NYSE selects Goldman Sachs head
Friday, December 19, 2003
NEW YORK -- Moving quickly after federal regulators OK'd an overhaul plan, the New York Stock Exchange named Goldman Sachs firm president John Thain as its new chief executive.
The announcement Thursday came only a day after the Securities and Exchange Commission approved the NYSE's proposal to overhaul its governing structure.
Thain, 48, will succeed interim chairman and CEO John Reed, who has held those positions since the September ouster of Dick Grasso amid a furor over the size of his pay package.
On Wednesday, SEC commissioners voted to approve an overhaul plan for the exchange after NYSE agreed to split its top executive position in two to avoid the concentration of power.
"In this way, the NYSE should be in a better position to protect against the concentration of too much executive authority in one individual," SEC chairman William Donaldson said.
Reed will resign as interim CEO but will stay on as interim chairman while the search continues for a permanent chairman of the NYSE.
Thain's appointment is effective Jan. 15, and Reed said Thain will be paid $4 million.
Outrage over Grasso's $188 million pay package forced his ouster on Sept. 17 and gave momentum to efforts to reform the exchange, including streamlining its bloated 27-member board and distancing its regulatory and money-making activities.
Reed said Thain brings "a number of exceptional qualities for which he is widely known: integrity, intelligence, and extensive knowledge of the financial markets."
In a statement, Thain said he viewed the appointment as "a tremendous opportunity and challenge" and said he intends "to build on the strengths of this great institution."
Thain has been president of Goldman Sachs Group since May 1999 and previously oversaw its European operations.
The stock exchange overhaul plan approved by the SEC Wednesday also calls for a smaller and more independent board of directors to oversee regulation of the exchange, and appointment of a chief regulatory officer.
The plan was endorsed last month by 98 percent of the exchange's members. SEC approval was required for it to go forward.