Morgan Stanley (MS) has finally named a successor to longtime CEO James Gorman — removing a big question mark for investors like us. Ted Pick, a 33-year banking vet who has served as co-president of Morgan Stanley for the last two years, will succeed Gorman on Jan. 1, according to Wednesday’s announcement . Pick was previously the head of equity capital markets and global head of sales and trading. During Thursday’s Morning Meeting , Jim Cramer described Pick’s ascension to the top job as terrific, because “it removes an uncertainty” for the firm at a time of macroeconomic and geopolitical challenges and allows for in-house continuity during the transition. That’s a good thing since Pick plans to double down on Gorman’s multiyear transition to lean more heavily on wealth management amid muted investment banking demand for initial public offerings and mergers and acquisitions. In the third quarter, however, both segments were soft , leading to a 6.8% decline in shares on Oct. 18, the day of the earnings release. We knew about the IB weakness since initial public offerings and mergers and acquisitions have been dormant for years and only recently perked up. But wealth management was a surprise. Morgan Stanley said it’s still on track to add $1 trillion in net new assets every three years. We believe that goal is still attainable and so does the incoming CEO. “The business strategy is sound. There will be no change in strategy. We know what we are after 15 years of transformation under James’ extraordinary guidance,” Pick told CNBC in an interview. “There are so many opportunities to grow both of them globally. It’s a strategy that’s in place and we’re gonna keep with it.” Gorman, 65, previously forecasted that M & A activity would increase in 2023. He acknowledged on Thursday, sitting next to Pick, that the bank won’t see a bump in revenue until probably the first quarter of next year. “There’s a little bit of a lag, but it’s coming,” explained Gorman, who will stay on as executive chairman for an undisclosed period of time. “That’s the least of my stresses in life.” The 54-year-old Pick emphasized Gorman’s prediction: “There’s no doubt strategic M & A is coming. Three years [of] the pandemic, the war, second war, boardrooms can wait just so long,” he said. “Now, the large-cap M & A cycle is going to begin.” MS YTD mountain Morgan Stanley (MS) year-to-date performance Gorman is ready to hand over the reins after navigating years of uncertainty at the helm of the bank. In 2010, he stepped in as CEO in the wake of the Great Financial Crisis, navigating the firm during a period when it came dangerously close to shuttering. In a bid to stabilize the bank, Gorman built out its wealth management segment, aiming to bring more reliable, recurring revenue streams to offset the weakness in its investment banking business. Morgan Stanley needs a battle-tested exec who can navigate a murky operating environment, and Gorman said Pick fits the bill. “I have worked side by side with Ted since the financial crisis,” Gorman said in a press release. Pick “understands complex risk, and works very effectively not just in the U.S., but around the globe,” the outgoing CEO added. Additionally, the other potential candidates for the CEO role are staying at Morgan Stanley, with the firm avoiding any unnecessary disturbance and furthering a smooth leadership handover. Morgan Stanley co-president Andy Saperstein was named the head of wealth and investment management. Dan Simkowitz will become co-president of the firm and the head of institutional securities. Morgan Stanley shares have dropped about 15% year to date. But the stock has performed better than many of its peers during a tough year for the industry — touched off by the March failure of Silicon Valley Bank. (Jim Cramer’s Charitable Trust is long MS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
iStock Editorial | Getty Images
Morgan Stanley (MS) has finally named a successor to longtime CEO James Gorman — removing a big question mark for investors like us.
Related posts:
businesstelegraph
