UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 25, 2023
Morgan Stanley
(Exact Name of Registrant
as Specified in Charter)
| Delaware | 1-11758 | 36-3145972 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 1585 Broadway, New York, New York | 10036 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (212) 761-4000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, $0.01 par value | MS | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of Floating Rate Non-Cumulative Preferred Stock, Series A, $0.01 par value |
MS/PA | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E, $0.01 par value |
MS/PE |
New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series F, $0.01 par value |
MS/PF | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series I, $0.01 par value |
MS/PI | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, $0.01 par value |
MS/PK | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of 4.875% Non-Cumulative Preferred Stock, Series L, $0.01 par value |
MS/PL | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of 4.250% Non-Cumulative Preferred Stock, Series O, $0.01 par value |
MS/PO | New York Stock Exchange |
|
Depositary Shares, each representing 1/1,000th interest in a share of 6.500% Non-Cumulative Preferred Stock, Series P, $0.01 par value |
MS/PP | New York Stock Exchange |
|
Global Medium-Term Notes, Series A, Fixed Rate Step-Up Senior Notes Due 2026 of Morgan Stanley Finance LLC (and Registrant’s guarantee with respect thereto) |
MS/26C | New York Stock Exchange |
|
Global Medium-Term Notes, Series A, Floating Rate Notes Due 2029 of Morgan Stanley Finance LLC (and Registrant’s guarantee with respect thereto) |
MS/29 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 25, 2023, the Board of Directors (the “Board”) of Morgan Stanley (the “Company”) announced that Edward (Ted) Pick will become the Company’s Chief Executive Officer, effective January 1, 2024. At such time, Chairman and Chief Executive Officer James P. Gorman will serve as Executive Chairman and will no longer serve in the capacity of Chief Executive Officer. The Board also announced that Co-President Andy Saperstein will also become the Head of Wealth and Investment Management, and that Dan Simkowitz will become Co-President of the Company and the Head of Institutional Securities, effective January 1, 2024.
The Board determined that Mr. Pick is best suited to lead the Company following an orderly multi-year succession planning process. Mr. Pick is an outstanding executive and a strategic leader with deep knowledge of the Company’s businesses, and a strong track record of building and growing the Company’s client franchise, developing and retaining talent, allocating capital with sound risk management, and carrying forward the Company’s culture and values. The Board believes its succession planning process has demonstrated the world-class quality and depth of Morgan Stanley’s leadership talent and has resulted in the appointment of an outstanding Chief Executive Officer and two strong executives as the Company’s Co-Presidents who will be invaluable leaders in helping the incoming Chief Executive Officer to manage the Company.
Mr. Pick, age 54, has served as Co-President and Co-Head of Corporate Strategy (since June 2021), Head of Institutional Securities (since July 2018), Global Head of Sales and Trading (October 2015 to July 2018), Head of Global Equities (March 2011 to October 2015), Co-Head of Global Equities (April 2009 to March 2011), Co-Head of Global Capital Markets (July 2008 to April 2009), and Co-Head of Global Equity Capital Markets (December 2005 to July 2008). Mr. Pick joined the Company in 1990.
Mr. Saperstein, age 56, has served as Co-President (since June 2021) and Head of Wealth Management (since April 2019), Co-Head of Wealth Management (January 2016 to April 2019), Co-Chief Operating Officer of Institutional Securities (March 2015 to January 2016), and Head of Wealth Management Investment Products and Services (June 2012 to March 2015). Mr. Saperstein joined the Company in 2006.
Mr. Simkowitz, age 57, has served as Head of Investment Management (since October 2015) and Co-Head of Corporate Strategy (since June 2021), Co-Head of Global Capital Markets (March 2013 to September 2015), Chairman of Global Capital Markets (November 2009 to March 2013), and Managing Director in Global Capital Markets (December 2000 to November 2009). Mr. Simkowitz joined the Company in 1990.
On October 25, 2023, the Board increased the number of directors on the Board from 14 to 15, effective January 1, 2024, and elected Mr. Pick to the Board, also effective January 1, 2024. No committee assignments for Mr. Pick have been determined at the time of this filing. Mr. Pick, as an employee director, will not receive any compensation for his Board service. There are no arrangements or understandings between Mr. Pick and any other person pursuant to which Mr. Pick was selected as a director.
