James Gorman plans to step down as chief executive of Morgan Stanley within the next year after more than a decade at the top of the Wall Street bank he turned into a wealth management juggernaut.
Gorman, 64, told the bank’s annual shareholder meeting on Friday that the “specific timing of the CEO transition has not been determined, but it is the board’s and my expectation that it will occur at some point in the next 12 months”.
He added that he expected to become executive chair “for a period of time” after handing over to his successor.
Gorman said Morgan Stanley’s board had “identified three very strong senior internal candidates for consideration as the next CEO”.
According to people familiar with the matter, the leading candidates to take over are co-presidents Ted Pick and Andy Saperstein, who oversee Morgan Stanley’s institutional securities and wealth management divisions, respectively, and Dan Simkowitz, head of the investment management unit.
Chief operating officer Jonathan Pruzan had been another leading contender to take over from Gorman but he departed earlier this year.
Morgan Stanley shares were down around 0.6 per cent in pre-market trading in New York.
Australian-born Gorman replaced John Mack as chief executive at the start of 2010, having previously been Morgan Stanley’s co-president in charge of global wealth management, investment management and operations. He became chair in 2012.
His appointment 13 years ago underscored Morgan Stanley’s intention to expand in wealth management and diversify away from its legacy investment banking and trading businesses.
Gorman has doubled down on wealth and asset management with the acquisitions in recent years of ETrade and Eaton Vance. The bank’s market capitalisation has tripled under his leadership to around $140bn.
However, his tenure has not been without blemish. The bank is currently being investigated by US authorities over its block trading business and earlier this month said it was in talks about settling the case.
Gorman told shareholders at the investor event last year that he had no imminent plans to step down from the bank.
Along with Jamie Dimon at JPMorgan Chase and Brian Moynihan at Bank of America, Gorman is among a clutch of Wall Street bank chiefs who have bucked a broader trend of shorter executive tenures at US companies.