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NY Stock Exchange Names New Chief Executive - 2003-12-18

The New York Stock Exchange has named a new chief executive one day after federal regulators approved an overhaul of the organization. The announcement follows a scandal earlier this year involving a multi-million dollar payment to its then chairman. John Thain, the president of investment firm Goldman Sachs, was confirmed as the new chief executive of the New York Stock Exchange Thursday.

Mr. Thain, who has been the number two executive at Goldman, one of the biggest investment banks on Wall Street, succeeds John Reed, who has served as interim chairman and chief executive since Richard Grasso resigned in September amid a scandal over the size of his pay package.

The move comes a day after the Securities and Exchange Commission unanimously approved a new governing structure for the Big Board, which called for the division of executive responsibilities between a chairman and chief executive officer rather than transferring power to one individual.

William Donaldson, the SEC chairman, had urged the division to keep too much power from being concentrated in the hands of one person.

Professor of Finance at New York's Baruch College, Robert Schwartz, says he supports the decision to split the helm at the exchange.

"I think in the past the exchange has done an extremely good job in dealing with the issues surrounding trading," he said. "Of late there is much that is changing in all the markets in any event and I think splitting these two offices reflects in part the complexity of what is involved and the need to do things as efficiently as possible from the top."

The selection of Mr. Thain may not silence critics, however, who were hoping that the new exchange chief would come from outside Wall Street. In addition to approving that the exchange separate the jobs of chairman and CEO, the agency also called for the Big Board to establish a smaller and more independent board of directors to oversee regulation of the exchange and appointment of a chief regulatory officer.