Mr. Pick, Mr. Saperstein and Mr. Simkowitz do not have any family relationships with any other executive officer or director of the Company, nor have Mr. Pick or Mr. Simkowitz been involved in any related person transactions with the Company that would require disclosure under Item 404(a) of Regulation S-K. A related person transaction between Mr. Saperstein and the Company is disclosed in the Company’s proxy statement for its 2023 Annual Meeting of Shareholders under “Certain Transactions” on page 46 (available at https://www.sec.gov/ix?doc=/Archives/edgar/data/895421/000114036123016930/ny20005681x1_def14a.htm).
On October 25, 2023, in consultation with its independent compensation consultant, the Compensation, Management Development and Succession Committee of the Board (the “Committee”) approved a one-time staking award (the “Awards”) to each of Mr. Pick, Mr. Saperstein and Mr. Simkowitz. The Committee determined that granting the Awards to each of our incoming Chief Executive Officer and Co-Presidents is in the best interests of the Company and its shareholders as the Company transitions from 14 years of exceptional leadership by Mr. Gorman. The Committee granted the Awards in acknowledgment of the Board’s assessment of the criticality to the continued success of Morgan Stanley of ensuring that each executive continues their outstanding leadership in their new roles at the Company.
The Awards are equity-based, and are designed to reinforce the executive’s accountability for the Company’s future financial goals and directly tie compensation outcomes to shareholder-based value creation over a multi-year period in a balanced manner that does not encourage imprudent risk taking, while incentivizing leadership continuity. Each Award consists of 60% performance stock units (“PSUs”) with a performance period of 2024-2026 that convert to shares in 2027 and 40% restricted-stock units (“RSUs”) that vest and convert to shares on January 25, 2027. Given a recent review of the Company’s PSU program in 2022 with the Committee’s independent compensation consultant and the Company’s Chief Risk Officer and resulting updates to the program, the Committee determined that the program’s equal weighting of absolute and relative ROTCE performance metrics, three-year performance period and performance grid were appropriate for the PSU portion of the Award in order to maintain alignment with the Company’s financial and strategic objectives. The Awards do not contain a provision for vesting upon achieving retirement eligibility, are subject to cancellation for resignation or competitive activity, and are subject to the Company’s accounting restatement clawback policy and Equity Ownership Commitment. Each Award has a grant date fair value of $20 million, which is approximately the average of the annual variable compensation of the three executives. The aggregate number of PSUs and RSUs granted was determined by dividing the Award grant value by the volume-weighted average price of the Company’s common stock on the grant date. These Awards are not part of the executives’ regular annual compensation and will not be awarded on a regular basis.
The above summary of the Awards is qualified in its entirety by reference to the applicable award certificate (forms of which are attached as Exhibit 10.33 to the Company’s annual report on Form 10-K for the year ended December 31, 2017 and Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).
The Company’s related press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in its entirety.
| Item 9.01. |
Financial Statements and Exhibits | |
| (d) |
Exhibits | |
| Exhibit | ||
| Number |
Description | |
| 99.1 | Press release of the Company dated October 25, 2023. | |
| 101 |
Interactive Data Files pursuant to Rule 406 of Regulation S-T formatted in Inline eXtensible Business Reporting Language (“Inline XBRL”). | |
| 104 |
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
|
MORGAN STANLEY
(Registrant)
| |||||
| Date: | October 27, 2023 | By: | /s/ Martin M. Cohen | ||
| Name: | Martin M. Cohen | ||||
| Title: | Corporate Secretary | ||||
Exhibit 99.1
| Morgan Stanley | FOR IMMEDIATE RELEASE |
October 25, 2023
Morgan Stanley Announces Ted Pick to Become Chief Executive Officer on January 1, 2024
James Gorman to Become Executive Chairman
Andy Saperstein to be Co-President and Head of Wealth and Investment Management; Dan Simkowitz to be Co-President and Head of Institutional Securities
NEW YORK - The Board of Directors of Morgan Stanley (NYSE: MS) today announced that Co-President Edward (Ted) Pick will become the Firm’s Chief Executive Officer, effective January 1, 2024. James Gorman will become Executive Chairman. Mr. Pick will also join Morgan Stanley’s Board of Directors at that time. The Firm also announced that Co-President Andy Saperstein will become the Head of Wealth and Investment Management, and that Dan Simkowitz will become Co-President of the Firm and the Head of Institutional Securities.
