Morgan Stanley (MS) CEO James Gorman, who has guided the bank more than a decade and lead its wealth management transformation with a string of high-profile acquisitions, will transition to the role of executive chairman over the next year, he told shareholders at their annual meeting in New York Friday.
The bank's board had identified three potential candidates to replace him, Gorman told investors, with reports suggesting investment management boss Dan Simkowitz and co presidents Andy Saperstein and Ted Pick are the likely front-runners.
Gorman, 64, was named CEO in January of 2010 and has overseen one of the most significant banking transitions on Wall Street following the global financial crisis, shifting Morgan Stanley's focus from traditional trading and investment banking to wealth management and high net-worth client advisory.
He also lead the march in Morgan Stanley's broader diversification, including deals to buy online brokerage firm E*Trade and discount investment adviser Smith Barney.
Morgan Stanley shares were marked 1.95% lower in early Friday trading following news of his transition to change hands at $82.85 each. The stock has risen more than 178% under Gorman's tenure, compared to an 85% gain for the Dow Jones U.S. Banks Index benchmark.
Last month, Morgan Stanley posted better-than-expected first quarter earnings of $1.70 per share, thanks in part to an 11% surge in wealth management revenues, which offset a slump in dealmaking fees that clipped 2% from the bank's overall revenues.
Wealth management also added around $110 billion in net new assets over the first three months of the year, taking its overall total to just under $5 trillion - around half the $10 billion target Gorman sees the bank achieving over the next few years.
"This $10 trillion target is for real," Gorman told investors on April 19. "And starting off with $110 million, I think we have pretty good visibility to net new money."
