Yahoo Finance Morgan Stanley CEO Gorman to step down within the next year
Morgan Stanley (MS) CEO James Gorman said Friday he plans to step down from his role leading the firm within the next year.
"The specific timing of the CEO transition has not been determined, but it is the board's and my expectation that it will occur at some point in the next 12 months," Gorman said during the bank's annual shareholder meeting. Gorman has led the Wall Street bank for the past 13 years.
Gorman said he will assume the role of executive chairman. Morgan Stanley declined to comment further beyond Gorman's remarks.
"The board has identified three very strong senior internal candidates for consideration as the next CEO," Gorman added.
Offering a more light-hearted take on his impending departure, Gorman added: "I definitely have no plans to go out like Logan Roy." Morgan Stanley shares were down about 1.2% following the news.
Since the beginning of Gorman's tenure, Morgan Stanley shares have gained more than 180%, outpaced by the S&P 500's roughly 270% gain over that period, but far exceeding the 80% gain seen in the KBW Bank Index over the same period.
In Morgan Stanley's proxy statement, Gorman said the bank has a comprehensive succession plan in place and "fully expects" the new CEO to be picked from a list of internal candidates.
Gorman joined Morgan Stanley in 2006 as chief operating officer of the bank's global wealth management group. In 2009, he helped create the country's largest wealth management business by spearheading the partial purchase of Smith Barney from a cash-strapped Citigroup.
Under Gorman's leadership during 2020, Morgan Stanley acquired online trading platform E*Trade and investment management firm Eaton Vance. The year awarded Gorman a 22% raise, making him the highest paid US executive that year.
"In my now long career, I've seen a lot of environments some challenging, some not," said Gorman on the call.
"The world will certainly get through this period of high rate increases to tackle inflation, and obviously the slowing down of economies around the world for a period of time but I remain extraordinarily optimistic about the future Morgan Stanley and our broader economy, whatever the next several months brings," Gorman added.
More changes across Wall Street
Another Wall Street investment chief, Lazard's Ken Jacobs, is also reportedly stepping down from his role, according to Bloomberg.
Gorman and Lazard, both 64 years old, took over as CEO of their companies around the end of 2009, making them both longtime Wall Street veterans, rivaled in tenure only by the likes of JPMorgan's CEO Jamie Dimon, 67, who assumed his role in 2005.
Succession plans from the two investment banks come during a slow moment for dealmaking on Wall Street. Under rapid interest rate increases and the more recent turmoil in the US banking sector this year, major US banks reported declining investment banking fees in the first quarter.
Morgan Stanley posted a 24% drop from the year ago period while Lazard saw a more surprising 29% decline. Lazard also announced a 10% workforce reduction.
David Hollerith is a senior reporter at Yahoo Finance. Follow him on Twitter at @DsHollers
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