After more than seven months as Morgan Stanley’s chief executive, John J. Mack named Zoe Cruz and Robert Scully co-presidents. The appointments help clear up an uncertain management picture. The arrival of James Gorman next week as retail chief reporting to Cruz should help even more.
Questions still exist, though. One concerns succession. Neither Cruz nor Scully were immediately seen as strong candidates to succeed Mack, who intends to stay in his job for at least in three years. Another issue is how Cruz and Gorman intend to revive the troubled retail division. The arrival of Gorman, who was actually hired by Mack just after he took over as chief executive, has been anticipated nearly as much as the appointments of Cruz, who had been acting president, and Scully, a senior banker at the firm.
Morgan brokers had mixed reactions to the latest news. One top producer gushed about Cruz, and said he’s thrilled she will remain in her top perch, overseeing retail. “I’m so happy that Zoe is going to be responsible for retail,” he said. “She is just incredible. She speaks from the heart. She really wants to learn about our side of the business. I think she’ll be a very positive thing for our business. Everybody loves her. She’s one of the most articulate, intelligent people I’ve ever met. She’s really looking at the long-term.”
But another broker was less sanguine, saying it’s neither good news nor bad news. What reps are really waiting for, he says, is the arrival of James Gorman, the new head of the retail brokerage, who arrives from Merrill Lynch next week. “It’s totally irrelevant,” the broker said. “Zoe was there already. The exodus [of brokers] hasn’t slowed down at all. There’s no incentive to stay—no retention package and too much uncertainty. If Gorman can’t turn it around, will they spin it off, or keep it? Who knows what’s going to happen.”
Cruz, 50, will continue to oversee retail brokerage as well as institutional securities. Scully, 56, will be in charge of the credit card business and asset management as well as private equity. Last summer, the investment banking division lost two of its top people in a management scuffle—Joseph Perella and Terry Meguid—so some observers see the appointment of Scully as an attempt to appease the division.
Cruz returns to a position she held briefly before John J. Mack re-took the helm at Morgan Stanley last June. She was first appointed co-president last March in a management shuffle under former CEO Phillip Purcell. Mack named her acting president when he arrived. At the same time, Mack reportedly was looking for other executive talent. BlackRock chief executive Larry Fink was one name that came up and speculation that Fink may yet have a role at Morgan Stanley continues.
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