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Rapid Change at NYSE Looks Unlikely With Reed

The former Citigroup chairman, who succeeds Dick Grasso on an interim basis, said it's time to 'listen.'

On his first day on the job, John Reed, the former


CEO brought in to put out the fire at the

New York Stock Exchange

, spent a lot of time listening but offered few thoughts of his own.

"My game plan is to come and to listen," said Reed, during a late afternoon news conference.

Reed, charged with trying to polish the image of the exchange following the uproar over Richard Grasso's $139.5 million pay package, said he comes to the job of interim chairman with an open mind about how to reform the Big Board. Reed also gave the impression he doesn't plan to use his interim position as an opportunity to remake the entire NYSE.

Aside from the dispute over Grasso's salary and the decision-making process that led up to it, Reed said the Big Board is functioning well and remains the "gold standard" for other stock exchanges.

He retreated from an earlier reported comment that he'd like to cut the NYSE's 27-member board in half. He also offered no view on whether the NYSE should consider an initial public offering. And Reed also was agnostic on whether it made sense to split the chairman and chief executive job into two positions.

Grasso, who resigned two weeks in the wake of the controversy over his pay package, had held both jobs.

Reed said it was premature to call for wholesale resignations on the NYSE board, something that many outside critics are calling for. He said before any decisions could be made on replacing board members, it was critical for existing directors to agree on a series of corporate governance reforms.

"Let's first get our minds around the governance issue," he said. "Before you look at the composition of the board, you got to get your mind around the architecture."

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It's been a busy few days for Reed, who came out of retirement to run the NYSE while it conducts a search for a permanent leader. On Friday, he returned to New York from a European vacation.

In contrast to Grasso, Reed has said he will take only a dollar salary for his job, which he hopes won't last more than a few months.

Earlier in the day, Reed was in Washington to meet with

Securities and Exchange Commission

Chairman William Donaldson, who has been pushing for reforms at the Big Board. An SEC spokesman declined to comment on the meeting.

Even before Reed began work, changes already were beginning at the NYSE. Last week, lead director Carl McCall, the former New York state comptroller, announced his resignation from the board. Soon after that, Juergen Schrempp, chairman of



, announced he also was stepping down.

Before resigning, McCall met with Reed and urged him to take steps to include more representation of the investing public on the NYSE board. He also recommended splitting off the Big Board's regulatory division from the NYSE's trading operation.

On Thursday, the NYSE's board was supposed to unveil a series of corporate governance reforms. Reed said it will be impossible to stick with that timetable now. But Reed, who has read a preliminary version of those proposals, said he doesn't believe the board needs to start the process from scratch.

Last week a group of state treasurers and pension fund managers, who control more than $500 billion in assets, called for an independent investigation of the inner workings of the NYSE, including the process that led the exchange to award Grasso a $139.5 million pay package. But Reed said he felt such an investigation was unnecessary.

He also came out in support of the NYSE's regulatory division, calling it "an asset" and a big "sales tool" for the NYSE in getting companies to list on the exchange. But he conceded that the NYSE might need to take steps to put more of a barrier between its regulatory division and its trading operation.