Goldman Sachs Group Inc president John Thain was named head of the scandal-ridden New York Stock Exchange on Thursday, putting him in charge of a 211-year-old institution wrestling with deep structural questions over how best to run its business.
The appointment of the Wall Street insider comes at the end of a tumultuous year for the world's No. 1 stock exchange. Regulators have been investigating its floor traders and its management has been thrown into disarray since long-time chairman Richard Grasso was ousted in September amid withering criticism of his US$188 million pay package.
Thain, Goldman's former finance chief and current right-hand man to the firm's CEO, Henry Paulson, will succeed interim NYSE chairman and CEO John Reed.
The 48-year-old Thain will receive US$4 million in annual pay, in stark contrast to Grasso's compensation package.
Despite Thain's long association with Goldman Sachs -- which owns specialist floor trading firm Spear, Leeds & Kellogg -- he has said more electronic trading would be good for the market.
"I do think more of the trading will be done electronically," Thain said on Thursday.
At the same time though, Thain said the exchange, which already does a great deal of trading electronically, still needs specialists.
"I believe specialists are important to the functioning of the marketplace ... they deal with all kinds of large, complicated trades," he said. "It is very important that the specialists continue to play a role on the floor of the exchange."
Thain's status as a Wall Street insider left the exchange, which is investigating its floor-traders and attempting to revamp its governance structure, open to criticism.
"My first impression is that ... it's the goat minding the cabbage patch," said John Bogle, founder of Vanguard Group. "I don't think you can be more of a consummate insider than Goldman Sachs."
Others echoed this sentiment.
"We would have been more optimistic about the potential for change had the new chairman at least appeared to be more independent of exchange operations," said John Wheeler, manager of equity trading at American Century Investment Management.
For his part, Reed said it made sense to appoint a chief executive who was familiar with Wall Street and trading operations.
"For us to bring in some greatly talented executive from the aerospace industry, just to choose an arbitrary example, doesn't make any sense," Reed said at a press conference at the exchange's headquarters in lower Manhattan.
Reed, who is also on the board of directors of the Massachusetts Institute of Technology with Thain, said he will stay on as chairman until a new one is found.
Reed will become non-executive chairman when Thain formally starts his new job Jan. 15. Reed said he was not interested in remaining chairman on a permanent basis, but would be willing to stay on as a board member, if the new chairman and CEO wished him to.
SAFETY RISK: The government is working to categorize countries based on their COVID-19 cases and prevention efforts, which would determine quarantine periods The government plans to rank countries based on their COVID-19 risks to determine how to treat tourists and other travelers from those nations once Taiwan reopens its borders, but it is still working out the categories, a top health official told lawmakers yesterday. “We would divide countries around the world into several categories. One category would comprise those countries with very few confirmed COVID-19 cases, such as New Zealand and Palau. Travelers from the countries in this category would only need to practice self-health management,” Centers for Disease Control Deputy Director-General Chuang Jen-hsiang (莊人祥) told a Legislative Yuan seminar hosted by
China would attack Taiwan if there is no other way of stopping it from becoming independent, Chinese General Li Zuocheng (李作成) said yesterday. Speaking at Beijing’s Great Hall of the People on the 15th anniversary of China’s “Anti-Secession” Law, Li, who is chief of the Joint Staff Department of the Chinese People’s Liberation Army Central Military Commission, left the door open to using force. The 2005 law is China’s legislative basis for military action against Taiwan. “If the possibility for peaceful reunification is lost, the people’s armed forces will, with the whole nation, including the people of Taiwan, take all necessary steps to
SECURITY CONCERNS: The Telecom Technology Center ran black-box tests for the Executive Yuan on devices and software from Chinese, US and South Korean firms Network devices from several Chinese manufacturers are insecure and allow personal information to be leaked, testing commissioned by the Executive Yuan has shown. A variety of devices and software, including apps, from Chinese, US and South Korean manufacturers that are used by government agencies at the central and local level were subjected to black-box testing — in which the functionality of an application is examined without knowing about its internal structure, an information-security official said yesterday on condition of anonymity. The Telecom Technology Center conducted the tests, which simulated cyberattacks, to determine their resilience to the attacks, the official said. The center
RELATIONSHIP ‘TERMINATED’: US Speaker Nancy Pelosi said that the president’s action was ‘an act of extraordinary senselessness,’ a tone Chinese media echoed US President Donald Trump on Friday announced that Washington would withdraw funding from the WHO, end Hong Kong’s special trade status and suspend visas of Chinese graduate students suspected of conducting research on behalf of their government. Trump said in a White House announcement that Chinese officials “ignored” their reporting obligations to the WHO and pressured the organization to mislead the public about the outbreak. “We have detailed the reforms that it must make and engaged with them directly, but they have refused to act,” he said. “Because they have failed to make the requested and greatly needed reforms, we will be