- The Washington Times - Wednesday, November 5, 2003

NEW YORK (AP) — New York Stock Exchange interim chairman John Reed aired his reform plan yesterday and nominated eight members for a trimmed-down board to improve regulation.

But critics said it might 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 that more changes likely will be needed for the world’s richest stock market.

Mr. 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 Mr. Grasso’s ouster on 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.

Mr. Reed proposed keeping 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 number of directors to between six and 12.

Aspects of Mr. Reed’s plan have emerged in recent days in news reports and statements by exchange officials. But, yesterday was the first time details of the plan were made public.

Mr. 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 instead would form a separate executive panel to provide input on operations, such as listing standards and market structure.


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