NEW YORK (CNN/Money) - John Reed, the former chairman and co-chief executive officer of Citigroup, has been named interim chairman and CEO of the New York Stock Exchange following the resignation of Richard Grasso last week, exchange officials announced Sunday.

"We are pleased and fortunate that John has accepted our offer to become the interim chairman and chief executive of the NYSE," said Laurence D. Fink, who chaired the search committee. "John's excellent managerial experience, outstanding background in corporate governance, and familiarity with the NYSE's varied constituents make him the ideal choice to chair the Board."

The New York Stock Exchange board of directors has tapped John Reed, the former head of Citicorp, as interim chairman. CNNfn's Chris Huntington. Play video (Real or Windows Media)

"When asked if I'd be willing to help out, I think the only answer that you could come up with is, 'Yes,' "; Reed said, speaking to reporters by telephone from an island off the coast of France.

"The institution is simply too important and the role -- particularly now with many of the changes going on in corporate America -- is too important. And I just felt that if I could help out on an interim basis, that I was honored to do so."

Reed will return to the United States and officially take the helm of the NYSE on Sept. 29, he said. He said a permanent chairman-CEO would be selected "as soon as it can be done properly," and he would not be a candidate for that post.

Reed was chairman and CEO of Citigroup and Citibank from 1994 to 1998, when it merged with Travelers Group. He retired from Citigroup in April 2000, after a power struggle left Sanford "Sandy" Weill and former U.S. Treasury Secretary Robert Rubin in control of the firm.

Reed will be paid $1 for his work as interim chairman.

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Reed's appointment follows Richard Grasso's departure last week in a storm of scandal concerning a pay package that included a $139.5 million lump-sum payout in deferred compensation and retirement benefits.

The details of Grasso's pay package infuriated many business and political leaders, coming after last year's corporate scandals and disputes over excessive executive pay.

"Dick Grasso's pay package is extraordinarily excessive, but the amount is just a symptom of the real problem," said Sen. John Edwards, D-N.C. and a presidential candidate, in a statement before Grasso's resignation.

Reed said that one of his tasks will be to investigate reforms into the way the exchange is governed by its board. "I've sat on any number of boards, some that function quite well, some that did not. I have seen crises that are quite comparable to the one the exchange that has recently gone through over this compensation issue," he said.

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Reed said it would be "inappropriate" to comment on Grasso's compensation package. But he did say the controversy "was something that did not help anybody."

"It didn't help any of the people involved, and it didn't help the exchange. And very frankly, it didn't help the reputation of the private sector in the United States," he said.

William Donaldson, chairman of the Securities and Exchange Commission, which oversees stock trading, applauded the selection of Reed and the NYSE's "prompt action" in appointing him. "I am gratified that he is willing to take on this critical post. He is independent, experienced and has impeccable credentials, all of which will be crucial as he works with the NYSE board to ensure the highest standards of governance," Donaldson said in a statement.  

Reuters contributed to this report.