Morgan Stanley's board is set to deliberate on the selection of the successor to CEO James Gorman in the upcoming summer and fall meetings, following Gorman's announcement last month that he would step down within a year. The deliberation on Gorman's successor will be conducted in meetings to be held in London, New York, and other locations. Three top executives within Morgan Stanley have been identified as potential successors: co-presidents Ted Pick and Andy Saperstein, with a slight edge given to Pick, and Dan Simkowitz, the firm's head of investment management.
In his final year, Gorman is intent on resolving several regulatory matters to ensure his successor begins with a clean slate. Among these are an investigation by the U.S. Securities and Exchange Commission and the U.S. Attorney's Office for the Southern District of New York into the firm's block trading practices, and potential new international regulations that may require banks to hold up to 20% more capital. The recent regulatory stress tests, however, have been favorably clarified, with major banks proving their capacity to withstand a significant economic slump.
Since taking charge in 2010, Gorman has successfully transformed Morgan Stanley into a wealth management giant, aiming to manage $10 trillion in assets. The possible successors have been prepared over a decade to assume leadership, which positions them favorably against external candidates. Ted Pick, in charge of Morgan Stanley's institutional securities group, Andy Saperstein, responsible for the profitable wealth management unit, and Dan Simkowitz, who runs investment management while jointly leading corporate strategy, are all considered strong contenders for the CEO role.
The choice of Gorman's successor holds not just internal but also industry-wide significance. Wall Street succession plans have come under the spotlight as many financial crisis-era leaders' tenures continue, with decisions impacting the broader industry facing a weaker economic outlook, increasing geopolitical tensions, and rapid technological change. The CEO transition at Morgan Stanley coincides with transitions at other firms, such as Lazard, while leaders at JPMorgan Chase and Bank of America have indicated intentions to continue leading their respective institutions.
