Morgan Stanley’s former CEO James Gorman will step down as chairman of the bank’s board at the end of the year, he said at the bank’s annual shareholders’ meeting on Thursday.
Gorman became chairman of the board when Ted Pick became CEO in January. When his successor was announced, Morgan Stanley did not give a timeline for how long Gorman would stay on in the role. Gorman suggested to Bloomberg in November that he would serve no longer than a year as chairman, and told The Wall Street Journal that his job was to support Pick, not dictate to him.
“Given the success of this transition, it is now appropriate for me to announce that I will formally step down as chairman of Morgan Stanley on December 31st of this year,” Gorman said on Thursday, according to the Financial Times.
No successor to the chairman position has been named, but Pick is a strong possibility. Gorman served as CEO for all but the first two of his predecessor John Mack’s 14-year tenure as chairman.
Mr. Gorman’s departure as chairman after just one year can be seen as a vote of confidence in Mr. Pick, who has plenty of leadership at the bank. Morgan Stanley was able to retain both Andy Saperstein and Dan Simkowitz, who lost out to Mr. Pick in the CEO race.
The bank paid Saperstein, Simkowitz and Pick a lump-sum payment of $20 million each, but the bonuses have drawn criticism from proxy advisory firm Glass Lewis, which is urging Morgan Stanley shareholders to reject the bank’s executive pay package in a vote on Thursday.
Proxy advisers this year have generally frowned upon banks combining the CEO and chairman roles, as they did under Mr. Gorman, but recommendations to separate the roles failed to take hold this year.
JPMorgan Chase & Co. shareholders on Tuesday rejected a proposal to split Jamie Dimon’s combined CEO and chairman roles, with 42.7% backing the proposal, up from the 33% and 31% that similar proposals received at Goldman Sachs and Bank of America Corp. this month.
