New York State Comptroller H. Carl McCall asked the board members of MarketSpan to oust chairman and CEO William J. Catacosinos.
In a letter, Mr. McCall said the decision by the former Long Island Lighting Co. board to pay $67 million in severance to executives who will perform similar functions at MarketSpan makes him question Mr. Catacosinos' commitment to MarketSpan shareholders.
MarketSpan was formed after the breakup of LILCO. Some LILCO assets went to New York State and the rest merged with KeySpan Energy Corp. to form MarketSpan. Mr. Catacosinos, formerly LILCO chairman and CEO, is to receive $42 million in severance.
MarketSpan spokeswoman Andrea Staub said many large shareholders have written in support of management and that the board of directors has hired an independent counsel to review the issue of compensation for former LILCO executives.
The $104 billion New York State Common Retirement Fund, controlled by Mr. McCall, holds about $14 million in MarketSpan stock.