Calls for the resignation of New York Stock Exchange chairman Richard Grasso over his almost $140-million US pay package gathered steam Tuesday as California's public pension system said he should quit.

In a letter to Grasso released Tuesday, California state treasurer Phil Angelides, Sean Harrigan, president of the California Public Employees Retirement System and Jack Ehnes, CEO of the California State Teachers' Retirement System, said the heated debate over his pay had shaken faith in the exchange.

The officials said their complaint was that most of Grasso's pay covers "the time period during which the NYSE and the nation's other markets were being pummeled by the worst string of corporate scandals since the market crash of 1929."

Grasso's cashed-out benefits are worth $139.5 million US, including savings, retirement funds and incentives, but not his salary and bonus.

On top of that, Grasso was also entitled to another $48 million US. But in the wake of the firestorm over his pay he has said he will forego that amount.

On Monday, former NYSE chairman James Needham said Grasso and the directors who awarded him the big payout should resign.

"It's time to clean house," Needham was quoted as saying by Associated Press.

Traders and seatholders on the exchange are said to be circulating petitions calling for changes in the way the NYSE is run.

The issue of Grasso's future and his pay will likely be discussed at a seatholders meeting on Thursday and at a general meeting next month.