“If you’re really unhappy, just leave. I mean, life’s too short.” In 2012, some Morgan Stanley bankers complained following light bonus payouts. That prompted the unsolicited advice from their chief executive, James Gorman. A decade of the CEO lifestyle has, in contrast, suited Gorman just fine.
On Thursday, the investment bank and wealth manager announced the elevation of Ted Pick and Andy Saperstein to co-president, launching an informal bake-off to replace Gorman. The firm’s stock trades at about an all-time high after he successfully reshaped the bank in the wake of the financial crisis. The Australian former McKinsey consultant will not leave soon. There is time for him to take a victory lap as shareholders exult.
Gorman understood that as capital requirements tightened, investors would instead reward a company with stable and steady revenues. Morgan Stanley then acquired the wealth business Smith Barney as well as brokerage ETrade and asset manager Eaton Vance. Nearly 60 per cent of Morgan Stanley revenue is projected to come from these fee-for-service businesses, more than twice the proportion in 2010.