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"James Gorman was backed into a Ted Pick corner once Jon Pruzan left"

So, James Gorman has chosen Ted Pick to be the new CEO of Morgan Stanley. I am not surprised. The moment James Gorman eliminated former CFO Jon Pruzan, Pick was the only realistic choice remaining. 

Yes, Andy Saperstein did a good job of running the wealth management (retail brokerage) business, but, like Gorman, he is a former management consultant (also ex-McKinsey) who's never actually worked as either a retail broker or an investment banker.

Dan Simkowitz, who had been running asset management, is a Morgan Stanley "native" like Ted Pick. Like Pick, Simkowitz grew up in the Equity Capital Markets business in the 1990s. So his professional background is similar, but he doesn't have the years of experience in leading the large equity and fixed income sales and trading businesses.

So Ted was really the only choice of the three "finalists".

However, having worked with Ted, my own choice of CEO would have been Jon Pruzan, Morgan Stanley's former CFO, who grew up as a financial institutions (FIG) banker. Historically, FIG was the background of every MS CFO. But those men (and one woman, Ruth Porat, whose next CFO post was at Alphabet/Google!) never made it to the CEO office.

In Pruzan's case, this was a shame. Pruzan understands the business and in my experience he's a much nicer guy than Pick. It was Pruzan that Gorman tasked with looking hard at the fixed income business and diagnosing its problems. However, it's Pick who's remembered for that process because it was he who executed the plan and led the business day-to-day through the transition. 

Aged only 53 Pruzan 'retired' in January 2023, and Pick has inherited the crown. Somehow, Pick came to seem like more of a leader than Jon because he has a bigger personality around the trading floor and he likes a lot of direct personal engagement. Pruzan is equally personable, but in a quieter way. He doesn't project the kind of alpha male trading floor "leadership" style that Ted has cultivated.

I think it's telling that Ted has a quote about risk management from John Havens on his office wall. Havens (who left MS with Vikram Pandit to start a hedge fund that they sold to Citigroup) is highly intelligent and one-on-one is a very nice and well-mannered guy. But in any group setting, he can project a very tough, hard-edged persona, developed from his start as an equity block trader (first at the old Kidder Peabody, then at Morgan Stanley). 

The danger for Morgan Stanley is that this becomes the new culture of the firm.

William Lawson is the pseudonym of a veteran banker on Wall Street 

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AUTHORWilliam Lawson Insider Comment

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