Dear John:
As Lead Director of the board of the New York Stock Exchange, I have tried to provide leadership through this time of crisis. I believe the board has taken significant steps in recent days, and I am delighted that I was able to play a role in bringing someone with your qualifications and reputation to the NYSE.
When you assume the role of Acting Chairman, you should be free to do whatever is necessary to restore the integrity of the NYSE while maintaining its role as the premier marketplace in the world.
To ensure that you - and the NYSE - can move forward without being encumbered by the past, I hereby tender my resignation from the board, effective close of business, Monday, September 29, 2003.
Early that day, I will preside over a meeting of the Special Committee on Governance of the NYSE, where we hear additional public testimony and consider recommendations that I will present to you, as planned, later in the day.
The Committee has been working very hard over the past few months to come up with recommendations that are meaningful, substantive, and designed to gain public confidence in the governance of the NYSE. As you know, we released an initial report in June, with ten recommendations that were immediately adopted by the board. At the time, we underscored our commitment to transparency and disclosure, including disclosure of the Chief Executive Officer's compensation. What we have learned in the past few weeks is that disclosure is a good thing - and should be done consistently and continually. Our commitment to transparency and disclosure continues to guide all the work of the Committee.
I look forward to continued work with the Committee. It is my personal hope that their recommendations will include the following:
- Greater representation of the investing public on the board
- Annual election of directors
- Annual evaluation of directors
- Expand the Governance Committee to include representatives of the investing public, particularly representatives of the state treasurers and public pension funds that the board met with on September 24, 2003.
- Reconstitute the Nominating Committee as a board committee, consisting solely of independent directors
- Ensure that the Human Resources and Compensation Committee consist solely of independent directors. Base executive compensation on appropriate industry comparisons, benchmarks, performance measures and evaluation processes. All of these factors - including the amount of compensation and accumulated benefits of directors and the five most highly compensated executive offices - should be publicly disclosed in an annual report.
- Initiate an immediate examination to identify and evaluate ways to separate the regulatory and trading functions to ensure that they are effective, independent and beneficial to the investing public.
I am proud of my contributions to the Exchange, particularly in the leadership role I played on both the Committee on Accountability and Listing Standards and the Governance Committee. It is my hope and my expectation that you will continue this process and implement reforms that will restore the reputation of this fine institution.
Sincerely,
H. Carl McCall
