Gorman will resign within a year

James Gorman said Friday he plans to step down MorganStanleyWithin a year, he was named CEO, sparking a race for succession at the helm of one of Wall Street’s dominant companies.

The bank’s board has narrowed the search for CEOs to three “very strong” internal candidates, Gorman told shareholders at the New York-based company’s annual meeting.

Gorman, 64, will assume the role of chief executive “for a period of time” after stepping down as CEO, he said.

“The exact timing of the CEO change is yet to be determined, but the board and I expect it to happen sometime in the next 12 months,” Gorman said.

“That is the current expectation as long as the external environment does not change significantly,” he added.

Since the takeover 2010, Gorman has pulled off one of Wall Street’s most successful transformations. Through a series of smart acquisitions, Morgan Stanley recovered after it nearly capsized during the 2008 financial crisis and blossomed into a wealth-management juggernaut.

The bank began this journey in 2009 when Morgan Stanley Smith bought Barney Citigroup in the turmoil of the financial crisis and gained thousands of financial advisors. It then spent more than $20 billion in 2020 to acquire discount brokerage firm E-Trade and investment manager Eaton Vance, adding scale and weight to the bank’s non-trading businesses.

As a result, Morgan Stanley has become a wealth accumulation machine: Gorman said his bank can add about $1 trillion in assets every three years, eventually getting to $10 trillion.

“It’s hard to argue that James Gorman wasn’t one of the financial services industry’s elite CEOs, taking over the company after the 2008 financial crisis and significantly increasing its earnings,” KBW analyst David Konrad said in a research note.

The company’s investors have rewarded it with one of the highest ratings among major banks. That’s because shareholders prefer the more stable revenue streams of wealth management to the more volatile trading and advisory fees.

Morgan Stanley shares have tripled during Gorman’s tenure.

Morgan Stanley’s internal CEO nominees are the men who will lead the bank’s three chief executives Pursuesuch people with expertise.

As of 2021, Ted Pick and Andy Saperstein, who respectively head the bank’s capital markets and wealth management practice, are also co-chairs. Dan Simkowitz heads the smallest division of the bank, Investment Management, and was appointed Co-Head of Strategy in 2021.

The announcement makes official Gorman’s desire to hand over the reins to another executive. Gorman said public He hadn’t planned on staying long as CEO in recent years, and on Friday he joked that he wouldn’t die with the title.

Gorman has “no plans to go out like this Logan Royhe, the fictional CEO from the HBO series Succession, told investors.