Morgan Stanley has chosen Ted Pick as its new chief executive, replacing James Gorman after 14 years at the helm reshaping the US bank.
The bank said in a statement on Wednesday that Peake, a co-president and three-decade veteran of the company, will be promoted to the top job and join the board of directors in January. Gorman, 65, will remain executive chairman.
In conquering Pick, 54, the company was turn The man is credited with driving a resurgence in Morgan Stanley’s trading business after a perilous period when clients deserted the bank during the 2008 financial crisis and Wall Street cast doubt on the bank’s viability.
Australian-born Gorman was an unlikely choice for chief executive, rescuing the bank from near collapse and orchestrating a multi-year transformation centered on wealth management. Two landmark deals announced in 2020 accelerated the strategic overhaul, turning Morgan Stanley into a money management giant on a fast track to its $10 trillion target and boosting its market value above that of archrival Goldman Sachs Group Inc.).
“The board’s selection of Ted Peake is an outstanding choice,” Gorman said in a statement. “He is battle-hardened, understands complex risks, and works extremely effectively not just in the United States but around the world. Simply put, he is an outstanding executive and leader.”
Peake beat out two other contenders, co-president Andy Saperstein and Dan Simkowitz, who oversees investment management. Morgan Stanley said on Wednesday that Saperstein will serve as head of wealth and investment management and named Simkowitz co-president and head of institutional securities.
“Morgan Stanley is a storied institution and I am honored to be chosen to lead it,” Peake said in a statement. “Thanks to James’ outstanding leadership, our firm is now well-positioned to succeed throughout market cycles, I’m excited about the growth opportunities ahead.”
The succession saga at the New York-based bank has been unfolding methodically and somewhat publicly since the departure of Gorman’s top deputy, Colm Kelleher, in 2019.Soon after, Gorman unveiling It’s the biggest leadership shakeup in a decade, positioning a small group of deputies as his most likely successors. One of them, Jon Pruzan, left earlier this year to serve as president of Pretium, Don Mullen’s investment firm.
Goldman explain In May, he planned to resign within a year, starting a final three-man race. Peake is considered Gorman’s most likely successor because he oversees the more complex institutional securities business – which until recently was the more dominant unit. But the wealth management unit has gained a larger share of revenue through the bank’s recent acquisitions, helping to boost the prospects of Saperstein, the unit’s head.
“As co-presidents of Morgan Stanley, Andy and Dan will be valuable leaders in helping Ted manage the company,” Gorman said.
Gorman insists that the next CEO doesn’t necessarily have to run the biggest business. “A lot of people focus on the business you run and whether it’s done well,” he said earlier this year. “Well, if that was the standard, I wouldn’t have gotten the job because I was running the smallest, worst-performing business.”
colorful vocabulary
Once known for his colorful vocabulary, Peake made Morgan Stanley his lifelong home, save for a spell in business school. He got off to a rocky start – as the last person hired into the analyst class – and his promotion was tied to his role as a capital markets banker, helping companies raise money through stock sales. But this situation changed after 2008.
Then, as the bank was hemorrhaging clients, he was tapped to lead the equities division. Under Peak’s leadership, the division went from faltering to healthy and even leapfrogged its competition to reach No. 1. After his success in the stock market, he faced another challenge: reviving the fixed-income unit, the bank’s long-sick child that has struggled to keep pace with larger rivals. The unit’s recovery has since been hailed as a success story by the bank’s leadership.
But the trading business also suffered some black eyes. The prime brokerage unit that Peake helped build into Morgan Stanley’s crown jewel was caught off guard when Bill Hwang’s Archegos Capital Management collapsed in 2021. The revelation that Morgan Stanley lost $911 million in transactions with family offices made it the biggest loser in the U.S. banking industry in the disaster.The bank also pays recently disclosed The company is in talks with U.S. prosecutors to resolve an investigation into its block trading practices – a business that fell under Peake’s command.
cede territory
Peake’s more immediate challenge will be regaining market share in the investment bank after losing it to Goldman Sachs and JPMorgan Chase.
The company is waiting for a rebound in capital markets and trading activity to help profits in the business recover from depressed levels. Meanwhile, investors who have been raving about its wealth unit are now seeking assurances that it can continue to amass assets at a rapid pace.
Peake will be able to lean on Gorman, who said he hopes to help with the transition but did not specify how long he plans to remain chairman. When Gorman was named CEO in 2010, his predecessor, John Mack, served as chairman for two years before handing that title over to Gorman as well.
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