A Morgan Stanley logo hangs outside their headquarters in New York. (Photographer: Patrick Andrade/Bloomberg News)

Morgan Stanley CEO Candidate List Takes Shape on Promotions

(Bloomberg) -- Morgan Stanley’s Ted Pick was promoted to head the division that houses all of its investment bankers and traders, bolstering his position as a possible successor to Chief Executive Officer James Gorman.

Pick, 49, led Morgan Stanley’s equity-trading business to a No. 1 ranking for the past four years and has been leading a fixed-income turnaround since 2015. The new role, announced Tuesday in an internal memo, adds oversight of the firm’s dealmakers to his responsibilities. Franck Petitgas, 57 and also considered a CEO candidate, was appointed head of the bank’s international operations as part of the shuffle.

Gorman, 59, has been moving senior executives in an effort to groom his eventual successor, though he’s indicated he plans to stay on several more years. Pick’s success with the equities-trading business makes him a leading candidate. After being put in charge of the company’s fixed-income unit in 2015, Pick cut about 25 percent of the division’s staff and installed new management. The push started to bear fruit last year as Morgan Stanley posted the smallest drop in revenue from that business on Wall Street.

Morgan Stanley CEO Candidate List Takes Shape on Promotions

“Broadening the experience and skill sets of our senior leaders is a critical component of sustaining Morgan Stanley’s future success,” Gorman and President Colm Kelleher said in the memo. The firm previously had named bankers Dan Simkowitz and Jon Pruzan to be head of asset management and chief financial officer, respectively.

Post-Crisis Fix

Pick, who rose up through the capital-markets business during his more than two decades at the firm, took over equities trading after many hedge-fund clients abandoned the firm during the financial crisis. His push into electronic trading and the integration of the Smith Barney brokerage helped Morgan Stanley pass Goldman Sachs Group Inc. as the top equity-trading firm.

Now Pick is trying to bring some of that success to the fixed-income operation, including efforts to broaden electronic trading in that business. He hired Phil Allison, previously of KCG Holdings Inc., to lead the automation effort last month. Allison reports to Sam Kellie-Smith, who was global head of equities under Pick and was named in 2016 to run the bond operation.

Petitgas was made co-head of investment banking in 2012 when long-time executive Paul Taubman left the firm. That made him responsible for global client coverage, mergers and acquisitions and capital markets alongside Mark Eichorn. Petitgas joined Morgan Stanley in New York in 1993 and moved to the London office three years later, rising to become head of European investment banking.

As part of the changes, the firm also named Susie Huang co-head of the investment-banking unit, replacing Petitgas. Huang was elevated to lead M&A in the Americas in 2015 after the two heads of that business departed. Globally, the firm is ranked No. 1 in M&A so far this year, according to data compiled by Bloomberg.

Gokul Laroia, David Russell and Alan Thomas were named co-heads of the equity-trading business as part of the changes.

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