New NYSE CEO Hints About Changes

Securities and Exchange Commission Chairman William Donaldson said Thain "brings a distinguished record of leadership and knowledge to this important new role." Donaldson said he is looking forward to working with Thain as the NYSE "moves to address the many ongoing and important challenges that lie ahead."

Thain will make $4 million a year at the NYSE, which is far less than his predecessor, Grasso, but still a considerable sum for the head of a self-regulating body and quasi-public institution.

"I think we have an exceptional person at a time when frankly we require it," Reed said.

Some observers are concerned that Thain will not bring an outsider's perspective to the Big Board. Thain, a 48-year-old Massachusetts Institute of Technology graduate who has been instrumental in modernizing Goldman's in-house trading platforms, recently won a hard-fought power struggle with Goldman's John Thornton, who had shared the No. 2 position.

Still, Reed said the exchange had no choice but to choose a Wall Street executive for the post.

"The idea of having a CEO of the exchange who knows nothing about what goes on the floor of the exchange was simply a nonstarter," Reed said. "You must understand trading, you must understand finance, and for us to bring some greatly talented executive from the aerospace industry ... doesn't make any sense."

Reed made joking reference to Goldman CEO Henry Paulson's "ungenerous" opinion of Thain's appointment. "He feels that I have stolen a person who had a very important role there," Reed said. "But Goldman will probably benefit a lot if the New York Stock Exchange does well."