WALL STREET N.Y. Stock Exchange picks interim leader

The former Citigroup CEO will be paid $1.
NEW YORK (AP) -- Financial observers cheered the naming of John S. Reed as interim leader of the New York Stock Exchange, saying he is a respected corporate veteran whose perspective should help bring much-needed stability to the Big Board.
The exchange named Reed, the 64-year-old former CEO of Citigroup, as its interim chairman and CEO on Sunday, four days after Dick Grasso was forced to resign over his newly disclosed $187.5 million pay package.
The NYSE will pay Reed, who has spent three years teaching and writing in retirement, $1 for his service.
In Reed, the NYSE gets a leader with extensive corporate experience -- but also a Wall Street outsider. He has never served on an NYSE committee, and has visited the exchange only once.
"He's certainly someone who is financially versed and respected, and not someone who has been caught up in current events," said Charles Elson, director of the University of Delaware's Center for Corporate Governance.
Need for reform
Reed accepted the job by phone from an island off France, where he was vacationing. In a conference call with reporters, he declined to discuss Grasso but acknowledged the need for reform.
"Over the last couple of weeks we've had some failures at the governance level," he said.
"I have seen crises that are quite comparable to the one the exchange has gone through," he said. "It didn't help anybody. It didn't help the people that were involved. It didn't help the exchange."
Reed, who insisted he was not a candidate for the permanent position, said he hoped the exchange would have a new leader by the end of the year.
Reed will resign his seat on the board of Altria Group Inc., parent of tobacco maker Philip Morris, because of his new responsibilities. Grasso had come under criticism for sitting on the board of The Home Depot, which is listed on the NYSE.
Grasso resigned Wednesday during an emergency meeting of the exchange's board. Many on Wall Street had expressed surprise and outrage over his pay package, even after Grasso agreed to give up about $48 million of the $187.5 million.
'Impeccable credentials'
Securities and Exchange Commission Chairman William Donaldson, who had expressed displeasure about Grasso's pay and met with NYSE officials last week, praised Reed in a statement for his "impeccable credentials."
Reed will take over at the stock exchange on Sept. 30 but said he would start working immediately by phone with chief operating officers, Robert Britz and Catherine Kinney.
Reed also said he likely would speak to Grasso in the coming weeks, if only as a courtesy and to ease the transition.
Some critics want the entire NYSE board of directors to step down because the board itself approved Grasso's pay package. The board has also been criticized for allowing its directors to sit on the boards of companies that trade on the exchange.
Reed told reporters he believed smaller boards of directors of 10 to 12 people were generally easier to work with, but did not indicate whether he would seek to trim the 27-seat NYSE board.