Morgan Stanley chief executive James Gorman will step down as the company’s head within the next 12 months, he said Friday at the bank’s annual shareholder meeting.
“The specific timing of the CEO transition has not been determined, but it is the Board’s and my expectation that it will occur at some point in the next 12 months. That is the current expectation in the absence of a major change in the external environment,” Gorman said Friday.
Gorman, who is one of the longest-serving heads of a US bank, became CEO in January 2010.
He will assume the role of executive chairman for “a period of time” to help Morgan Stanley transition to its next era of leadership, Gorman, 64, said.
The board of directors has three senior internal candidates in the pipeline to potentially take over as the next chief executive.
Gorman also said that he believes Morgan Stanley is well insulated from turmoil in the banking sector after the collapses of three regional lenders.
“In my now long career, I’ve seen a lot of environments. Some challenging, some not. Some crisis, some not,” he said. “I remain extraordinarily optimistic about the future Morgan Stanley and our broader economy.”
Shares of Morgan Stanley were down 2.1% by midday Friday.
Australian-born Gorman succeeded John Mack at the company’s helm after the 2008 financial crisis that saw the company suffer billions of dollars in losses and take hits to its key businesses, including its investment banking and asset management divisions.
Gorman is largely credited with leading a sweeping transformation of Morgan Stanley that saw the bank bulk up its wealth management business and diversify away from risk. Under his leadership, Morgan Stanley acquired two businesses pivotal for this shift, including its $13 billion deal to buy online broker E*Trade in 2020 and its $7 billion purchase of investment manager Eaton Vance, completed in 2021.
Morgan Stanley in 2013 bought Citigroup’s remaining stake of their joint wealth management venture, Smith Barney, after the companies first merged their brokerage divisions in 2009. That business has since been renamed Morgan Stanley Wealth Management.
The firm also launched its Alliance for Children’s Mental Health in 2020, aimed at helping children and young people with their mental health.
“The private sector has both the opportunity and the obligation to do its part in helping ensure young people get the treatment they need and deserve,” Gorman wrote for CNN Business Perspectives in 2020.