Goldman Sachs (NYSE:GS) president John Thain stepped up to take the call as the new CEO of the New York Stock Exchange. Interim CEO John Reed will hold the post until mid-January, when Thain will come on board. The move shows some determination by the NYSE to act quickly in the wake of its approval from the Securities and Exchange Commission to overhaul the structure.
Thain has been vocal about the need for the NYSE to look more toward electronic trading, but believes that its embattled specialist system is still necessary on the floor of the exchange. Now that he's chief of the exchange, we'll soon see whether he indeed has the will to stare down the powerful specialist system. As we reported yesterday, the SEC found rampant trading abuse at the NYSE, and its proposed overhaul has prompted massive pension fund CalPERS to sue.
Notably, Goldman Sachs, Thain's former employer, owns one of the big specialist firms, along with LaBranche (NYSE:LAB), van der Moolen (NYSE:VDM), Bear Stearns (NYSE:BSC) and FleetBoston (NYSE:FBF).
This week, the NYSE reported that its overhaul includes plans to separate the chairman and CEO offices. John Reed will stay on as non-executive chairman until a replacement is selected. Reed noted today that he had no choice but to appoint a Wall Street insider to the post, noting that the thought of bringing in someone not intimately familiar with what happens on the trading floor was a "non-starter."
Reed also made a point of announcing that Thain's compensation would be fixed at $4 million per year, well below that of his predecessor, Richard Grasso. This is no inconsiderable sum, though it is substantially below what he would have made continuing in his role at Goldman Sachs.
