There will be a change in leadership at Morgan Stanley (ticker: MS) as we enter 2024. The new CEO, Ted Pick, will step into the role on January 1st, taking over from James Gorman, who has held the title since 2010.
Pick, who currently serves as a co-president at the bank, overseeing investment-banking and trading, has been praised by Gorman. The two have worked closely together since the financial crisis, during which Morgan Stanley embarked on a risky turnaround strategy with a focus on wealth management.
Gorman expressed confidence in Pick, stating that he is battle-tested, possesses a deep understanding of complex risk, and is an exceptional executive and leader.
The announcement of Pick’s appointment did not significantly impact the stock price, suggesting that Wall Street had anticipated and is comfortable with this decision. While Pick’s oversight of investment banking coincided with Morgan Stanley’s shift towards wealth management, it is unlikely to result in any significant changes to the bank’s operations.
Morgan Stanley looks towards the future with Ted Pick at the helm, aiming to maintain the bank’s successful momentum while navigating new challenges ahead.
Ted Pick Appointed as CEO of Morgan Stanley
Analyst Kian Abouhossein from J.P. Morgan Securities believes that it is a logical decision to appoint Ted Pick as the CEO of Morgan Stanley. Pick, who has been overseeing the “more complex” investment-banking business, is expected to maintain a similar strategic approach in his new role. Abouhossein emphasizes that the focus will likely be on defending and expanding market shares in various business areas, particularly equities where Morgan Stanley’s growth has halted. Abouhossein rates Morgan Stanley stock as Overweight with a price target of $92.
Despite strong third-quarter earnings, Morgan Stanley experienced one of its worst days in years. Investment-banking revenue declined by 27% compared to the previous year, while its closest competitor, Goldman Sachs Group (GS), witnessed a 1% increase in revenue. Additionally, the bank’s wealth management division, traditionally a source of stability, underperformed and displayed a slowing momentum in net new assets.
Ted Pick’s main responsibility as the new CEO will be to ensure that these results are an isolated incident and not indicative of underlying problems.
Furthermore, Ted Pick’s appointment brings an end to a three-way competition for the role, which intensified after CEO James Gorman announced his plans to step down within the next 12 months. The two other contenders for the CEO position, Andy Saperstein and Dan Simkowitz, will remain with the company but will assume expanded roles. Saperstein, currently a co-president overseeing wealth management, will also take charge of investment management. On the other hand, Simkowitz will become a co-president and head of institutional securities while continuing to serve as the head of investment management and co-head of corporate strategy.
Morgan Stanley Stock Declines in 2021
Morgan Stanley stock has experienced a significant decline of 16% thus far this year, according to the latest data. This drop in stock value has been observed up until Wednesday’s market close.