Morgan Stanley CEO James Gorman unveiled his leadership shuffle after more than a decade by designating his most likely successors as a small group of lieutenants, with two in particular.
Ted Pick, Morgan Stanley’s trade re-launch architect, and Andy Saperstein, the wealth management powerhouse, were appointed co-Chairs and expanded roles on the rival Wall Street Bank.
Other changes include investment manager Dan Simkowitz co-heading strategy with Pick, and CFO Jon Pruzan becoming Chief Operating Officer.
The Shuffle places Gorman, who has been CEO of a major US bank for 11 years, in a public competition, making him one of the longest-serving CEOs of any major US bank. This competition propels the fourth quartet to victory. According to a person familiar with the situation, the boss informed the Board that he intends to stay for at least another three years.
“I’m sure one of them will become CEO in the future.” In an interview at the age of 62, Gorman discussed his management team. “It appears that the right time for a transition in the coming years has arrived.”
The refurbishment takes place only two days after the restructuring of its own leadership team and two women who could one day succeed him by promoting JPMorgan’s Chase & Co. Jamie Dimon is the only CEO of a major US bank who has served longer than Gorman.
Morgan Stanley’s Chief Financial Officer position will be transferred to Sharon Yeshaya, Head of Investor Relations, giving her a stronger voice among investors and analysts.
The position of Gorman’s top deputy was vacant two years after the departure of the colourful President Colm Kelleher, who was two years older than CEO. This departure provided them with an opportunity to shine in front of the next generation of managers.
He eventually solved two people who were critical in Morgan Stanley’s recovery from the 2008 financial crisis and strengthened its Wall Street operations and established a client money franchise. Morgan Stanley has managed to achieve the best output on the stocks of top competitors in the last five years, and managers have hopefully finally shed the label that has long dogged him: the littlest big bank.
Executives were unsure about the impact of the bank’s rising shares on the archrival Goldman Sachs Group Inc. at one point early last year. Morgan Stanley recently surpassed Citigroup’s market value, which has two assets.
Gorman promotes the return artist Pick, 52. Following the financial crisis, he is credited with reviving the company’s equities business and elevating it to the top of Wall Street. Then he returned to the company’s faltering fixed revenue division. It gave him control of Morgan Stanley’s investment bank, as well as trade and business.
Pick will continue to run the institutional securities business while overseeing international operations.
At the age of 54, Saperstein led the bank’s wealth management team, building a dependable generator that many competitors admired. Gorman made his name at Merrill Lynch, where he collaborated with Saperstein, and this pair became the focal point of Morgan Stanley’s post-financial-crisis pioneer.
Morgan Stanley acquired last year the franchise of Citigroup’s Smith Barney and E*Trade Financial Corp., which is nearly as important as the investment bank.
The serene Gorman handover is a far cry from the 2010 ascent to the highest point. It was battling the global financial crisis at the time, as well as vicious infighting among its senior ranks. One of the world’s leading credit rating companies faced the terrifying prospect of a catastrophic decline soon after taking over the banker from Melbourne.
“We had to face a number of questions at the time, and we were reeling from the financial crisis,” Gorman said. “It’s undeniable. You make these changes when you have the ability and strength to do so.”