The new recruit appears set to become the second investment-bank bigwig chosen by NYSE interim Chairman John Reed, who tapped John Thain, former president of Goldman Sachs' investment bank, to assume the CEO's job as of Jan. 15. Ketchum is no stranger to running an exchange: He headed the NYSE's arch-competitor, the electronic Nasdaq stock market, for three years before taking up the post with Citi (C
The NYSE has made great strides since September, when the scandal-tainted Richard Grasso stepped down as chairman. It has created an independent board and split the chief executive and chairman posts that Grasso once held as one. But much is left to be done. Ketchum and Thain will have to combat the NYSE's decline in market share, heightened competition from electronic exchanges, and growing discontent among its 1,366 member firms -- all while enduring more regulatory scrutiny.
NEW PLATFORM. Mission No. 1 for Ketchum will be to patch up differences between the exchange and Congress. Lawmakers have turned their ire on both the NYSE and Security & Exchange Commission Chairman William Donaldson for lax supervision of existing securities law and the illegal trading practices of some securities firms.
Savvy in technology and automated trading, Ketchum is likely to work with Thain in developing better electronic-trading platforms. Such a move would satisfy both institutional and retail investors by assuring them that trades are priced quickly and efficiently.
Citing unnamed sources, The Wall Street Journal reported on Jan. 7 that Ketchum had accepted the job two days earlier, and that a formal announcement was expected to follow the NYSE board meeting. NYSE, Citigroup, and Nasdaq all declined to comment on the report.
SALARY CONTROVERSY. BusinessWeek Online first reported on Nov. 18 that the NYSE was quietly looking to replace its chief regulator and third-highest executive, Edward Kwalwasser (see BW Online, 11/18/03, "The Big Board Wants a New Top Cop"). Senior Writer Gary Weiss reported that the exchange hired an executive-recruitment firm to find a replacement for the 63-year-old NYSE veteran.
Kwalwasser, who holds the rank of group executive vice-president, has headed regulation and enforcement at a time when NYSE oversight of floor trading has come under sharp criticism. He also has been slammed for his high pay -- $1.6 million in salary and bonuses in 2002. By Mara der Hovanesian in New York