Tag Archives: John Mack

Morgan Stanley to reshuffle top posts

The incoming CEO of Morgan Stanley James Gorman is planning a reshuffling of the executive posts as he takes over the post currently handled by John Mack on January 1.  The changes will see Colm Kelleher and Paul Taubman run some of the bank’s largest divisions including sales,  trading and investment banking.

See the story on WSJ.

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Mack to step down as Morgan Stanley CEO

From the FT:

John Mack is to step down as chief executive of Morgan Stanley, putting an end to a four-year tenure marked by controversy over his strategic decisions and a near-death experience during last year’s financial crisis.

Mr Mack, who will stay on as chairman when he leaves the chief executive post in January, will be replaced by James Gorman, the bank’s co-president in charge of global wealth management, investment management and operations.

The appointment of Mr Gorman, who headed the private client business at Merrill Lynch before joining Morgan Stanley in 2006, underlines the growing importance of wealth management and the retail brokerage business to the future of Morgan Stanley.

This announcement came as a surprise to many.

Read the FT report.

Some stuff for the weekend

See John Mack’s Townhouse – Clusterstock

Dilbert On How Wall St. Got It Wrong – Clusterstock

Review: BBC Two’s The Last Days of Lehman Brothers – Bloomberg

G20, Equities, and ‘Double Dip’ – FT

Lessons From a Virtual Bank Run – Salon

Some Expect Negative Fed Funds Rate – Zero Hedge

For Your Health, Froot Loops – NYT

Earnings: A Bearish Indicator for the S&P? – Big Picture

The Curious Paradox of Optimism Bias – Predictably Irrational

Non-business:

USC Could Lose the National Title This Weekend – Bleacher Report

Morgan Stanley modifies compensation scheme

If I’m getting this right, Morgan Stanley is the first of surely many who will be making changes to their compensation scheme after Congress has decided to set limits on executives’ bonuses. First to the details before my view on this. From the FT:

The base salary of John Mack, Morgan Stanley’s chief executive, will remain at $800,000 per year. But the base for his two co-presidents – James Gorman and Walid Chammah – will jump to $800,000. A year ago, the base salary for the position was $300,000.

The firm’s CFO, managing directors, and VPs would all see increases in their base salaries.  From about 15 to 20 percent of overall compensation, this will rise to 25 to 30 percent; this increase is at 35 to 40 percent for executives.

I am not against high pays or bonuses for as long as they are tied to performance. While this moves does not come as a surprise in any way, I believe this is something Congress should have thought of as an unintended consequence. Probably worse than not setting a cap on bonuses at all.

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