In CEO race, Morgan Stanley hopes for drama-free handoff
As Morgan Stanley’s James Gorman considers who to put forth to succeed him as CEO, he’s unleashing a summer of speculation inside the bank.
Executives bumping into him on weekends try to tease out which way he’s leaning. Colleagues spend idle moments trading theories. And some have given the boss unsolicited advice, hoping to tip the scales toward their favorite — Ted Pick, Andy Saperstein or Dan Simkowitz.
Gorman, 65, is running Wall Street’s most closely watched horse race, vowing to have his successor in place in less than a year.
But what’s especially striking is Gorman’s other declaration: He wants to defy deeply entrenched norms with a bloodless handoff — in which the rejected finalists stay, avoiding the usual cascade of shakeups and senior departures.
“Wall Street has had a history of that not happening,” Gorman said last month about the task of cajoling the losing executives to stick around. “Frankly, we will challenge that history.”
That’s notable for Morgan Stanley, which was a smoking crater of infighting shortly before Gorman arrived in 2006, and which now hopes to protect a market valuation that’s become the envy of many peers. It’s a daring bet in an industry where fragile egos and raw ambition make for messy handovers, sometimes derailing even the best-performing firms.
Mike Mayo, the skeptic-in-chief among bank analysts, remains unconvinced.
“The road is littered with CEO succession that results in upheaval of those in the upper ranks,” Mayo said. “I just think it’s going to be a challenge to keep the team as cohesive as they currently are.”
Examples abound. Most recently, at archrival Goldman Sachs Group Inc., discontent in the ranks has been rippling through the firm ever since investment banker David
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