The New York Stock Exchange yesterday named Mr John Reed, the former Citigroup executive, as its interim chief executive officer and chairman until a permanent replacement is found for Mr Richard Grasso, who resigned last week over his $187.5m pay package.
Mr Reed, who left Citigroup in 2000, was the top candidate identified by the NYSE board's search committee, and the only one who was offered the job, said Mr Laurence Fink, who led the recruitment effort. The announcement marks the first decisive step taken by the NYSE board to pull the world's largest stock market out of its most critical crisis in decades after forcing Mr Grasso to resign. It stems mounting speculation in the media about Mr Grasso's immediate successor and puts the focus on landmark governance reforms to be implemented by the NYSE board.
Mr Fink said: "John's excellent managerial experience, outstanding background in corporate governance and familiarity with the NYSE's varied constituents make him the ideal choice to chair the board." The interim NYSE chairman will start his post next week on a salary of $1 and no severance package. Mr Reed is a Wall Street veteran who helped orchestrate the 1998 merger of Citicorp and Travelers and then served as co-chief executive of the merged group with Sandy Weill. But the power sharing did not work and Mr Reed retired in 2000.
Mr Reed said he was honoured to be chosen as interim NYSE chairman but ruled out taking the post permanently. He said his priorities would be to adopt a comprehensive governance plan and then find a permanent replacement for Mr Grasso.
Mr Reed said he would step down from the board of Altria, the tobacco and food group and component of the Dow Jones Industrial Average.
The appointment received the blessing of Mr William Donaldson, chairman of the Securities and Exchange Commission. "He [Mr Reed] is independent, experienced and has impeccable credentials," Mr Donaldson said.
Mr Reed hinted that the NYSE board would be restructured by expressing his view that smaller boards tend to be more effective. - (Financial Times Service)
