Pension Officials Put Up for NYSE Board

March 26, 2004 ( - When the New York Stock Exchange (NYSE) board sits down in coming days to select its members, it will have no shortage of candidates, including several prominent state pension fund officials.

After taking director nominations this month, the NYSE gathered about 100 submissions, spokesman Ray Pellecchia told the Chicago Tribune. The NYSE’s nominating and governance committee is scheduled to present its recommendations to the 10-member board on Thursday. Incumbents are eligible to be renominated.

The board is to release the slate of nominees shortly after that meeting and members will vote to ratify the June 3, the newspaper said.

Nominees include several prominent officials who have been critical of the NYSE, investors, and a former top securities regulator.

The list, according to people familiar with the candidates, include several state pension officials. As part of a growing trend of fund activism in recent months, a number of pension fund leaders have been pushing for investor representation on the NYSE’s board.

Among the nominations: North Carolina Treasurer Richard Moore, who sits on the NYSE’s advisory board, was nominated by New York State Comptroller Alan Hevesi. Both have been critical of NYSE’s practices under former Chief Executive Richard Grasso and elements of the exchange’s reform efforts, including the refusal to separate regulatory and business functions.

Also nominated was Connecticut Treasurer Denise Nappier, who has joined the criticisms by Moore and Hevesi including the recent move by a number of fund officials to withhold votes from CEO Michael Eisner in his re-election to the board of Walt Disney Co.

Other nominees who have been active in seeking reform at the NYSE include treasurers Brian Krolicki of Nevada, Jonathan Miller of Kentucky, Michael Fitzgerald of Iowa and Randall Edwards of Oregon. Saying state treasurers are responsible for roughly $1 trillion in investments, Krolicki said he hopes the NYSE will tap one for the board. “I think that state treasurers have a unique role and perspective in this,” he said. “I think we would add significant value.”

Meanwhile, the influential California Public Employees’ Retirement System (CalPERS) nominated former Securities and Exchange Commission Chairman Arthur Levitt and investor Ralph Whitworth, a corporate governance expert and chairman at Apria Healthcare Group Inc. In a nominating letter to the NYSE, CalPERS President Sean Harrigan said of Levitt and Whitworth: “We believe they have the vision, passion and integrity to help restore the trust and confidence of America’s investing public.”

CalPERS, the nation’s largest public pension fund, has sued the NYSE and seven firms, alleging improper trading by market-making specialists.

Levitt, who built a reputation at the SEC as a champion of the individual investor, has urged the exchange to separate its business and regulatory functions. CalPERS has supported such a move, but interim NYSE Chairman John Reed rejected it, keeping them coupled under the oversight of the new, independent board.