Morgan Stanley names Ted Pick as next CEO

Morgan Stanley (MS) announced Ted Pick will succeed James Gorman as CEO effective January 1, 2024. Pick, who has served as Head of the Institutional Securities Group at the bank, was instrumental in securing capital for Morgan Stanley during the financial crisis. However, with Gorman having led the bank for so long, the transition to a new CEO could be difficult, with Wells Fargo analyst Mike Mayo saying, Gorman is a "tough act to follow."

Whalen Global Advisors Chairman Chris Whalen joins Yahoo Finance's Rachelle Akuffo to discuss how Pick could be expected to help Morgan Stanley navigate the banking sector after industry woes in early 2023.

"What he's inheriting is a nice stable three-legged stool," Whalen says. "If you compare [Morgan Stanley] to Cit or Goldman Sachs, they're clearly better positioned because when capital markets and really the transactional side of the business slows down, you have the big asset management portfolio."

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

This post was written by Luke Carberry Mogan.

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BRAD SMITH: Wall Street's succession plans here.

We know that bank veteran Ted Pick will succeed Morgan Stanley CEO James Gorman at the start of 2024.

Morgan Stanley announcing back in May that Gorman would step down and select his successor from one of the bank's three main division heads.

But Morgan Stanley's leadership shakeup raises the big question, who else among big bank CEOs could be passing the baton.

So let's focus in here on Ted Pick.

Give the people what they need to know about Mr.

Pick, formerly or previously head of Equity Capital Markets here.

Also is credited with having a hand in helping the firm raise capital during the financial crisis here as well.

And so a kind of storied career over at Morgan Stanley and some of the larger times and the great financial crisis or even through the pandemic and times even between.

I think that's where they're kind of leading into the bench that they do have the roster, that they do have and trying to promote from within there as well.

SEANA SMITH: It is certainly was not a surprise.

It was well signaled ever since James Gorman announced that he was going to eventually be stepping down.

But it's interesting just in terms of the Street's reaction, taking a look at some of the analyst commentary coming out this morning, just really discussing the fact that Gorman has such an influence, obviously, over the bank ever since taking control of CEO back in 2010 and the direction in which he has steered Morgan Stanley.

So any sort of change, obviously, could be potentially a little bit tough at least in the short-term.

Mike Mayo of Wells Fargo saying that he is a very tough act to follow when it comes to what we could expect here going forward.

Mike Mayo saying that the new CEO faces a 2024 consensus EPS reset, asset management headwinds, muted investment banking, also challenges managing peers while the CEO stays on as chair.

This can make for a tricky few quarters.

But again, on the other hand though, it does remove this overhang that has certainly been on the stock ever since Gorman announced that he was going to be retiring.

And that was the main takeaway from the desk over at JP Morgan, just saying that they don't expect any material change in strategy.

That's also something that Ted has reiterated since being named CEO last night.

But they do also point out that the block trading matter is still an overhang for the stock.

A resolution would be helpful in JP Morgan's view in terms of the direction or getting better clarity going forward here for Morgan Stanley.

But we're looking at a three-month chart.

You're looking at shares under pressure, off just about 24% year-to-date.

The stock down about 16%.

We'll see what Ted does as the top job and how he then further accelerates the company here moving forward.