Morgan Stanley chief James Gorman will step down within a year

James Gorman plans to step down as chief executive of Morgan Stanley within the next year after more than a decade at the helm of the Wall Street bank he turned into a wealth management juggernaut.

Gorman, 64, said at the bank’s annual shareholder meeting on Friday that ,The specific timing of the CEO transition has not been determined, but it is the Board’s and my expectation that it will occur at some point in the next 12 months.

He said he expected to be acting president “for some time” after handing over to his successor.

Gorman said that Morgan Stanley’s board “identified three very strong senior internal candidates for consideration as the next CEO”.

The leading candidates to take over are co-chairs Ted Pick and Andy Saperstein, who oversee Morgan Stanley’s institutional securities and wealth management divisions, respectively, and Dan Simkowitz, head of the investment management unit, according to people familiar with the matter.

Chief operating officer Jonathan Pruson was another leading contender to take over from Gorman, but he left earlier this year.

Morgan Stanley shares were trading down about 0.6 per cent in pre-market trading in New York.

Australian-born Gorman replaced John Mack as CEO in early 2010, previously co-chairman of Morgan Stanley in charge of global asset management, investment management and operations. He became the president in 2012.

His appointment 13 years ago underscored Morgan Stanley’s intention to expand into wealth management and break 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. Under his leadership, the market capitalization of the bank has tripled to around $140 billion.

However, his tenure has not been without stains. The bank is currently under investigation by US authorities over its block trading business and earlier this month said it was in talks to settle the matter.

Gorman told shareholders at an investor event last year that he had no plans to leave the bank anytime soon.

Along with Jamie Dimon at JPMorgan Chase and Brian Moynihan at Bank of America, Gorman is one of a group of Wall Street bank CEOs who bucked a wider trend of shorter executive tenures at US companies.