NYSE Board Seeks to Extend Term
The New York Stock Exchange’s directors said Thursday that they would seek to stay on another year, disappointing exchange critics who hoped at least some new faces would be elected to the board in June.
The NYSE also said interim Chairman John S. Reed would extend his service at least until April 2005, an indication that the Big Board may be encountering difficulty filling the post permanently.
Reed, the 65-year-old former chief executive of Citigroup Inc., took over the world’s biggest stock exchange after the ouster of Richard Grasso, who left in September amid an uproar over his $188-million compensation package.
Reed was brought in to clean house and restore the exchange’s image. He said last fall that he expected to stay on the job only a few months.
One of Reed’s moves was to dissolve the NYSE’s 27-member board in favor of a new 10-person panel. In addition, the NYSE last month for the first time invited investors to nominate director candidates, and received 110 nominations.
But on Thursday, former Secretary of State Madeleine Albright, who chairs the board’s nominating and governance committee, said the “unexpectedly large response has made it difficult for the board to give proper consideration to all the individuals” in time for the June annual meeting of NYSE seat owners.
She said the current board would stand for election in June, and that seat owners would be asked to move up the next annual meeting to April 2005, at which time other board nominees could be considered.
The announcement drew a sharp response from the California Public Employees’ Retirement System, which has been critical of NYSE practices in the past and last month put up two director nominees.
“This is either an April Fools’ Day joke, or it is a sad indictment on the New York Stock Exchange’s ability to manage the world’s largest exchange,” said Sean Harrigan, CalPERS’ board president. “With all of the resources at its disposal, the board of directors of the exchange should be able to solve this straightforward problem of too many candidates.”
In the six months since Grasso’s departure -- in which the NYSE has remade its leadership, instituted new governance practices and revamped its trading rules -- the exchange has yet to locate a permanent chairman.
But the day-to-day job of running the 211-year-old marketplace now rests with John A. Thain, the former Goldman Sachs Group Inc. president whom Reed picked as chief executive in December.
Thain told Bloomberg News on Thursday that “the board thought it was in the best interests of the exchange” for Reed to remain chairman, “and he somewhat reluctantly agreed.”
