Orlando, Florida, Nov. 5 (Reuters): One day before he releases his reform plan for the New York Stock Exchange, interim chairman John Reed said he planned to keep the exchange’s specialist floor-based trading system and said he will propose slashing the size of the exchange’s board.
In a speech to the Association for Financial Professionals in Orlando, Florida, Reed said he would propose an eight-member board, which would not include him. Reed, who was recruited out of retirement to take his post, added that he did not see himself taking a role as a non-executive chairman.
“I can’t tell you how much I’ve enjoyed retirement. I think it is extremely important for the exchange that I come and go,” said Reed.
Currently, the NYSE board is made up of 27 members, including 12 directors from the securities industry and 12 ‘public directors’. The board has been criticised as being too large to be effective and too closely tied to the financial companies that it is charged with regulating.
NYSE spokesman Ray Pellecchia said the specific proposed composition of the new, smaller board would be unveiled early on Wednesday at a briefing to be held at the exchange.
There will be ‘about two’ directors who will move over from the old board to the new board, he said, and the six new names will be announced. He declined to name the directors.
Reed said he would propose bylaws allowing that the roles of chief executive and chairman be split into two jobs, but would not mandate that.
Directors who are expected to remain are those who are not top executives at Wall Street firms, nor those who were closely linked to the creation and approval of former NYSE chief Dick Grasso’s $188 million compensation and benefits package.
One board member who sits in both those camps is Kenneth Langone, chairman of boutique investment house Invemed Associates.