NYSE Names New Chief Executive, Anticipates 'Embarrassing' Report
On the same day that the New York Stock Exchange announced its next chief executive, its interim chairman discussed a pending report on the Big Board's governance structure, complete with facts he called "embarrassing."
John A. Thain, president of Goldman Sachs, will become the NYSE's chief executive on Jan. 15. Thain will become the Big Board's future as it struggles to put behind it an executive compensation scandal that forced the resignation of Richard Grasso in September.
Thain, who has held the No. 2 position at Goldman, said at a news conference on Thursday that he looks forward to his partnership with the exchange.
"Let us work as one to restore investor confidence," he added, reading from a statement.
At the same news conference, Interim Chairman John Reed said that Chicago lawyer Dan Webb, who investigated the scandal, would release his report and that it could potentially be used in private lawsuits against the exchange.
"The facts are embarrassing," Reed told reporters on Thursday. "I've read the report, and basically it confirms in detail that we had serious malfunctions of what people would consider to be corporate governance and it's unfortunate."
"The facts speak for themselves," Reed said. "We've had a number of embarrassments in corporate America over the last three or four years that do embarrass me, and what happened here at the stock exchange is one of those."
In a nod to the scandal's impact, Reed said Thain would have no contract, would serve at the pleasure of the board, and would be paid $4 million (an $8 million pay cut from his Goldman Sachs salary). Reed added that Thain "is not going to participate in any sort of strange retirement package that existed beforehand."
Reed, who came out of retirement to serve as interim chairman, said he had not been interested in the position. Reed said he would help Thain find the next chairman and would be willing to continue to serve on the exchange’s board.
"I enjoy retirement," he said. "I recommend it to everyone."