Yahoo Finance Morgan Stanley elevates insider Ted Pick as CEO, ending race to succeed James Gorman
Longtime Morgan Stanley (MS) insider Ted Pick will succeed James Gorman as CEO on Jan. 1, ending a widely-watched succession race inside one of the biggest firms on Wall Street.
The 54-year-old Pick is a 33-year veteran of Morgan Stanley who currently leads the company's institutional securities division, which oversees investment banking and trading. He previously was global head of sales and trading, where he led a turnaround in the fixed-income trading division.
Andy Saperstein and Dan Simkowitz, two other Morgan Stanley executives considered to be in the running for the job, were also given new titles and responsibilities.
Saperstein, who had been co-president alongside Pick, will keep his co-president title and also become head of wealth and investment management. Simkowitz will also get a co-president title and become the head of institutional securities. Gorman, 65, will become executive chairman.
The transition brings to an end the tenure of one of the longest-serving CEOs on Wall Street. Gorman took over in 2010 as the firm faced questions about its survival in the aftermath of the 2008 financial crisis.
He then made an aggressive push into wealth management as a way of smoothing out the volatility from trading and investment banking.
Since Gorman became CEO Morgan Stanley's stock has climbed 141%, outperforming all its peers outside of JPMorgan Chase (JPM).
"For several years I have worked with the board to ensure an orderly succession, and I feel strongly that now is the time to step aside," Gorman said in a press release Wednesday.
"The board’s selection of Ted Pick is an outstanding one. He is battle-tested, understands complex risk, and works very effectively not just in the US, but around the globe."
Tom Glocer, Morgan Stanley's lead director, said in the release that the board determined "unanimously" that Pick was the right choice.
"Ted is a strategic leader with a strong track record of building and growing our client franchise, developing and retaining talent, allocating capital with sound risk management, and carrying forward our culture and values," Glocer said.
Gorman announced in May that he planned to step down as CEO within the next year, saying the expectation was that it "will occur at some point in the next 12 months." Only JPMorgan's Jamie Dimon, who took over in 2005, can claim a longer run at the top. Bank of America's Brian Moynihan also started as CEO in 2010.
Back in May Gorman said that the board had identified "three very strong senior internal candidates for consideration" and joked that "I definitely have no plans to go out like Logan Roy," the fictional character on the HBO show "Succession" who died before naming a successor.
Wednesday’s announcement about Pick comes one week after Morgan Stanley said its third-quarter profits dropped 9% from a year ago as revenue from investment banking and trading fell.
The result offered another sign of persistent struggles on Wall Street despite lots of talk last summer of "green shoots" in mergers, acquisitions, and IPOs.
Investors signaled their disappointment, sending the firm's stock down roughly 7%. That was its largest single-day drop in more than three years.
Morgan Stanley's third quarter earnings result ranked near the bottom of the big banks. Its drop in profit was smaller than the 33% decline at rival Goldman Sachs (GS) but it trailed profit jumps reported by JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C).
The biggest third-quarter drop in investment banking revenue belonged to Morgan Stanley (MS), falling 27%.
On Wednesday night, after Morgan Stanley announced the new CEO, the firm's stock was flat.
David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto.
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