The hunt for Wall Street's next top CEO is intensifying. Recently, 65-year-old Morgan Stanley CEO James Gorman shared his plans to identify an appropriate successor within the next year.
While this may seem like a typical leadership transition for Morgan Stanley, what stands out is Gorman's distinct vision for the process. Gorman hopes for a smooth contest, in contrast to Wall Street's norm, where losers typically depart, leading to substantial personnel changes. Gorman mentioned last month that Wall Street has never experienced a contest like the one he envisions, adding that he's ready to challenge that tradition.
Wall Street Tradition: Internal Feuds Over the CEO Position
Gorman has good reason to rethink this tradition. Not long before his 2006 appointment, Morgan Stanley was mired in internal strife. Now, the firm wants to preserve its market valuation, which many rivals envy.
However, Gorman's approach is certainly bold on Wall Street. Some market observers worry that even if the transition is amicable, future friction among the candidates might disrupt the firm. Maintaining the current team cohesion will be no easy task.
Goldman Sachs provides a cautionary tale. Since David Solomon assumed the CEO role, there's been growing discontent within the firm. Long-standing CEOs like JPMorgan's Jamie Dimon and Bank of America's Brian Moynihan have been tight-lipped about their succession plans, refraining from naming heirs to the CEO throne.
At Morgan Stanley, internal strife led to the ousting of CEO Philip Purcell in 2005.
Who Are the Contenders for Morgan Stanley's Top Spot?
Three prominent figures are in the running for Morgan Stanley's next CEO: Ted Pick, 54, overseeing higher-risk institutional business; Andy Saperstein, 56, in charge of wealth management; and Daniel Simkowitz, 58, heading asset management. Notably, Simkowitz is the only one with experience in both institutional and wealth management.
Insiders at Morgan Stanley know that these three contenders often dine together and seem to genuinely enjoy each other's company. Many employees, however, believe this camaraderie might be a calculated display of harmony.
Pick has long been viewed as the front-runner. Yet, federal inquiries into his division's handling of bulk trades have raised concerns about potential hurdles in his path to CEO. Simkowitz, although an underdog, has garnered attention. Many senior company officials note his significant role in past dealings with the U.S. Treasury and regulatory bodies.
Despite the outwardly cordial dynamic among the trio, some Morgan Stanley insiders mention that two of the candidates privately fear they might not be close enough to clinching the win. They are reluctant to lose their influence within the firm under another's leadership.
Addressing the three contenders, Gorman has been methodically and somewhat publicly consulting with colleagues. He's spoken about the unique strengths and irreplaceable qualities of each candidate. This approach may help Morgan Stanley retain the two non-selected candidates post-decision.
