The New York Supreme Court threw out four chargers against former New York Stock Exchange Chairman Dick Grasso, who made headlines in 2003 for his $190 million pay package. The Washington Post reports:

[Attorney General] Spitzer brought suit in 2004, a year after Grasso was removed from his post, claiming that the compensation package was exorbitant for the executive of a not-for-profit corporation. According to court documents, Spitzer contended that the compensation was not justified by the work performed by Grasso and therefore a violation of the Not-For-Profit Corporation Law. The suit also alleged that Grasso handpicked the NYSE board members who decided his package and they had ignored the board's system for calculating compensation.

The four claims against Grasso that have been tossed out were not based on specific state laws, but Spitzer argued that as attorney general he had the right under common law to act in the public interest. By contrast, the two remaining charges are based on state statutes regarding unlawful transfer of corporate assets and breach of fiduciary duty.

"It's more complex in the sense that they have to prove more than they otherwise might," said Richard Schulman, counsel at Bryan Cave who specializes in securities and business fraud litigation.

The Albany court's decision yesterday is being viewed by some legal and financial experts as a blow to attempts to rein in executive compensation.

"I think that this ruling clearly indicates that a court is going to be very skeptical in overruling an internal compliance committee in their determination so far as what is fair and reasonable compensation," said Steven Caruso, a partner at Maddox Hargett & Caruso.