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Morgan Stanley Taps 4 White Men As Candidates To Succeed James Gorman As CEO

Tyler Durden's Photo
by Tyler Durden
Thursday, May 20, 2021 - 01:52 PM

In a move apparently engineered to preempt shareholder concerns in the wake of JPM's succession-planning-oriented shakeup (CEO Jamie Dimon has said he won't retire for at least another five years, though he had a heart attack during the COVID crisis last March), Morgan Stanley is planing a similar move as CEO James Gorman positions two key lieutenants as possible successors.

Ted Pick, Daniel Simkowitz, Andy Saperstein and Jon Pruzan

Bloomberg reports that Ted Pick, billed as "the architect of Morgan Stanley's trading revival," and Andy Saperstein (who has helped grow the firm's wealth management business) have been tapped as co-presidents and given expanded roles atop Morgan Stanley, in a changeup that mirrors the co-president structure that's common on Wall Street.

Among other changes announced Thursday: Investment management chief Dan Simkowitz is being promoted to co-head of strategy alongside Pick, while CFO Jon Pruzan will become COO.

These four are now seen as potential successors who will be forced to publicly jockey to succeed Gorman, who has already spent 11 years at the head of Morgan Stanley, making him one of the longest-serving CEOs on Wall Street (aside from Dimon).

"I am highly confident one of them will be the CEO in the future," Gorman, 62, said of his leadership team in an interview. "It feels like the right time to more formally set up a transition over the next few years."

Notably, unlike JPM, none of the anointed successors at Morgan Stanley are women.

Though it's possible that Sharon Yeshaya, who will serve as Morgan Stanley’s next CFO, putting her in close contact with reporters and shareholders, might also emerge as a competitor for the top job.

It has been unclear who might succeed Gorman for two years since the exit of the firm’s colorful President Colm Kelleher, who was older than the CEO. His departure set off a race for the next generation of executives, and it apparently took a long time for Gorman to make up his mind.

Both Pick and Saperstein played important roles in the bank's comeback from the crisis.

With Pick, 52, Gorman is promoting a turnaround artist. He’s credited with rebuilding the firm’s equities business after the financial crisis, honing it into Wall Street’s dominant player. He then followed up by overhauling a fixed-income division that had been flagging. That won him oversight over Morgan Stanley’s investment bank -- including both trading and dealmaking.

While Pick will continue to run the institutional securities business, he will also be in charge of international operations.

Saperstein, 54, led the bank’s charge in wealth management, building a reliable revenue generator that’s become the envy of many rivals. Gorman himself had made his name in that business at Merrill Lynch, where he worked with Saperstein, and together the pair made it the centerpiece of Morgan Stanley’s pivot after the financial crisis.

And their ascension comes at a critical turning point for the bank, which has seen its share price outpace that of its hated rival, Goldman Sachs. Morgan Stanley recently took over Smith Barney from Citigroup, and last year acquired digital brokerage giant E*Trade Financial, a massive franchise and an impressive coup. At least this time around, Gorman is setting the stage for an orderly transition of power - not like the post-crisis battle between Gorman and a handful of rivals over who would take the reins.

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