James Gorman said on Friday that he planned to step down as Morgan Stanley‘s CEO within the year, sparking a succession race at the top of one of Wall Street’s dominant companies.
The bank’s board has limited its CEO search to three “very strong” internal candidates, Gorman told shareholders at the New York-based company’s annual meeting.
Gorman, 64, will take on the role of executive chairman “for a while” after stepping down as CEO, he said.
“The specific timing of the CEO transition has not been determined, but the board and I expect it to occur at some point in the next 12 months,” Gorman said.
“That is the current expectation absent a major change in the external environment,” he added.
Since taking office in 2010, Gorman has achieved one of the most successful transformations on Wall Street. Through a series of savvy acquisitions, Morgan Stanley has rebounded from a near capsize during the 2008 financial crisis to become a wealth management juggernaut.
The bank began this journey in 2009, when Morgan Stanley purchased Smith Barney from Citigroup plagued by the financial crisis, winning thousands of financial advisors. It then spent more than $20 billion to acquire discount brokerage E-Trade and investment manager Eaton Vance in 2020, adding scale and weight to the bank’s non-trading operations.
As a result, Morgan Stanley became an asset-collecting machine: Gorman said his bank could add about $1 trillion in assets every three years, eventually growing to $10 trillion.
“It’s hard to argue that James Gorman hasn’t been one of the financial services industry’s elite CEOs, picking up the company out of the ‘2008 financial crisis and sharply improving its returns,’ the report said. KBW analyst David Konrad in a research note. .
Investors in the company have rewarded it with one of the best valuations among major banks. Indeed, shareholders prefer the more stable income streams generated by wealth and asset management to the more volatile fees of trading and advisory activities.
Shares of Morgan Stanley tripled during Gorman’s tenure.
Morgan Stanley shares during CEO James Gorman’s tenure.
Internal CEO of Morgan Stanley candidates are the men who lead the three main companiesaccording to people familiar with the situation.
Ted Pick and Andy Saperstein, who lead the bank’s capital markets and wealth management divisions respectively, also served as co-chairs. since 2021. Dan Simkowitz leads the bank’s smallest division, investment management, and was named co-head of strategy in 2021.
The announcement formalizes Gorman’s desire to hand over to another executive. gorman said publicly over the past few years that he had no intention of staying on as CEO much longer, and on Friday he joked that he wouldn’t die holding the title.
Gorman has “no intention of going out as Logan Roy‘, the fictional CEO of HBO’s ‘Succession’ series told investors.