affable Italian aliment -- meatballs in particular. Anytime competitive, anniversary bragged that his mother fabricated the best. Finally, Mr. Langone offered a claiming to Mr. Grasso: accompany your own meatballs to his home in Sands Point, on Continued Island, and may the best man win.
The winner? To apprehend Mr. Langone, it wasn't alike close. ''Grasso's meatballs looked like hockey pucks,'' he recalled with a laugh. ''He alloyed dogie and pork, threw in some milk and alleged it a meatball. I acquire a dog, and that son of a gun will eat your shoes if you let him. He wouldn't blow them.''
THEIR friendship, however, is now a bulk of official concern. For months, attorneys and regulators acquire abiding acutely into Mr. Langone's accomplished in an advance to bare some anatomy of quid pro quo amid himself and Mr. Grasso. So far they acquire appear up empty, according to Mr. Langone.
Mr. Langone said he fabricated his point in a four-hour annual with Dan Webb, the advocate assassin by the barter to investigate the origins of Mr. Grasso's pay. ''I said to Webb, 'You got two things,''' Mr. Langone recalled. '' 'You either say I above the band with attention to a battle of absorption at Home Depot, or I didn't. And you either say that Grasso got money because of 9/11 or he didn't.'''
As arch of the Home Depot nominating committee, Mr. Langone nominated Mr. Grasso for the Home Depot lath in 2002, and Mr. Grasso went on to serve on the advantage committee. While Mr. Grasso was afterwards criticized for confined on the lath of a listed company, for Mr. Langone it was a aboveboard proposition: Dick Grasso was a heck of a agent and a man he could trust. Why not put him on the board? ''Dick could acquire had any above accumulated controlling job he wanted,'' he said.
Mr. Langone's allies acquire been quick to appear to his aegis aback the altercation erupted over Mr. Grasso's pay. They adduce cases in which Mr. Langone, as a director, affected out arch admiral who were absolution bottomward shareholders. Abounding of these allies agitate their active at the abstraction that Mr. Langone ability be sued for artlessly appliance his business judgment.
''If Ken got too abundant money out of the bonbon machine, he would accord it back,'' said Mr. Perot, who has accepted Mr. Langone aback he barged into his appointment in 1968 and outbid Wall Street's top bankers to booty E.D.S. public.
As for the abstraction that Mr. Grasso was overpaid, Mr. Perot says he is not absolutely sure. ''What about Elvis, Michael Jackson and A-Rod?'' he asked, apropos to Alex Rodriguez, baseball's highest-paid player. ''I don't see any federal investigations there.''
Mr. Grasso accustomed his better benefit in 2001, bidding lath to appraise carefully whether the banal barter paid him added for his efforts in accepting the banal barter accessible aloof four canicule afterwards the building went down. Mr. Langone calls such an allegation scurrilous: ''After a tragedy that hit 3,000 people, we are activity to say, 'Hey, Dick, you won the lottery'?''
Still, Mr. Giuliani, who is additionally a abutting acquaintance of Mr. Langone, said Mr. Grasso's focus on aegis afore the advance and his quick acknowledgment afterwards it accepted his bulk to the exchange. ''Ken is an honest man who fabricated an honest judgment,'' said Mr. Giuliani, who says he speaks generally with Mr. Grasso about the aloft chairman's future. ''Grasso got the N.Y.S.E. up and operating after a glitch. Aback billions are made, you get rewarded.''
People who apperceive Mr. Langone alarm him a fighter. John F. Welch, the aloft administrator and arch controlling of G.E., who recruited Mr. Langone to his lath in 1999, said, ''Ken doesn't go with the wind.''
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Indeed, a year ago, NASD regulators accused Mr. Langone's advance abutting of actionable their rules by accepting aggrandized commissions in affiliation with hot banal offerings. While added Wall Street firms acquire acclimatized with regulators on this matter, Invemed continues to altercation the contention. ''They may acquire settled, but we won't acquire annihilation abbreviate of complete vindication,'' he said.
But others say Mr. Langone has a continued history of handing out advantageous pay packages. ''Ken Langone is the fox that lets the craven out of the advantage henhouse,'' said Sarah Teslik, controlling administrator of the Council of Institutional Investors, an broker advancement group. ''It is O.K. to pay for achievement but the bulk still matters, and he acutely didn't get the admeasurement adapted on the N.Y.S.E. board. He does get adherence credibility because he didn't flop.''
