The search is on for a new chair of the New York Stock Exchange, after the board's preferred candidate turned down the job vacated by the sudden resignation of Richard Grasso.

Reports said the board offered the chairmanship to Larry Sonsini, an exchange director and securities lawyer from California. He was given until 9 p.m. ET Wednesday night to accept the job. When he declined, the board appointed board member Carl McCall as the interim leader.

McCall is also the head of the NYSE board's compensation committee.

Richard Grasso
Richard Grasso

Grasso – the chairman of the NYSE for the last eight years – resigned Wednesday because of the mounting fury over his lavish compensation package.

The resignation followed an afternoon telephone conference call among NYSE board members.

"Dick offered to submit his resignation if the board requested, and the board did so and accepted that resignation," McCall said in a statement released by the NYSE.

Grasso's leadership of the world's largest stock exchange had come under fire after it was revealed that he was given a lump sum payment of almost $140 million US – representing 20 years of deferred compensation and retirement benefits.

Critics said that was inappropriate given the regulatory role of the NYSE and it undermined the credibility of the exchange among investors, many of whom had lost fortunes because of corporate excesses.

On Tuesday, several leading pension fund managers and the treasurer of California called for Grasso to resign immediately.

On Wednesday, several more state controllers, influential money managers and U.S. Democratic presidential candidate Joseph Lieberman joined the growing chorus calling for Grasso to go.

Some critics were also calling for the heads of NYSE board members too. Board members approved the size of Grasso's compensation package.

And while the U.S. Securities and Exchange Commission has demanded answers about Grasso's compensation, there has been no suggestion that Grasso did anything illegal.

Grasso's leadership of the exchange attracted praise from some quarters for increasing the number of companies that list on the NYSE.

He also garnered praise for his handling of the markets in the chaotic days following the Sept. 11 attacks in New York.

But Grasso made enemies for increasing fees to conduct business with the exchange.