James Gorman, Morgan Stanley’s chief executive, on Tuesday told shareholders he was “unambiguously” in charge of the Wall Street bank, and rebuffed questions over whether John Mack’s role as chairman diluted his powers over the company
Mr Mack, who preceded Mr Gorman at the helm and became chairman in January, vowed to step down if his successor felt his presence hindered his ability to run the company.
Mr Mack said at Morgan Stanley’s annual investor meeting: “I told James if at any point I’m in his way, he needs to let me know and I will resign”.
The exchange highlights the concerns of some investors at the structure of the bank’s upper echelons following Mr Gorman’s ascension to the top job in January.
Mr Mack’s handover to Mr Gorman, a former McKinsey consultant and Merrill Lynch executive, was praised as a well planned transition that lacked the drama and internal infighting of other leadership changes on Wall Street.
However, unions, pension funds and other activists have called for financial groups to appoint independent, non-executive chairmen to better oversee management and look after the interests of shareholders.
At Tuesday’s meeting, investors defeated such a proposal, which Morgan Stanley had opposed as too “inflexible”.
Similar requests have been tabled at the annual meetings of Goldman Sachs and JPMorgan Chase, where the chairman and chief executive are the same person.
Goldman Sachs shareholders defeated the proposal this month and JPMorgan’s investors did the same at their meeting on Tuesday.
In response to an investor’s question over who was really running Morgan Stanley, Mr Gorman said he had a very good personal relationship with Mr Mack, but added: “I am unambiguously the CEO of the corporation”.
Mr Mack said he took most of the questions on Tuesday because the meeting referred to 2009, when he was still in charge.
Mr Gorman said that, after a period of underperformance during the financial crisis, Morgan Stanley’s future success depended on executing its strategy of beefing up trading businesses and completing the integration of Citigroup’s Smith Barney brokerage arm.
The Morgan Stanley chief reiterated that the company had not been informed of any probe related to mortgage-backed securities by US government agencies, in spite of a press report of an investigation by the Department of Justice.
Mr Gorman said the bank was in favour of regulatory reform and that Wall Street had to work hard to regain the public trust it had lost in the crisis. “We need to understand why people are so angry at Wall Street.’’
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