Morgan Stanley names co-presidents, sets up Gorman succession race

Dive Brief:

Morgan Stanley CEO James Gorman announced a raft of promotions Thursday among the bank’s top ranks, stoking speculation that one of four executives will succeed him as chief executive. “I am highly confident one of them will be the CEO in the future,” Gorman, 62, told Bloomberg.
Ted Pick, the head of the bank’s institutional securities group, and Andy Saperstein, who leads Morgan Stanley’s wealth management arm, have been named co-presidents of the bank, setting up a potential two-person succession race. Morgan Stanley has been without a president since Colm Kelleher, Gorman’s previous No. 2, stepped down in June 2019.
The moves come days after fellow investment bank JPMorgan Chase promoted former consumer-lending chief Marianne Lake and former CFO Jennifer Piepszak to roles co-leading the company’s consumer and community banking unit. Concurrently, the bank announced Gordon Smith, one of JPMorgan’s two co-presidents, would retire at the end of the year.

Dive Insight:

Aside from naming co-presidents, Gorman tapped investment management chief Dan Simkowitz to become Morgan Stanley’s co-head of strategy, alongside Saperstein. Gorman also named CFO Jon Pruzan as the bank’s chief operating officer. Investor relations chief Sharon Yeshaya will succeed Pruzan as CFO. All appointments take effect June 1, The Wall Street Journal reported.

“These changes represent the next evolution of leadership to ensure we have the right management in place to lead this firm in future decades,” Gorman told shareholders Thursday at the bank’s annual general meeting, according to the Financial Times.

Although Thursday’s moves start the clock on a race for Morgan Stanley’s top role, Gorman has told the bank’s board he intends to remain CEO for at least three more years, a person familiar with the matter said. However, Gorman, who has held the top spot since 2010, said now “feels like the right time to more formally set up a transition over the next few years.”

“You make these changes when you can and from a position of strength,” Gorman told Bloomberg.

By all accounts, Morgan Stanley is coming off a strong year — one in which it announced two deals worth a combined $20 billion: first, buying brokerage firm E*Trade for $13 billion in stock, and then acquiring investment management firm Eaton Vance for $7 billion. The latter transaction nearly doubled Morgan Stanley’s assets under management, pushing them well past $1 trillion.

With the promotion, Pick, 52, will continue to run Morgan Stanley’s institutional securities business — which focuses on investment banking, corporate lending, sales and trading — and will lead international operations. Pick is credited with rebuilding the bank’s equities business after the 2007-08 financial crisis and later revamped Morgan Stanley’s fixed-income division, according to Bloomberg.

Saperstein, 54, worked alongside Gorman on a pivot to make wealth management central to Morgan Stanley’s post-crisis business model. E*Trade will now fall under the wealth management channels he supervises, the Financial Times reported.