Morgan Stanley chooses Ted Pick to replace James Gorman as CEO

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Morgan Stanley has named Ted Pick as its new chief executive, replacing James Gorman who will bow out from the role after leading the Wall Street bank for nearly 14 years and transforming it into a wealth management behemoth. 

Pick, who was seen as the frontrunner for the job, will start the role on January 1. His appointment comes months after Gorman announced plans to step aside. Pick runs investment banking and trading for Morgan Stanley and was one of three leading internal candidates for the job alongside Andy Saperstein and Dan Simkowitz. 

“We had an embarrassment of riches. We had three incredibly talented executives,” Gorman told the Financial Times. “Ted’s had 30 years at Morgan Stanley . . . and he never disappointed.”

In a nod to efforts to retain the other candidates, Saperstein will take over Morgan Stanley’s asset management division in addition to his role running wealth management. Simkowitz, who was running asset management, will take Pick’s job running trading and the investment bank. 

Simkowitz will also become co-president with Saperstein, Morgan Stanley said on Wednesday. Gorman will become executive chair of the board of directors.

Tom Glocer, Morgan Stanley’s lead director, said in a statement that the decision by the board of directors to appoint Pick was unanimous.

Pick told the FT that his appointment was “not a change in strategy”.

“We have a first-class team that will take the next chapter, which is continuing to do what we’ve been doing with clients and continuing to grow the company,” Pick said.

Christian Bolu, banking analyst at Autonomous Research, said the appointment “makes sense” given that Pick oversees the bank’s trading and investment banking businesses, its most complex and riskiest activities.

“The risk was always that you would lose him if he didn’t get the job, and that that would have been a clear negative,” Bolu said.

Pick will inherit a vastly changed bank from the one Gorman took over from John Mack in 2010, less than two years after Morgan Stanley almost failed during the 2008 financial crisis. 

Gorman revamped Morgan Stanley to focus on wealth and asset management, and crystallised his pivot with quick-fire deals for online trading platform ETrade and asset manager Eaton Vance.

The bank has about $6tn in assets under management with a target of eventually reaching $10tn. Gorman has talked up Morgan Stanley’s chances of reaching $20tn. 

The strategy has helped Morgan Stanley’s market capitalisation eclipse that of longtime investment banking rival Goldman Sachs, which was less quick to diversify its business. 

But even as Morgan Stanley’s transformation has been cheered by investors, its legacy investment banking business, which gives its brand added prestige, has lagged JPMorgan Chase and Goldman in league tables. 

And it has faced a highly publicised investigation by the Securities and Exchange Commission and the US attorney’s office in Manhattan over its handling of block trades — a way to sell bulk volumes of stock — in what amounted to the most significant legal probes it has faced in recent years. Morgan Stanley said in May it was in talks about settling the case.