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Morgan Stanley CEO James Gorman is stepping down within a year

James Gorman plans to step down as CEO 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 firm.

Gorman, 64, told the bank’s annual shareholder meeting on Friday that “the specific timing of the transition to CEO has not been determined, but it is the board’s and my expectation that it will happen at some point in the next 12 months.”

He added that he expected to be leader “for a period” after handing over to his successor.

Gorman said Morgan Stanley̵[ads1]7;s board had “identified three very strong senior candidates for consideration as the next CEO”.

The leading candidates to take over one of Wall Street’s most prized positions are co-presidents Ted Pick and Andy Saperstein, and Dan Simkowitz, head of the investment management unit, people familiar with the matter said. Pick runs Morgan Stanley’s institutional securities business, which houses investment banking and trading, while Saperstein oversees the wealth management division.

“Going for Andy Saperstein, it’s the higher multiple, more predictable business. Going for Ted Pick, that’s probably the more complex business, said Chris Kotowski, an equity analyst at Oppenheimer.

Line chart of market capitalization under Gorman ($bn) showing Morgan Stanley overtaking Goldman

Chief operating officer Jonathan Pruzan had been another leading candidate to take over from Gorman, but he left earlier this year.

Morgan Stanley shares closed down more than 2 percent on Friday.

Australian-born Gorman replaced John Mack as CEO in early 2010, having been the bank’s co-president responsible for global wealth management, investment management and operations. He became chairman of the board in 2012.

His appointment 13 years ago underscored Morgan Stanley’s intention to expand into 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 value has tripled under his leadership to around 140 billion dollars, en route to overtaking arch-rival Goldman Sachs.

“He’s been a phenomenal CEO,” said Christian Bolu, banking analyst at Autonomous Research. “Where Morgan Stanley was, where they are now, a big part of it is his vision, the execution.”

However, his tenure has not been faultless. The bank is being investigated by US authorities over its block trading business and said this month it was in talks to settle the case.

Gorman told shareholders at the investor meeting last year that he had no immediate plans to retire from the bank.

Along with Jamie Dimon at JPMorgan Chase and Brian Moynihan at Bank of America, Gorman is among a group of Wall Street bank chiefs who have bucked a broader trend of shorter executive tenure at American companies.

During the shareholder meeting, Gorman said Morgan Stanley was “very” insulated from recent market struggles at several regional US banks.

“We play in the same neighborhood, but luckily we have one of the best houses,” Gorman said. “I don’t think there has actually been a banking crisis. . . I think there is a crisis among some banks.”

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