Morgan Stanley ex-CEO James Gorman will step down as the bank’s executive chair at the end of the year, he said Thursday at an annual general meeting.
Gorman moved to the board chair role in January, when Ted Pick took over as CEO. When the succession was announced, Morgan Stanley did not give a time frame for how long Gorman would stay. He indicated to Bloomberg in November that he’d continue as executive chair for no more than a year, and told The Wall Street Journal his job is to support Pick, not to direct him.
“Given this successful transition, it’s appropriate to confirm that I will formally step down as chairman of Morgan Stanley on December 31 of this year,” Gorman said Thursday, according to the Financial Times.
No replacement as board chair was named, but it’s entirely possible Pick could step in. Gorman held the chairman role for all but the first two years of his 14-year tenure as CEO, when his predecessor, John Mack, was chair.
Gorman’s departure after one year as chair could be seen as a show of confidence in Pick. The bank has a wealth of leadership. Morgan Stanley managed to retain Andy Saperstein and Dan Simkowitz, the two executives who lost out to Pick in the CEO race.
The bank paid Saperstein, Simkowitz and Pick each a $20 million one-time staking award. Those bonuses, though, have drawn criticism from proxy adviser Glass Lewis, which urged Morgan Stanley shareholders to reject the bank’s executive compensation package Thursday. The measure received support from roughly 75% of shareholders.
Proxy advisers this year have also largely frowned on banks that, as in Gorman’s time, have consolidated the CEO and chairman roles. Recommendations to separate the posts, though, have failed to take hold this year.
JPMorgan Chase shareholders on Tuesday rejected a measure to split the CEO and chair positions — both held by Jamie Dimon. The proposal received 42.7% support. That surpassed the 33% and 31%, respectively, that similar proposals received this month at Goldman Sachs and Bank of America.
