James Gorman, the Morgan Stanley CEO since 2010, is planning to step down within the next 12 months, he said at the company’s annual shareholders meeting today (May 19). He will continue in his role as executive chairman following his departure.
“We believe this structure will ensure the continued stability of Morgan Stanley while at the same time positioning it for a decade of exciting growth under new leadership,” he said at the meeting. The company’s stock fell 2 percent following the announcement, now trading at $82.72 per share.
Gorman, 64, assumed the chief executive position at a critical time for Morgan Stanley. In the wake of the 2008 financial crisis, Gorman helped rebuild the company after it came close to collapse. Morgan Stanley is now one of the biggest financial services companies in the world, with $1.2 trillion in assets under management and $53.7 billion in revenue last year, according to company financial documents. Gorman is one of the highest-paid banking executives in the U.S., having earned $39.4 million last year.
Ted Pick, Andy Saperstein and Dan Simkowitz are likely successors, according to Bloomberg. Pick and Saperstein are co-presidents of the firm. Pick manages the Institutional Securities Group, which offers services like investment banking and corporate lending. Saperstein, who joined the firm in 2006, heads the wealth management business, which includes financial advising and stock trading. Simkowitz is working as head of investment management and co-head of corporate strategy. Both Pick and Simkowitz began working at the firm in 1990.
What did Gorman accomplish as CEO?
During Gorman’s tenure, Morgan Stanley made a series of strategic acquisitions. In 2020, it bought E-Trade, an electronic trading platform valued at $13 billion. The deal represented the biggest banking acquisition since the 2008 financial crisis and introduced Morgan Stanley to a new type of clientele, according to the Wall Street Journal. The company also acquired Eaton Vance, a Boston-based investment management firm, and Solium Capital, which offered software that managed employees’ stock options.
Two years into Gorman working as chief executive, the company launched its Investing with Impact platform, which intends to help clients invest in companies that align with their own environmental, economic and social values. It followed that launch by creating an Institute for Sustainable Investing to offer more ESG-focused investment options. In 2017, it built the Multicultural Client Strategy Group, later renamed the Inclusive Ventures Group, which provides capital and other resources to entrepreneurs that have often been overlooked by the banking industry, including women and people of color.
James Gorman before becoming CEO of Morgan Stanley
Gorman began his career practicing law in Australia before attending Columbia Business School in New York. After earning his master’s degree in 1987, Gorman joined consulting firm McKinsey & Company where he became a senior partner. He worked on McKinsey’s account for Merrill Lynch, an investment management firm now owned by Bank of America, for a decade, helping develop its internet strategy in the late 1990s. He joined Merrill Lynch in 1999 as chief marketing officer. Within two years, he was in charge of the company’s brokerage business.
In 2006, Gorman joined Morgan Stanley as president and chief operating officer of the company’s wealth management group, which addresses the needs of the firm’s wealthiest clients. By the next year, he had been named co-president of the company alongside Walid Chammah, the investment banking head who had been with the firm since 1993. In 2009, he led the acquisition of Citigroup’s Smith Barney, a retail brokerage business. The move created the largest wealth management business by client assets in the U.S. under Morgan Stanley, with $1.7 trillion in assets.
Later that year, the board announced Gorman would become CEO at the start of 2010. He added the position of chairman in 2012.