Morgan Stanley’s long-serving CEO James Gorman is stepping down within a year
Why It Matters: A dose of uncertainty at a stable bank.
Mr. Gorman took over the bank in 2010, after Morgan Stanley nearly collapsed during the previous financial crisis. His time as chief executive was marked by stability, at least by the boom-and-bust norms of investment banks. Morgan Stanley has avoided the consumer banking weaknesses of its rival Goldman Sachs and stuck to its job to earn billions of dollars from its advisory work to corporations and high net worth individuals, including Elon Musk.
But like its rivals, Morgan Stanley has recently come under pressure from a downturn in its much-needed work helping companies go public, merge and acquire others.
As a sign of its financial health, Morgan Stanley was one of several banks to bring in billions of dollars in what ultimately turned out to be a failed attempt to rescue ailing mid-market lender First Republic. Morgan Stanley has since hired some of that fallen bank’s advisors, bolstering its already enviable asset management business, formerly called Morgan Stanley Smith Barney.
On Friday, Mr Gorman said: “In my view, we are not in a banking crisis, but we have had a crisis and may continue to have it with certain banks.”
Background: An ‘invisible’ hand on Wall Street.
Born in Australia, Mr. Gorman worked at the consulting firm of McKinsey & Company before becoming a banker.
Unlike Jamie Dimon at JPMorgan Chase, the only major bank chief with a longer tenure, Mr. Gorman has maintained a muted public presence. “I’m pretty invisible, and that’s fine,” he told The New York Times in 2014.
Mr. Gorman is one of the highest paid CEOs of publicly traded companies on Wall Street, earning $31 million in 2022.
Mr. Dimon is 67 and there are no indications that he will step down anytime soon. Mr Gorman, 64, is likely to leave at the same age as his predecessor, John Mack, who left at 65.
What’s Next: A business succession race.
Neither Mr. Gorman nor Morgan Stanley gave an exact date for his departure from the CEO position. Mr Gorman said he expected to move to the position of executive chairman “for a period of time” after his resignation.
Echoing what he has said publicly, Mr Gorman noted on Friday that there were three “very strong” unnamed internal candidates to take over.
In tipping his departure without naming the bank’s next CEO, Mr Gorman said he was aware of the television series “Succession,” which tells the story of intense corporate power struggles for years.
Referring to the drama surrounding the show’s late patriarch, Morgan Stanley’s chief said he “had no plans to go out like Logan Roy.”