May 23, 2023: On Friday, James Gorman said that he intends to resign as Morgan Stanley’s CEO within the year, setting off a succession race atop one of Wall Street’s dominant firms.

The bank’s board has narrowed its CEO search to three “strong” internal candidates, Gorman told shareholders at the New York-based firm’s annual meeting.

He said Gorman, 64, will take on the executive chairman role “for some time” after stepping down as CEO.

“The specific period of time of the CEO transition has not been showing, but it is the boards and my anticipation that it will occur at some point in the coming 12 months,” Gorman stated.

“That is the current anticipation in the absence of a huge change in the external environment,” he further stated.

Since taking regard in 2010, Gorman is pulling off one of the more successful changes on Wall Street. Through savvy acquisitions, Morgan Stanley rebounded after almost capsizing during the 2008 financial crisis, becoming a wealth management juggernaut.

The bank started that journey in 2009 when Morgan Stanley purchased Smith Barney from Citigroup in the throes of the financial crisis, which gained thousands of financial advisers. It then spent more than $20 billion acquiring discount brokerage E-Trade and investment manager Eaton Vance in 2020, which added scale and heft to the bank’s nontrading operations.

As a result, Morgan Stanley has become an asset-gathering machine: Gorman has said his bank can add roughly $1 trillion in assets every three years, eventually reaching $10 trillion.

“It is hard to talk that James Gorman has not been the elite CEOs in the financial services industry, which takes the firm coming out of the” 2008 financial crisis and sharply improving its come back, KBW analyst David Konrad said in a research note.

The firm’s investors rewarded it with one of the top valuations among big bank peers. That’s because shareholders favour the steadier revenue streams of wealth and asset management over the more volatile fees from trading and advisory businesses.

Shares of Morgan Stanley have tripled during Gorman’s tenure.