James Gorman plans to step down as chief executive of Morgan Stanley within the next year after more than a decade at the top of Wall Street banking, he has become a wealth management juggernaut.
Gorman, 64, told the bank’s annual shareholders’ meeting on Friday that “the precise timing of the CEO transition has not been determined, but it is the board and I expect this to happen at some point in the next 12 months”.
He added that he expected to become executive chairman “for a period of time” after handing over to his successor.
Gorman said Morgan Stanley’s board had “identified three very strong senior internal candidates to consider as the next CEO.”
According to people familiar with the matter, the main succession candidates are co-chairmen Ted Pick and Andy Saperstein, who oversee Morgan Stanley’s institutional securities and wealth management divisions respectively, and Dan Simkowitz, head of the investment management.
Chief operating officer Jonathan Pruzan had been another high-profile candidate to succeed Gorman, but he deceased earlier this year.
Shares of Morgan Stanley were down 0.6% at the start of Wall Street’s session on Friday morning.
Australian-born Gorman replaced John Mack as chief executive in early 2010, after serving as co-chairman of Morgan Stanley in charge of global wealth management, investment management and operations. He became president in 2012.
His appointment 13 years ago underscored Morgan Stanley’s intention to expand into wealth management and diversify away from its former investment banking and trading businesses.
Gorman has doubled down on its wealth and asset management efforts with the acquisitions in recent years of ETrade and Eaton Vance. The bank’s market capitalization tripled under his leadership to around $140 billion.
However, his tenure was not without blemish. The bank is under investigation by US authorities over its block trading activities and said this month it was in talks to settle the matter.
Gorman said shareholders at last year’s investor meeting that he had no imminent plans to leave the bank.
Along with Jamie Dimon at JPMorgan Chase and Brian Moynihan at Bank of America, Gorman is among a group of Wall Street banking chiefs who have resisted a broader orient oneself shorter directorships in corporate America.