Morgan Stanley appoints Ted Pick as its upcoming CEO

Morgan Stanley has announced significant changes in its leadership and has reportedly reached a resolution with the Justice Department and Securities and Exchange Commission (SEC) regarding an investigation into its handling of block trades.

Ted Pick, a 33-year veteran of the bank who previously served as the firm's Chief Financial Officer (CFO), has been named as the new CEO, effective from January 1. Pick's appointment follows a long-standing speculation of his potential succession to the top role.

In a move aimed at strengthening its wealth management and investment management divisions, Andy Saperstein will lead the wealth management business and take on additional duties in investment management. Dan Simkowitz, on the other hand, will take over Pick's old role atop institutional securities and serve as co-president of the bank. Both Saperstein and Simkowitz have been rewarded with a $20 million, one-time equity award.

The equity awards for Pick, Saperstein, and Simkowitz consist of 60% performance-based stock units and 40% restricted stock units that will convert to shares in 2027.

The bank disclosed in May that it was in talks with the Justice Department and the SEC to resolve an investigation. Now, it has been reported that the bank has reached a resolution, although the terms of the agreement have not been disclosed.

Morgan Stanley has had a tumultuous year, with the 2021 collapse of Archegos resulting in a loss of $911 million, the most of any U.S. bank. Despite this setback, the bank's assets under management now exceed $6 trillion, a testament to its resilience and growth.

James Gorman, the outgoing CEO, described Pick as "battle-tested" and teased that the total assets under the next CEO could reach $20 trillion. Gorman will become the bank's executive chair for an unspecified time after January 1.

Meanwhile, Jon Pruzan, the bank's former chief operating officer, left in January to become president of the investment firm Pretium.

Morgan Stanley completed acquisitions of E*Trade and Eaton Vance in 2020, further expanding its reach and capabilities. As the new CEO, Pick will be tasked with steering the bank through the challenges and opportunities that lie ahead.

The bank's executive compensation for 2022 was disclosed, with Ted Pick earning $22.5 million in variable pay, Andy Saperstein earning $19.5 million, and Dan Simkowitz earning $17 million.

As Morgan Stanley moves forward under its new leadership, it remains committed to delivering value to its clients and shareholders, and to maintaining its position as a leading global financial institution.