Morgan Stanley announced that its CEO Johnny Mack will be stepping down effective January 1, 2010, at which time Mack (who will remain chairman) will be handing over the reins to Morgan co-president James Gorman.
Although the move may seem sudden, it was expected. Almost two years ago, Mack told the Morgan board that he would be looking to relinquish his duties as chief after he turns 65 this November.
Mack's most recent major strategic decision as the bank's chief was to play the markets safe, reducing Morgan's risk-taking in the past two quarters, which didn't turn out to be such a hot call, considering competitors like Goldman Sachs and J.P. Morgan ramped up their risk-taking during the same time period and booked billions of dollars as a result.
In Gorman, Morgan gets a new leader who has led the firm's global wealth management business and who, along with working for Merrill Lynch in the past, has experience as an attorney and a consultant (he once worked for prestigious consultancy McKinsey & Co.). Gorman is originally from Australia, where he graduated from the University of Melbourne (expect the Aussie press to get pretty excited about Gorman's rise to the top of Morgan's org chart). He also received an MBA from New York's Columbia University. But what really secured the top slot for him is the fact that if you rearrange just a couple letters of Gorman's last name, you get Morgan.