Morgan Stanley, one of Wall Street’s most prestigious banks, said Wednesday it has chosen Ted Pick, a three-decade veteran of the firm, as its next chief executive, ending an unusually public three-way race that began with James Gorman. , chief executive since 2010, once jokingly compared it to the television series “Succession”.
Mr Pick will start his new role in January. His rivals for the position, Andy Saperstein and Dan Simkowitz, will take on larger roles as co-chairmen, overseeing Morgan Stanley’s wealth management and sales and trading businesses, among other areas.
Mr. Gorman, 65, said he hopes and expects Mr. Saperstein and Mr. Simkowitz to stay for a long time. The bank did not make anyone available for an interview.
“We were fortunate that we had three really talented internal candidates,” Mr. Gorman said after the announcement. “Everyone told me this was going to lead to some big tribal war – it didn’t.” The bank publicly identified those internal candidates, a departure from the typically secretive process preferred by much of corporate America for top jobs.
Mr. Pick, 54, joined Morgan Stanley in 1990 and rose through the ranks in its investment banking and trading businesses, most recently serving as co-chairman overseeing those units. In an interview, he said he did not find out that he would be named chief executive until about 4:30 pm on Wednesday, when the bank’s board of directors called him into a meeting and gave him a standing ovation.
Mr Gorman is set to inherit a very different bank to the one he took over after the 2008 financial crisis. Morgan Stanley’s big bets on subprime loans turned sour during the mortgage meltdown, leaving it with huge losses and forcing it, like many of its peers, to seek outside investors and a government bailout.
Even before the financial crisis, Morgan Stanley was the site of much Wall Street theater; In 2005, John J. Mack, a longtime leader of the bank who left to take the top job at Credit Suisse, was succeeded by Philip J. Purcell returned in a boardroom coup, removing him from the post of chief executive. The power struggle was captured in “Blue Bloods and Mutiny: The Fight for the Soul of Morgan Stanley” by journalist Patricia Beard.
But just four years later, Mr Mack said he would step down as chief executive, after a tumultuous period of both high profits and losses sent the publicly traded bank’s share price plunging. Mr. Gorman stabilized the bank by focusing on building its brokerage business, including the Smith Barney franchise it acquired in 2009, which provides services to wealthy individuals. Large acquisitions in wealth management, such as the $13 billion purchase of E-Trade in 2020, have further boosted Morgan Stanley’s business, reducing its reliance on banking and trading units that can be more volatile.
The bank also serves “blue blood” customers such as Elon Musk. With a strong technology banking practice, Morgan Stanley played a central role last year in Mr Musk’s acquisition of Twitter, now known as X. The bank was one of those that lent money to Mr Musk to get the deal done, a decision that could result in losses given the social media platform’s struggles.
In recent years, Morgan Stanley has kept a lower profile than many of its peers, at least compared to the play of its downtown rival, Goldman Sachs. Goldman Chief Executive David M. Solomon is trying to reorient his business toward its traditional mainstays after an unfortunate push into consumer banking, even as rumors swirl about how long he’ll stay in the job. Will stay.
Morgan Stanley has suffered some sharp blowback recently. In its latest quarterly earnings report last week, investment banking revenue declined, wealth management flows slowed and profit dropped nearly 10 percent from a year earlier.
This year the bank’s shares have declined by 17 percent. Shares were little changed in after-hours trading following the announcement of Mr Pick’s appointment.
Neither Mr. Gorman nor Mr. Pick said he was bothered by the stock’s decline. Both said Mr Pick’s selection should not be interpreted as a signal that the bank will favor any particular business branch of its own.
“There will be a change in leadership, but no change in strategy,” Mr Pick said.
Mr Gorman said: “You pick a CEO based on his instincts.”
One thing that has changed, Mr. Pick said, is their terminology. The Wall Street Journal reported in 2017 that his propensity for impurity Had attracted the attention of Morgan Stanley’s top executives.
Asked about his current practices, Mr. Pick said he had adopted “the King’s English” and was “very fond of the whole dictionary.” He added, “There are a lot of places to go beyond four letters.”