Mr. Gorman announced at the Firm’s 2023 annual general meeting of shareholders his intention to step down as Chief Executive Officer before the 2024 annual general meeting.
Tom Glocer, Lead Director of the Board, said, “The Board has unanimously determined that Ted Pick is the right person to lead Morgan Stanley and build on the success the Firm has achieved under James Gorman’s exceptional leadership. Ted is a strategic leader with a strong track record of building and growing our client franchise, developing and retaining talent, allocating capital with sound risk management, and carrying forward our culture and values. We believe that the Board’s rigorous and well-managed succession process, under the leadership of Dennis Nally, the Chair of our Compensation, Management Development and Succession Committee, has resulted in the appointment of an outstanding CEO while also demonstrating the strength and depth of Morgan Stanley’s leadership talent.”
“Over James’ 14 years as CEO, Morgan Stanley has been transformed into a strong and balanced financial institution with a long-term sustainable business model. We are grateful for the tremendous impact he has had on our Firm and are thankful that as Executive Chairman we will continue to benefit from his experience and critical insight.”
Dennis Nally, Chair of the Compensation, Management Development and Succession Committee of the Board, said, “After undergoing a multi-year, intentional succession process, we determined that Ted Pick is best suited to be the next CEO of Morgan Stanley. Ted has a deep knowledge of our businesses and understands what is needed to drive their growth. We are highly confident that he is the right person to lead Morgan Stanley and drive growth into the next decade.”
“The Board has been fortunate to have been able to draw from a number of excellent candidates. One of the things that sets Morgan Stanley apart is the quality and depth of our talent, and how they embody the Firm’s culture and values.”
Mr. Gorman said, “For several years I have worked with the Board to ensure an orderly succession, and I feel strongly that now is the time to step aside. The Board’s selection of Ted Pick is an outstanding one. I have worked side by side with Ted since the financial crisis and have experienced first-hand his values, intellect, passion and commitment to our people and our clients. He is battle-tested, understands complex risk, and works very effectively not just in the U.S., but around the globe. In short, he is an outstanding executive and leader.”
“I am also delighted that Andy and Dan will take on expanded leadership roles. Both are world-class executives, with outstanding values and intellect. As Co-Presidents of Morgan Stanley, Andy and Dan will be invaluable leaders in helping Ted manage the Firm. Through the transition period and my time as Executive Chairman, I will do everything I can to support Ted as our new CEO.”
Mr. Pick said, “Morgan Stanley is a storied institution, and I am deeply honored to have been chosen to lead it. We have a global diversified business with a leading client franchise. Thanks to James’ excellent leadership, our Firm is now well-positioned to succeed across market cycles, and I am excited about the opportunities for future growth. Morgan Stanley has exceptionally talented people and is home to a deep culture and abiding values. I also want to thank the Board for the confidence they have expressed in me. I look forward to working closely with the Board, Andy, Dan, the rest of the management team and all our employees to continue to serve our clients and shareholders.”
Background on Mr. Edward (Ted) Pick
Edward (Ted) Pick has served as Co-President of Morgan Stanley for the past two years. As Head of the Institutional Securities Group, he oversees Investment Banking, Equities, Fixed Income, Capital Markets and Research. He is also Co-Head of Firm Strategy.
Prior to his current role, Mr. Pick served as Global Head of Sales and Trading, engineering a turnaround of the Firm’s Fixed Income Division. As Head of Institutional Equities, he led that business to a leading global position. Mr. Pick was previously Head of Equity Capital Markets. He also helped the Firm actively raise capital during the financial crisis.
Mr. Pick joined Morgan Stanley in 1990 and was promoted to Managing Director in 2002. He is a member of the Firm’s Operating Committee (2012), Management Committee (2008) and Morgan Stanley‐MUFG Steering Committee (2013).
Mr. Pick graduated Phi Beta Kappa from Middlebury College and received an MBA from the Harvard Business School. He is a Trustee at the Metropolitan Museum of Art (the MET) serving on the MET’s Investment and Nominating & Governance Committees. Mr. Pick is Chair of the Advisory Board for the Morgan Stanley Alliance for Children’s Mental Health and a board member of the Institute of International Finance.
About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.
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Media Relations Contact: Wesley McDade, 212.761.2430
Investor Relations Contact: Leslie Bazos, 212.761.5352