James P. Gorman
Chairman and CEO, Morgan Stanley
James P. Gorman, chief executive of Morgan Stanley, has no illusions about how badly the financial crisis damaged the reputations of Wall Street banks such as his. “We’re going to be in the doghouse for a while,” he told an audience at a Securities Industry and Financial Markets Association conference in late November.
Since his appointment as CEO of the bank Jan. 1, 2010, Mr. Gorman, 55, has reined in Morgan Stanley’s trading culture, selling and spinning off proprietary trading operations and unapologetically slashing compensation for traders and investment bankers. Mr. Gorman has hitched the company’s fortunes to the more stable business of wealth management. He was the chief architect of the deal to merge Morgan Stanley’s brokerage operations with those of Citigroup Inc.’s Smith Barney division in 2009 and recently committed the bank to purchasing the rest of the joint venture over the next several years.
Profitability in the business remains far below Mr. Gorman’s initial 20% pretax-profit-margin target. With nearly 17,000 advisers, however, Morgan Stanley remains a major force in the industry. Under Mr. Gorman’s leadership, it is likely to become more squarely focused on wealth management in 2013 and for years to come.—Andrew Osterland