NYSE Board Names Panel for Leader Search
Fri Sep 19, 7:41 PM ET
story.news.yahoo.com
By MEG RICHARDS, AP Business Writer
NEW YORK - The New York Stock Exchange (news - web sites)
board named a search committee to find its next leader and discussed
ways to reform itself Friday, as it began to navigate life after Dick
Grasso.
At its first formal meeting since forcing its
chairman and chief executive to resign earlier
this week over a pay scandal, the board
named Laurence Fink, CEO of investment
group BlackRock Inc., to lead a committee to
find Grasso's replacement. Fink did not
immediately return calls seeking comment.
The NYSE's directors are considering
sweeping changes following the public fury
over Grasso's $187.5 million pay package,
including a proposal from one director that
calls for all brokerage industry insiders to step
down from the board.
The board has come under fire for approving
the original $187.5 million pay package, and
is under pressure from federal regulators to
revamp its practices. Half the seats on the
board are held by top executives of
investment banks and brokerage firms - the
very businesses the NYSE is supposed to
monitor and regulate for fraud.
To address conflict of interest concerns,
Goldman Sachs CEO Henry M. Paulson Jr.
has suggested those affiliated with regulated
companies eventually be excluded from the
board so it could consist entirely of
independent directors. A Goldman
spokesman said Paulson has discussed the
idea several times with other directors.
Paulson's plan envisions an advisory panel composed of securities firm
executives and other members who hold seats on the trading floor, so
the owners of the exchange would still have a voice.
It was unclear how much support the plan had among other investment
banking executives.
There have been several calls for seats to be set aside for institutional
investors, including large public pension funds. The California Public
Employees' Retirement System, the nation's largest pension fund, called
Thursday for the NYSE to trim the 27-member board and allot more
seats to investors outside the securities industry.
McCall said a number of state treasurers and comptrollers have been
invited to testify before the board's special committee on governance "to
make sure their input is fully considered." The special committee,
co-chaired by McCall and former White House chief of staff Leon
Panetta, will present its recommendations to the board Oct. 2
McCall also said seven NYSE board members had attended a meeting
of active seatholders on Thursday, which he called "a very constructive
session." He said board members would attend another meeting of
exchange members next week.
"It is obvious that there needs to be more and better communication
between the members of the exchange and the NYSE board, and we are
committed to making that happen," McCall said.
The other directors named to the search committee were former
secretary of state Madeleine K. Albright; Robert B. Fagenson, vice
chairman of Van Der Moolen Specialists USA, a private securities
broker-dealer; Viacom Inc. president and chief operating officer Mel
Karmazin; Gerald M. Levin, retired CEO of AOL Time Warner Inc.; John
J. Mack, co-CEO of Credit Suisse Group, and Larry W. Sonsini,
chairman and CEO of Wilson Sonsini Goodrich & Rosati, a large law firm
specializing in representing corporate clients in the high-tech industry.
The board had asked Sonsini to serve as the board's interim CEO. He
declined. |
