James Gorman Is Not Amused

What the hell is wrong with you people?
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Unlike some other banks, Morgan Stanley knows how to take a big (but compared to the other guys, small) tax hit and still turn a profit. It’s called making a plan and sticking to it, and in case you hadn’t noticed it, that’s exactly what James Gorman & co. have done. That plan involved firing a wholelot of people, preparing to fire more people, cutting the pay of those it doesn’t fire and making its historically-awful fixed-income desk slightly lessembarrassing. And it worked.

Quarterly profit rose 14%, excluding a tax charge, as the firm’s retail brokers and investment bankers compensated for a decline in trading that has been widely felt across Wall Street….

Eight years into his tenure, Mr. Gorman has now achieved most of the numerical targets he set out in early 2016. Morgan Stanley has cut more than $1 billion in fixed expenses, cleaned up trouble spots like fixed-income trading, improved the profitability of its giant retail brokerage, and hit its goal of a 9% return on equity.

Now, that’s some pretty impressive stuff. But do they appreciate it, they being the analysts who cover Morgan Stanley? No. No they do not. And the ingrates are not afraid to say so, much to Gorman’s chagrin.

Analysts appeared disappointed by some of his new targets, repeatedly characterizing his latest wealth management goal as conservative and asking why he would not aim higher.

Gorman became exasperated at one point, responding, “Oh my God,” before going through his rationale again.

Morgan Stanley’s Brokers Push Its Profits Higher [WSJ]
Morgan Stanley tops estimates on underwriting, wealth management [Reuters]

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