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Morgan Stanley CEO James Gorman to step down in the next year

Yahoo Finance Live breaks down the news of Morgan Stanley CEO James Gorman's plans to step down as within the next year, featuring comments from ProShares Global Investment Strategist Simeon Hyman.

Video transcript

JULIA HYMAN: Breaking news this morning in the banking sector, Morgan Stanley CEO James Gorman said he is stepping down from the leadership within the next year. Gorman making the announcement at Morgan Stanley's annual shareholder meeting this morning. The battle to become his replacement is on. Gorman says Morgan Stanley's board has identified three possible candidates for the role. He's going to stay on as executive chairman for a time after the new CEO takes over.

Gorman has been CEO since 2010. That makes him one of the longest running US Bank CEOs. He is by the way 64 years old. But this, to me, raises-- this is a bit of a surprise, I think. And Simeon, I want to bring you into this, as well.

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If you think about the heads of the largest banks in the US, you think about a Jamie Dimon, you think about a Brian Moynihan. A lot of these guys-- Jane Fraser is newer in her role, but a lot of these guys have been there for a long time. So you wonder when we are going to see a more wholesale rollover within that sector.

BRAD SMITH: Jamie Dimon was at the head of JP Morgan when I was interning there back in college, way back when. But yeah, the transition plans that we're looking at here-- and we had even had, a couple of years back, a major transition, and even a fighting for the top role at Goldman Sachs, as well, which netted in David Solomon being selected for that position. But again, this is someone who's been there since 2010.

SIMEON HYMAN: The benches are deep. We know the benches are deep. And so the biggest challenge in a transition is, of that deep bench, who do you have to lose when somebody wins. So to me, that's more of an issue than the ability to pick someone who's going to be a great steward, it's if you lose a couple of people who lose out in that race and go to a private equity firm or whatever, how do you make sure that the bench of the bench is there to step in.

JULIA HYMAN: Yeah, that's a really good point. Well, going to keep watching that. Morgan Stanley shares not a huge amount of change in those on this announcement.