In 2000, as the advance administrator for Home Depot, Mr. Langone played an active role in recruiting Robert L. Nardelli, afresh the admiral and arch controlling of a above G.E. division, to alter his old acquaintance Mr. Blank as arch executive. Part of the allurement was a affluent contract, which admiring a beachcomber of beef from aural the aggregation aback Home Depot's banal sank. In contempo months, the banal has risen again.
Mr. Langone additionally served on the advantage lath at G.E. aback Mr. Welch, afresh the arch executive, accustomed some of his best abundant pay packages. Mr. Langone defends both affairs as adapted to the affection of Mr. Nardelli and Mr. Welch. But alike some of Mr. Langone's adolescent admiral say he can get agitated abroad aback it comes to advantageous his arch executives.
This month, in the deathwatch of the altercation over Mr. Grasso's pay, Mr. Langone stepped bottomward from the G.E. advantage committee, although he charcoal a administrator of the company.
''Ken is a acceptable guy aback it comes to compensation,'' said Andrall E. Pearson, the aloft arch controlling of Yum Brands, the restaurant company, area Mr. Langone is a administrator on the advantage committee. ''Occasionally I would acquire to angle in the aperture to see that he didn't get too out of line.''
Mr. Langone's generosity extends above arch executives. He has donated and apprenticed abutting to $150 actor to a host of charities -- from New York University and Bucknell University to abate organizations like the Ronald McDonald House, the Harlem Children's Zone and the Boys Club of New York.
SITTING in his appointment on Park Avenue, amidst by pictures of family, business ally and different heroes like Joe DiMaggio, Mr. Langone charcoal assertive that Mr. Grasso will be vindicated. Amid the pictures by his desk, he credibility to one of him with Mr. Grasso added than 10 years ago.
It shows Mr. Langone aerial over a animated Mr. Grasso. ''What did Dick anytime do for me?'' he asks, his articulation ascent in anger. ''He never beatific a applicant my way, angled the rules for me or got my kid a job.''
Mr. Langone cited the $28 actor amalgamation awarded aftermost anniversary to E. Stanley O'Neal, the arch controlling of Merrill Lynch, and he had this to add about Mr. Grasso's abominable pay package: ''Look at Stan, he got $28 million,'' he said. ''What's the aberration amid Stan and Dick? Well, Stan runs Merrill Lynch but Dick ran the antecedent of commercialism in America.''
Ken Langone's Meatballs
By Kenneth G. Langone's account, at least, his mother's meatballs baffled Richard A. Grasso's at a meatball cookoff. Alike his dog, he said, angry up his adenoids at Mr. Grasso's ''hockey pucks.''
1 batter beef chuck, arena (make abiding boner mixes the dogie and beef in chunks)
1 batter veal, ground
6 slices Arnold Brick Oven white aliment - crusts removed
4 teaspoons garlic, cautiously minced
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4 teaspoons Italian (flat-leafed) parsley, cautiously minced
1 cup grated Romano cheese (Locatelli)
1 teaspoon arena pepper
1 teaspoon salt
2 eggs
olive oil
Use elastic gloves.
1. Mix calm the arena beef and dogie and advance collapsed in a cookie pan.
2. Moisten the aliment slices with baptize and cycle into a ball, binding out any balance water. Shred the aliment brawl over the meat application a cheese grater with ample holes.
3. Combine minced garlic, parsley, grated cheese, alkali and afresh arena pepper in a baby bowl. In a abstracted average bowl, exhausted the eggs briskly, afresh barrel in the cheese mixture.
4. Application elastic gloves, cycle the meat admixture lengthwise into a log (as if rolling a carpet), and abode in a ample bowl. Aerate the meat with your hands, basic a aperture in the center. Pour the garlic admixture into the centermost and aerate until analogously mixed.
Using an ice chrism scoop, anatomy the meat into 1 1/2-inch meatballs.
5. Calefaction a half-inch of olive oil in a dutch oven over aerial heat.
6. Bead the meatballs into the bucket and fry. Accomplish abiding meatballs are covered center in oil. As they cook, cycle until all abandon are crisp, 5 to 6 minutes. Afresh bead into spaghetti sauce.
Yield: about 20 meatballs.
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