(Bloomberg) — James Gorman will step down from his role as chairman of Morgan Stanley at the end of the year, ending a nearly two-decade run at the firm he rescued from the brink of failure and turned it into a wealth management powerhouse.
Gorman, 65, unveiled his plan Thursday at the company's annual shareholder meeting. No replacement was immediately named, although chief executive Ted Pick is expected to take over eventually.
The decision to resign after relinquishing the role of CEO in January seen as a vote of confidence in Pick's leadership. When Gorman first rose to the top of the then-firm in 2010, his predecessor, John Mack, stayed on for two years as chairman before Gorman consolidated his holdings in the company.
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Gorman did a rare Wall Street thing last year — choosing a successor while convincing losing candidates to stay anyway. The former executive of McKinsey & Co. has been public telegraphing his timeline for relinquishing his duties and previously had Signaling he will vacate his position as chairman by the end of this year.
The Australian-born banker jumped ship from Merrill Lynch in 2006 to help revamp Morgan Stanley's wealth management business. By the time he became CEO, the firm was scarred by the financial crisis, which nearly put it out of business. Gorman engineered an investment banking revival and turbo-charged a money management operation that now oversees $7 trillion.
Pick, 55, needs to convince investors that the company still has a promising growth story ahead of it. While Morgan Stanley shares have advanced 8% this year, the gain is by far the weakest among the biggest US banks.
Investors have been cautious about the firm's ability to continue to post strong results in its wealth management arm, and the investment bank has been giving way to arch-rival Goldman Sachs Group Inc. Pick is committed to continuing to deliver on Morgan Stanley's goals in the wealth business while unlocking additional profits in investment banking.
“I think we're at the beginning of a multi-year M&A cycle,” he said in April on the company's earnings call. “I feel good that this is the beginning to the middle of the cycle for the classic business of investment banking and capital markets around the world.”