By Lars Mucklejohn
Morgan Stanley has chosen Edward “Ted” Pick to succeed James Gorman as the bank’s chief executive.
He is set to take over on 1 January 2024 and join the bank’s board of directors.
Here’s what you need to know about Pick and the key issues that will affect his new role.
Three decades of service
Pick, 54, graduated from Middlebury College and holds an MBA from Harvard Business School.
He joined Morgan Stanley as an analyst in 1990, being promoted to managing director in 2002 and joining the bank’s management committee in 2008.
In 2012, he joined the ranks of the operating committee, which is made up of Morgan Stanley’s most senior figures.
Pick has been the bank’s co‐president for the last two years. As head of the institutional securities group, he oversees investment banking, equities, fixed income, capital markets and research. He is also co‐head of firm strategy.
Track record
Insiders had considered Pick the frontrunner to succeed Gorman due to his track record in boosting the bank’s risky equities and fixed income businesses.
Pick is credited with turning Morgan Stanley’s trading business around during the 2008 financial crisis while he ran the firm’s equity capital markets.
The bank faced collapse as clients fled and the firm lost more than 80 per cent of its market value. It was ultimately saved by a $9bn investment from Mitsubishi bank.
Under Pick’s leadership, Morgan Stanley’s equities division grew to become the global leader by revenue.
Pick was made global head of sales and trading in 2015 and helped breathe new life into the bank’s fixed income division.
“It’s like if Harold Stanley and Henry Morgan had a baby,” one former colleague told the Financial Times. “Ted just epitomises all the things we love about the place: very smart, very client-focused, fiercely loyal, but a fun guy to have around.”
“The board’s selection of Ted Pick is an outstanding one,” Gorman said in the statement on Thursday. “He is battle-tested, understands complex risk, and works very effectively not just in the US, but around the globe. In short, he is an outstanding executive and leader.”
These attributes come as a major selling point to Morgan Stanley’s board, with the firm facing a challenging environment.
Challenges ahead
Morgan Stanley’s investment banking business has lost market share to JP Morgan and Goldman Sachs amid earnings difficulties in capital markets and deals.
The bank is also dealing with a US regulatory probe into its handling of block trading – a way to sell large volumes of stock.
“The expectation is that the growth of mergers and acquisitions in the next couple of years will be high and that has been Pick’s core competency, so we view it as a good move,” Brian Mulberry, client portfolio manager at Zacks Investment Management, told Reuters.
“He was also the likely choice, adding stability and experience they have been missing as this succession discussion has been going on. This is the type of event that could see faster earning estimate revisions, and investors could move to adopt the stock.”
Argus Research analyst Stephen Biggar added: “Morgan Stanley is generally in very good shape as left by Gorman. Wealth management has carried it while investment banking and M&A activity has been weak. Trading has also been strong.
“Large integrations like eTrade and Eaton Vance are behind it and created some great diversification. Going forward, there is the extended downturn in IPO activity to contend with, (having the right size workforce) and also greater regulation on the horizon that will likely mean higher capital requirements.”
Pick will be working alongside the two contenders he beat out for the position, Andy Saperstein and Dan Simkowitz, both of whom will take up new roles.
Gorman will continue to support Pick, the bank said today, as executive chairman. Gorman may stay with the firm for a full year to help with the transition.
