December 7, 2020JAMES GORMAN
CHIEF EXECUTIVE OFFICER,
MORGAN STANLEY
NEW YORK ○ Morgan Stanley unveiled a $13 billion
takeover of retail brokerage ETrade Financial Corp. in
February, then sprang another surprise in October with the
$7 billion purchase of the fund company Eaton Vance Corp.Inside Morgan Stanley’s Times Square skyscraper, Gorman
is mostly alone. The faces he sees are those of stern-looking
bankers in oil paintings lined along the wood-paneled wall
outside his office. They’re reminders of the people who came
before him at a company that traces its roots to the Gilded
Age tycoon John Pierpont Morgan.After a decade atop the place, Gorman
has made his own big mark, with two of the
largest deals by a top Wall Street bank in
years. They came along with record profits
and a soaring stock price. “How could you
not be happy?” Gorman asks. “We just hit
a $100 billion market cap, we’ve done two
signature transactions in two areas of the
business where we needed to do some-
thing, and we’ve navigated Covid without
the organization falling apart.”
Ever since the recovery from the 2008
financial meltdown, major banks have
been looking for opportunities to expand.
But the Melbourne-born Gorman was
more willing than his peers to pounce on
acquisitions. “I think we’ve been the only
bank in the last 10 years to do deals,” he
says. “I don’t see myself as a dealmaker or
not a dealmaker. I think of myself as hope-
fully strategic and that if you find good
deals, you shouldn’t be shy about it.”
Gorman has long believed Morgan
Stanley needed to pivot from its reliance
on the rarefied business of high finance,
which involves things like playing match-
maker for blue-chip corporations and
helping hedge funds trade. These activ-
ities are profitable but subject to the
whims of markets. The ETrade and Eaton
Vance deals give Morgan Stanley more
ways to earn steady fee revenue help-
ing to manage individuals’ nest eggs. Its
money management businesses now
make up about 60% of revenue. It will
soon be the steward of $4.5 trillion worth
of other people’s investment assets.
“Finance has become less swashbuck-
ling, less sexy, and a little more boring,”
says Tom Glocer, a Morgan Stanley board
member and former CEO of Thomson
Reuters Corp. “People like James stand
out in a time like this. He will be known as
one of the great CEOs, not just in bank-
ing but one of the great CEOs, period.”
Gorman’s landmark year also brought a less welcome
distinction: He was the only senior executive at a top
Wall Street bank to disclose that he’d gotten Covid-19. He
self-isolated and has recovered. Currently less than 20%
of the staff in Morgan Stanley’s New York headquarters is
back in the office. “We did a lot of Zoom calls,” Gorman says,
reflecting on the challenges of lockdown. “I did them from
my home—people seeing you in casual clothes, sitting in
your home office—and I think it gives them comfort to know
that you’re not freaking out.” —Sridhar NatarajanGorman in New York
B Photograph
by Justin J. Wee