[ad_1]
This week saw an unusually smooth run for a Wall Street bank, as Morgan Stanley’s new CEO, Ted Pick, took on a new role following the departure of outgoing James Gorman. This is the week when the transfer of the team reaches its climax.
The decision, announced in May, was hailed as an exemplary transition, as it caused little internal turmoil and avoided the infighting that often accompanies corporate succession. Mr. Pick took over from Mr. Gorman on New Year’s Day, and Mr. Gorman remained executive chairman.
“I don’t want to be CEO anymore,” Gorman said. financial times. “I loved it. I loved every bit of it. I’ve been doing it for 14 years and I’ve had enough.”
Gorman is already adjusting to his new, scaled-down role. As CEO, he would create a handwritten list of priorities for the next 12 months at the beginning of each year. In an interview with Bloomberg earlier this week, when asked how that list would change now that he is executive chairman and no longer oversees Morgan Stanley’s day-to-day operations, Gorman said, “I’m not writing this list this year. ” he answered.
Although Gorman will no longer be CEO, he has been appointed to Disney’s board of directors and will continue to hold top corporate positions in addition to his role as Morgan Stanley’s executive chairman. In that role, Gorman could help Disney ultimately find a successor to CEO Bob Iger. Disney has struggled with that effort in recent years, and Iger will return as CEO for a second time in November 2022 following the failure of his successor, Bob Chapek.
Gorman announced his intention to resign in May, saying he would resign within the next 12 months. Morgan Stanley announced in October that Mr. Pick, then a co-president, would replace Mr. Gorman early this year.
During his nearly decade-and-a-half tenure, Mr. Gorman made Morgan Stanley the envy of Wall Street. The bank overcame the uncertainty and public distrust caused by the 2008 financial crisis to outperform nearly all of its European competitors, including Credit Suisse, Barclays and Deutsche Bank, and diversified into trading and investment banking. In order to achieve this goal, the company made several large-scale acquisitions.
Since Gorman was appointed in January 2010, Morgan Stanley’s stock price has more than tripled from about $30 to $92.39 as of Thursday. The bank’s annual net revenue also jumped from $16.4 billion in Mr. Gorman’s first year to $53.7 billion in 2022, the last full year of financial information available.
in him financial times Gorman gave Morgan Stanley’s tenure as CEO an “A–” grade in an interview. He told the paper in December that going higher would be “unscrupulous” and going lower would be “false modesty”.
Much of Morgan Stanley’s new growth can be attributed to Mr. Gorman’s early efforts to expand the bank’s wealth and wealth management business, which had previously taken a backseat to its core banking and trading operations. He continues to believe that assets and asset management are essential to growing Morgan Stanley internationally.
“There are a lot of wealthy people in the world,” he said in an interview with Bloomberg.
Gorman exuded confidence as he reflected on his time at Morgan Stanley.
“It may sound unscrupulous, but I don’t think we made a huge mistake,” he told Bloomberg.
However, under his watch, Morgan Stanley was investigated by regulators and had to pay several large fines. The biggest one came in 2022, when the bank agreed to pay $200 million to U.S. regulators for allegedly engaging in improper record-keeping when some employees discussed transactions outside of authorized communication channels. That was when I did it. Just a month later, the SEC fined Morgan Stanley again as part of his $35 million settlement for failing to adequately protect the data of 15 million customers.
Additionally, Morgan Stanley suffered a loss of $911 million after the Archegos Capital Management family office failed to cover a series of margin calls and went bankrupt, triggering a fire sale. Morgan Stanley realized that Archegos was on the verge of collapse and had to sell a block of its shares at a loss to reduce the damage to its own balance sheet. And like many investors, the bank suffered hundreds of millions of dollars in losses on commercial real estate loans in the aftermath of the pandemic.
Instead, Gorman prefers to focus on wins, citing acquisitions that have enabled the bank to advance its asset management and asset management capabilities. Morgan Stanley acquired brokerage app E-Trade for $13 billion in February 2020, just weeks before the pandemic hit the United States. “I think they’re jealous,” Gorman said of other Wall Street banks that missed out on the deal. Undeterred by the pandemic, Gorman continued his shopping spree in October 2020, acquiring investment firm Eaton Vance for $7 billion.
“I felt at the time that I had to act, and I had to be proactive,” he said of his early days as CEO and turnaround plan. “And we knew that no matter what we did, there would be critics. It didn’t bother me one bit.”
Despite making many successful business decisions, Morgan Stanley has suffered some setbacks during Mr. Gorman’s 14-year tenure. Morgan Stanley lost about $911 million after its family office, Archegos Capital Management, failed to cover a series of margin calls and went bankrupt, triggering a fire sale. And like many investors, the company faced significant losses on one of its office real estate assets in the aftermath of the pandemic.
[ad_2]
Source link
