Barring a screw-up now, Gorman’s tenure will go down as some of the profitable amongst trendy CEOs, and never simply on Wall Road.
It’s onerous to overstate simply what a multitude Morgan Stanley was when he bought the job in 2010. Its inventory had hit an all-time low of $6.71 (there’s a commemorative tie, courtesy of Gorman’s dapper former No. 2, Colm Kelleher, that entails waterfowl and “The Twelve Days of Christmas”) and Moody’s downgraded the agency’s debt. For years after the 2008 disaster, Morgan Stanley remained Wall Road’s weakling, lurching from one mess to a different and unable to win again buyers.
Gorman’s technique of reducing again on dangerous buying and selling and going onerous into the steadier enterprise of cash administration was clearly appropriate and has now been copied by everybody from Goldman Sachs to Blackstone.
He was early to see that, popping out of 2008, each regulators and shareholders would like regular, lower-octane companies to the revenue pyrotechnics of the final decade. A former McKinsey marketing consultant, he beloved the wealth-management enterprise, regardless of by no means having slapped a again in his complete life, and made it the engine of a brand new Morgan Stanley that’s now one among Wall Road’s persistently greatest performers. (Outfoxing Vikram Pandit and getting Smith Barney, Citigroup’s big wealth brokerage, for a track didn’t damage.)
He could possibly be aloof and peevishly analytical. “You’ll by no means hear him say ‘name me Jimmy,’ it’s all the time James,” David Rubenstein informed me for this 2018 profile, and he discontinued Mack’s custom of eating within the firm cafeteria. The agency’s larger egos, like funding banker Paul Taubman and wealth-management government Greg Fleming, departed.
He additionally introduced a self-discipline that had been sorely lacking. Gorman writes the agency’s day by day income figures longhand every night time, tucking the looseleaf pages right into a folder. I don’t know if he nonetheless does, however for some time he stored a listing of each Spotify track he performed on his desk, proper subsequent to a listing of his New 12 months’s resolutions.
He was extra cautious about shifting into the white area created after Morgan Stanley was reworked at gunpoint right into a financial institution holding firm in 2008. Goldman Sachs, in the identical boat, ultimately grabbed onto its new banking license with each fingers, and is now making an attempt to unwind a disastrous foray into shopper banking (one which Gorman thought was idiotic, and would say as a lot to anybody who requested.)
Morgan Stanley stayed out of the toaster sport and struck one shrewd acquisition after one other. Solium, for $900 million, locked down a key distribution channel for its wealth merchandise. Eaton Vance, for $7 billion, turned its subscale asset-management arm right into a participant.
Even E*Commerce, purchased for a hefty $13 billion on the peak of the pre-pandemic market, in February 2020, has paid for itself, bringing 5 million new purchasers and a few extra deposits that Morgan Stanley has redeployed into loans to its rich purchasers.
For any CEO, the bottom line is not overstaying the welcome. Subsequent 12 months, Gorman may have been within the seat for 14 years and reshaped the agency — the “architect of the reengineered success story that’s Morgan Stanley,” Kelleher, his longtime deputy and now UBS’s government chairman, informed me in the present day.
On a facet notice, Gorman stated in the present day that he’ll keep on as government chairman. I’ve by no means understood why new CEOs typically get the chairman’s job as properly — they might use additional supervision — however I’ll additionally notice that Gorman ultimately discovered Mack, who remained chairman for nearly two years, to be somewhat meddlesome.