Stock exchange names CEO - East Valley Tribune: Business

Stock exchange names CEO

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Posted: Friday, December 19, 2003 4:45 am | Updated: 1:46 pm, Thu Oct 6, 2011.

Interim Chairman John Reed named a new chief executive for the New York Stock Exchange on Thursday, selecting a securities industry insider to lead the NYSE back from scandals that have battered its reputation.

John Thain, 48, the president and chief operating officer at Goldman Sachs, was chosen to take over as CEO on Jan. 15. Reed said he will remain interim chairman through at least early January.

‘‘I can’t frankly think of a better set of hands to take charge of the exchange,’’ Reed said at a news conference. ‘‘I think we have an exceptional person at a time when, frankly, we require an exceptional person.’’

Thain said he was ‘‘excited’’ and ‘‘humbled’’ by the opportunity to lead the venerable institution out of a thicket of controversy stemming from the enormous pay package awarded former chairman Richard Grasso and a federal probe into the trading of its market-making specialists.

Reaction to the announcement, which came a day after the Securities and Exchange Commission approved the exchange’s new independent board and governance structure, was mixed.

SEC Chairman William Donaldson, a former CEO of the NYSE, praised the choice, saying, ‘‘John Thain brings a distinguished record of leadership and knowledge to this important role.’’

Some, however, questioned the choice of an industry insider amid controversy over its own practices and past dominance of the exchange, which is a key industry regulator.

‘‘My first impression is that ... it’s the goat minding the cabbage patch,’’ said John Bogle, founder of mutual fund giant Vanguard Group, according to Reuters. ‘‘I don’t think you can be more of a consummate insider than Goldman Sachs.’’

Reed, however, said it was essential that the new CEO was steeped in the industry.

‘‘The idea of having a CEO of the exchange who knows nothing about what happens on the floor of the exchange is simply a nonstarter,’’ he said.

The chairman’s job, he said, could be filled by someone with less experience who is expert at board operations. The SEC announced Wednesday that Reed had agreed to split the CEO and chairman positions, pleasing some NYSE critics.

Reed, who was brought in to overhaul the NYSE’s governance in the wake of the Grasso affair, said he hopes to locate a new chairman quickly and return to retirement.

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