Ted Pick: New CEO at Morgan Stanley
Morgan Stanley, the renowned investment bank, has selected its long-standing company veteran, Ted Pick, as the successor to outgoing CEO James Gorman. Gorman, who has been at the helm since 2010 and led the bank through the tumultuous aftermath of the 2008 financial crisis, will now serve as the executive chairman and assist with the transition for up to a year. This change reaffirms Morgan Stanley's commitment to investment banking and wealth management, as reported by Reuters.
Ted Pick, a seasoned professional with over 30 years of experience at Morgan Stanley and currently heading the institutional securities division, has been entrusted with the significant role of CEO. This division includes the bank's investment banking and trading unit. He emerged victorious in a three-way competition against internal candidates Andy Saperstein and Dan Simkowitz.
In an interview, Pick emphasized the bank's enduring commitment to its existing strategy, stating, “We have two great businesses, the strategy is intact, there is a change in leadership but no change in strategy.” Despite this continuity, Pick faces substantial challenges in the investment banking sector. These challenges include recent earnings difficulties, ongoing investigations by US regulators into block trading practices, and the management of relationships with the other CEO contenders.
Andy Saperstein, responsible for wealth management, will continue in his role as co-president and head of wealth while also taking on additional responsibilities overseeing investment management. Simkowitz, the head of investment management, will assume the role of co-president and head of institutional securities.
It's worth noting that the absence of female candidates highlights the existing diversity gap on Wall Street, which is a topic deserving of ongoing attention and discussion.
Before his current role, Ted Pick served as the global head of sales and trading and played a pivotal role in revitalizing the firm's fixed income division, a competence that may prove advantageous in the bank's future endeavors, according to analysts.
Brian Mulberry, a client portfolio manager at Zacks Investment Management, expressed optimism, stating, “The expectation is that the growth of mergers and acquisitions in the next couple of years will be high, and that has been Pick's core competency, so we view it as a good move.” He also emphasized that Pick brings “stability and experience,” qualities that the bank had been lacking during the succession discussions.
James Gorman, the outgoing CEO, had announced his intention to step down within a year in May. Investors had eagerly anticipated the announcement of his successor during the bank's October 18 earnings report, and the lack of a public plan for the new CEO had led to a decline in the stock price, as noted by one analyst.
Gorman clarified that the bank adhered to its predetermined timeline and made the announcement after the October board meeting. This decision was made in October to allow the new CEO to commence their role in January and get a “running start.”
James Gorman's legacy at Morgan Stanley is significant. He joined the company in 2006 and became co-president just a year later. During the 2008 financial crisis, a critical period for Wall Street, he played a prominent role alongside then-CEO John Mack.
In January 2010, he was appointed CEO, a role he held as Brian Moynihan took the helm at Bank of America. Gorman, along with Jamie Dimon of JPMorgan Chase & Co., skillfully guided their respective institutions through the challenges posed by the financial crisis.
Gorman's tenure included notable achievements in 2020, such as the acquisitions of discount brokerage ETrade Financial Corp and Eaton Vance Corp. According to Stephen Biggar, an analyst at Argus Research, “Morgan Stanley is generally in very good shape as left by Gorman.” He added, “Large integrations like ETrade and Eaton Vance are behind it and created some great diversification.”
James Gorman, known for his love of music and dry sense of humor, hails from Australia. He earned his bachelor's and law degrees from the University of Melbourne and obtained an M.B.A. from Columbia University before becoming a US citizen.
Ana Arsov, managing director at Moody's, commended Gorman for his transformation of a traditional investment bank into a dynamic wealth management institution and noted that his succession has been well-planned to facilitate a smooth transition.
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