9/12/2023 0 Comments Morgan stanley smith barney appPruzan was named chief operating officer in May 2021 and retired from the bank this year. "We spent the last decade strengthening the firm around the safety and soundness principles and cleaning up some of the issues that came out of the crisis and, methodically year after year, improved and got better and were able to take advantage of opportunities that we saw," Jon Pruzan told Insider in an interview in early 2021, when he was Morgan Stanley's CFO. Those early efforts gave Morgan Stanley the financial strength and good standing with regulators to pursue significant acquisitions. Many of the deposits came from high-net-worth clients as the firm used its license to bolster its private-banking operations. It didn't take long before Morgan Stanley began utilizing its new license to acquire clients' deposits, reducing its reliance on wholesale funding. In September 2008, Morgan Stanley's future was preserved when the Federal Reserve allowed it and archrival Goldman Sachs to convert to bank holding companies, which gave them access to emergency funding measures. To understand where Morgan Stanley is now, you need to return to the peak of the financial crisis. "I definitely have no plans to go out like Logan Roy," Gorman said, referring to the lead character of the television show "Succession," who dies without a successor in place.įor a window into how far Gorman has taken Morgan Stanley - and where the bank is going-Insider looks at what he has accomplished since he took the reins in 2010. Still, Gorman's success in growing the bank - revenues have more than doubled since he took over to $66 billion in 2022 - has helped make him Wall Street's highest-paid banking executive with a salary of $39.4 million last year. In 2020, the bank's former chief diversity officer, Marilyn Booker sued over "race and gender discrimination, retaliation and unequal pay." The case was dropped in 2021 in a move that experts said suggested a settlement with the firm. And for more than a year now, regulators have been investigating whether the bank violated securities regulations with its practices around large stock sales. Like other banks, Morgan Stanley let unauthorized messaging via apps like WhatsApp proliferate, resulting in more than $200 million in fines and penalties, as well as the departure of senior executives. Gorman's legacy is not without blemishes. The stock declined 2% on the news while the S&P 500 was flat. "That is the current expectation in the absence of a major change in the external environment. "It is the board's and my expectation that it will occur at some point in the next 12 months," Gorman announced at the bank's annual meeting of shareholders. After 13 years, the 64-year-old CEO on Friday told shareholders that he would step down as CEO in the next year and take on the role of executive chairman. Gorman's days at the helm are now coming to a close. He became the highest-paid Wall Street banking executive over the next two years, and deals for E-Trade, Solium Capital (now known as Shareworks), and Eaton Vance gave the bank an edge earlier than some rivals like Goldman Sachs and JPMorgan, which have sought to grow their own wealth and asset management businesses. Gorman's quip about "jealous" rivals would set the tone for the next few years. He smiled, laughing throughout his response, and said he viewed the cost - a roughly 30% premium to where the online broker's stock had been trading - as reasonable, or roughly "four and a half months of last year's earnings" to buy an "iconic institution." "I think they're jealous," said Gorman, who has led the firm since January 2010, when it would be difficult to find anyone jealous of running a Wall Street bank that had then nearly collapsed in on itself during the financial crisis. What do you tell the people on Wall Street who might believe you are overpaying?" "This is a pretty hefty price tag for E-Trade. "So, $13 billion," the Bloomberg News journalist put to Gorman. Gorman sat down for an in-person TV interview to discuss the deal. It was a chilly day in February 2020, three weeks before the coronavirus would be declared a pandemic. His firm just announced it had hatched a deal to buy E-Trade in what was the largest takeover by a Wall Street bank since the financial crisis. Morgan Stanley CEO James Gorman was giddy. Here's how the 64-year-old Australian has transformed the bank with big bets like E-Trade.He has been at the helm since 2020 and the stock sagged on the news.Morgan Stanley CEO James Gorman said he will step down in the next 12 months.Account icon An icon in the shape of a person's head and shoulders.
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