Mack Returns to Morgan Stanley
John J. Mack returned to Morgan Stanley as its chairman and chief executive Thursday, bringing the stability of a Wall Street veteran to a beleaguered firm and promising to seek the return of top employees who left the company under former Chairman and Chief Executive Philip J. Purcell.
The company’s board of directors voted unanimously to name Mack chairman and CEO, a long-rumored appointment thought to appeal to the company’s investment bankers and expected to promote internal unity.
The company said Mack would take over immediately from Purcell, who announced his retirement June 13 under pressure from investors and directors over his leadership style and management of the company.
In an interview with Associated Press, Mack said he would reach out to employees who left the firm during Purcell’s watch. Five of the 14 members of Morgan Stanley’s executive committee -- including veteran mergers-and-acquisitions star Joseph Perella -- left the company in late March and early April, many expressing frustration with perceived favoritism from Purcell.
“I would like to have them come back, along with others,” Mack said. “There are some talented people out there who have left Morgan Stanley, not just those five executives. We need more talented people.” He later added that he had been in touch with Perella and other executives and was in negotiations to try to bring them back.
Mack’s return comes four years after he resigned from the firm in a bitter power struggle with Purcell. The 29-year Morgan Stanley veteran was greeted with cheers at an employee meeting and a standing ovation as he toured the firm’s trading floor.
“This is obviously very positive,” said Jennifer Chien, equity analyst with PNC Advisors. “He’s a longtime veteran of the organization, he knows the institutional business very well, and he’ll have a lot of the bankers and traders on board with him.”
Mack, 60, is known for executing a financial turnaround as CEO of Credit Suisse First Boston after he left Morgan Stanley in 2001.
Now he inherits a Wall Street institution in crisis. He faces low employee morale and poorly performing asset management and retail brokerage businesses. Morgan Stanley’s second-quarter earnings disappointed Wall Street as margins eroded and revenue fell.
“The easy answer is to just say that we’ll focus on clients, get on the right side of trades and execute our strategy,” Mack told Associated Press. “But really, it’s going to take me some time to look at the firm, spend time with managers who run these businesses.”
Morgan Stanley’s shares fell 85 cents to $52.47.
