WALL STREET NYSE interim head unveils reform plan

The proposal would reduce the NYSE board from 27 to 12 or fewer.
NEW YORK (AP) -- New York Stock Exchange interim chairman John Reed aired his reform plan Wednesday and nominated eight members for a trimmed-down board to improve regulation. Critics say it may not be enough to eliminate trading abuses and conflicts of interest.
The Securities and Exchange Commission, which must approve the reforms, called the plan a "substantial and critical first step" but said more changes likely will be needed for the world's richest stock market.
Reed's plan, which was mailed Tuesday to the NYSE's 1,366 members for approval by Nov. 18, envisions the departure of all directors involved in approving the $188 million compensation package of former chairman Dick Grasso.
Outrage over lavish pay forced Grasso's ouster Sept. 17 and gave momentum to efforts to reform the exchange, including streamlining its 27-member board and distancing its regulatory and money-making activities.
Proposed membership
Reed proposed keeping just two current members of the board -- former Secretary of State Madeleine Albright and Herb Allison, chairman of the teachers pension fund TIAA-CREF -- while limiting the overall number of directors to between six and 12.
Other candidates are Euan Baird, former chairman of oil-field services concern Schlumberger Ltd.; Marshall Carter, former head of State Street Bank; Shirley Ann Jackson, president of Rensselaer Polytechnic Institute; James S. McDonald, former chief executive of Rockefeller & amp; Co.; Robert Shapiro, former chairman of agricultural and chemical giant Monsanto Co.; and Sir Dennis Weatherstone, former CEO of J.P. Morgan Chase.
Reed already has requested and received the resignations of a majority of the current directors that will take effect if the plan is approved. NYSE members, who had been briefed earlier on the outlines of the plan, are expected to approve it.
The current board would be replaced by one that oversees regulation and compensation. Securities industry executives would not be allowed to be members, but would instead form a separate executive panel to provide input on operations, such as listing standards and market structure.
The plan stops short of separating the NYSE's regulatory unit from its operations, and leaves intact the model of trading through human brokers. A recent SEC report disclosed by The Wall Street Journal detailed widespread trading abuses in the so-called specialist trading system and criticized the NYSE as slow to enforce regulations.