Why it matters: A stable bank has some uncertainty.
Gorman took over the bank in 2010 after Morgan Stanley nearly collapsed during the last financial crisis. His tenure as chief executive was characterized by stability, at least by the standards of investment-bank booms and busts. Morgan Stanley has shunned the consumer-finance weaknesses of rival Goldman Sachs and stuck to its multibillion-dollar business advising businesses and wealthy individuals, including Elon Musk.
But like its rivals, Morgan Stanley has recently been hit hard by a downturn in its core business of helping companies go public and in mergers and acquisitions.
Morgan Stanley was one of the banks that plowed billions of dollars as a testament to its financial health, but ultimately failed in its attempt to bail out struggling mid-market financier First Republic. rice field. Morgan Stanley has since hired several failed bank advisors to bolster its already coveted wealth management business, formerly known as Morgan Stanley Smith Barney.
“In my view, we are not in a banking crisis, but we have had and may continue to have crises in some banks,” Gorman said on Friday.
Background: Wall Street’s “invisible” hand.
Australian-born Gorman worked for the consulting firm McKinsey & Company before becoming a banker.
Unlike JPMorgan Chase & Co.’s Jamie Dimon, Mr. Gorman, who is the only person with the longest tenure as head of a major bank, has kept his public presence low. “I’m a pretty low profile person, and that’s okay,” he told The New York Times in 2014.
Gorman is one of Wall Street’s highest paid publicly traded CEOs, with an annual salary of $31 million in 2022.
Dimon, 67, shows no signs of stepping down anytime soon. Gorman, 64, is likely to retire at the same age as his predecessor, John Mack, who retired at 65.
What’s next: the corporate succession race.
Neither Gorman nor Morgan Stanley have given an exact date when they will step down as CEOs. Gorman said he will serve as executive chairman for a “limited period” after his retirement.
Gorman echoed earlier public statements on Friday, saying he had three “very strong” unnamed internal candidates to replace him.
In suggesting he will step down without naming the bank’s next chief executive, Gorman is referring to the TV series “Succession,” which has told the story of deadly corporate power struggles for years. said.
Addressing the drama surrounding the show’s deceased patriarch, Morgan Stanley’s chief executive said, “We have no plans to go out like Logan Roy.”
