The New York Stock Exchange today announced a new procedure to allow the investing public to nominate director candidates.  This is one of a series of reforms instituted last year to strengthen the independence, transparency and effectiveness of the Exchange’s governance.

The NYSE yesterday posted on its website (www.nyse.com/nysegovernance) its new policy seeking input from equity investors.  This marks the first time the Exchange is seeking such suggestions, which will be considered along with input from NYSE members, which the Exchange has always sought. 

Under the policy, candidates must be independent from NYSE members, member firms, listed companies and Exchange management.  In addition, candidates must have the experience necessary to gain a basic understanding of the NYSE’s self-regulatory function and operational, financial and strategic objectives.    

Further, “director candidates will be selected on the basis of: outstanding achievement in their professional careers, broad experience, wisdom, personal and professional integrity, and their ability to make independent analytical inquiries,” the policy states.

All suggestions must be received by March 24 and will be submitted for consideration by the Nominating & Governance Committee of the NYSE Board of Directors.  The Committee will discuss its recommendations with the full board on April 1, and a slate of candidates for election to the Board of Directors will be issued shortly thereafter.  NYSE members will receive a proxy statement in advance of the annual meeting on June 3, at which directors will be elected.  Directors serve for a term of one year, and may stand for re-election.  NYSE director compensation is $60,000 per year for directors other than John S. Reed and John A. Thain.  Directors may choose to waive the fee.

Text of the policy statement follows:

 

Candidate Nomination Policy for NYSE Board of Directors

        If you are an investor in equity securities or a member of the Exchange you may recommend director candidates for consideration by the Nominating & Governance Committee of the Board of Directors.

        All director candidates nominated by an investor in equity securities or an NYSE member pursuant to the requirements below will be submitted to the Committee for its review.

 

Criteria for Director Candidates

1. The NYSE Nominating & Governance Committee will actively seek candidates committed to serving the interests of the public and to strengthening the Exchange as a public securities market.

2. Director candidates will be selected on the basis of: outstanding achievement in their professional careers, broad experience, wisdom, personal and professional integrity, and their ability to make independent analytical inquiries.

3. The Committee believes that director candidates must:
   
   
   1. have the experience necessary to gain a basic understanding of:
      - the self-regulatory functions of the Exchange,
      - the principal operational, financial and strategic objectives and plans of the Exchange,
      - the results of operations and financial condition of the Exchange and its significant subsidiaries or business segments,
      - the position of the Exchange and its business segments relative to its competitors;

   2. have a perspective that will enhance the Board's strategic discussions; and

   3. be capable of and committed to devoting adequate time to Board duties and be available to attend Board and committee meetings.
   
   
4. At least one member of the Board should have the qualifications and skills necessary to be considered an "Audit Committee Financial Expert" under the Sarbanes-Oxley Act of 2002, for the purpose of serving on the Audit Committee.

5. Board members (except the CEO) must be independent from NYSE members, member organizations, listed companies and certain other broker/dealers under the guidelines established by the Board.  Among other things, at a minimum, no candidate may be employed by an NYSE listed company or a member organization.

6. Board members (with the exception of the CEO) also must be independent from Exchange management in a manner comparable to the requirements of the NYSE governance standards for its listed companies.

7. The Committee will not discriminate on the basis of race, color, national origin, gender, religion, disability, or sexual preference in selecting director candidates.

 

How to Recommend a Director Candidate

If you would like to recommend a director candidate for consideration, you may do so by submitting the following information for each candidate no later than March 24, 2004 to Darla C. Stuckey, Corporate Secretary, NYSE, 11 Wall Street, New York, NY  10005. 

• The director candidate’s name and business address.
• Your name and address and a statement that you are a member of the Exchange, or that you are an investor in equity securities with documentation (i.e., brokerage statements) showing that you own equity securities.
• A statement describing any relationship you have with the candidate.
• A resume or curriculum vitae describing the director candidate’s qualifications, which clearly indicates that he or she has the minimum experience, skills and qualifications that the Committee has determined are necessary to serve as a director. 

Thank you for your interest in and contribution to the Exchange.