Morgan Stanley CEO James Gorman announced at a shareholder meeting on Friday that he intends to step down “at some point in the next 12 months,” putting the reign of one of Wall Street’s longest-serving bank CEOs to an end.
He did not name a successor. Morgan Stanley’s stock dropped more than 2%. In this article, we’ll learn more about James Gorman’s To Leave As Morgan Stanley CEO.
Why It Matters: A Dose of Uncertainty at a Stable Bank
Mr. Gorman took over the firm in 2010 after Morgan Stanley almost bankrupted during the previous financial crisis. His tenure as CEO has been characterized by steadiness, at least by investment bank standards of boom and bust.
Morgan Stanley has avoided the consumer banking blunders of its rival Goldman Sachs by focusing on its consulting work for firms and wealthy individuals, including Elon Musk.
However, like its competitors, Morgan Stanley has recently been pinched by a slump in its bread-and-butter activity of assisting companies to go public, combine, and buy others.
Morgan Stanley was among the institutions that committed billions of dollars into what ultimately proved to be an unsuccessful attempt to save the ailing midsize lender First Republic.
Morgan Stanley has hired several advisers from that failed bank, enhancing its already enviable wealth management division, formerly known as Morgan Stanley Smith Barney.
“In my opinion, we are not in a banking crisis,” Mr. Gorman said on Friday, “but we have had and may continue to have a crisis among certain banks.”
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Background: An ‘invisible’ Hand On Wall Street
Mr. Gorman, an Australian native, began his career as a consultant at McKinsey & Company before becoming a banker.
Unlike Jamie Dimon, the only other major bank CEO with a longer tenure, Mr. Gorman has kept a low profile in public. “I’m pretty invisible, and that’s fine,” he told The New York Times in 2014.
Mr. Gorman is one of Wall Street’s highest-paid public-company CEOs, earning $31 million in 2022.
James Gorman will leave as CEO from a much bigger Morgan Stanley than when he started https://t.co/GhO2UWs4od
— Bloomberg (@business) May 19, 2023
Mr. Dimon is 67 and has shown no indication of stepping down anytime soon. Mr. Gorman, 64, is expected to leave at the same age as his predecessor, John Mack, who retired at 65.
What’s Next: A Corporate Succession Race
Mr. Gorman and Morgan Stanley did not provide a precise timetable for his exit as CEO. Mr. Gorman stated that he expects to take on the role of executive chairman “for a period of time” after stepping down. Mr. Gorman reiterated publicly on Friday that there were three “very strong” unnamed internal contenders to take over.
Mr. Gorman said he was aware of the television series “Succession,” which had spent years depicting the story of an intense corporate power battle when he hinted at his retirement without naming the bank’s future top executive.
About the controversy surrounding the show’s late patriarch, Morgan Stanley CEO declared he had “no plans to go out like Logan Roy.”
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For almost 4 years, Jason Martin has been a freelance writer for newspapers, journals, blogs, books, and online material. He covers the most recent news as well as many other topics.