While embattled Morgan Stanley Chairman and Chief Executive Philip Purcell plans to leave Morgan Stanley by early next year, he still has...
NEW YORK — While embattled Morgan Stanley Chairman and Chief Executive Philip Purcell plans to leave Morgan Stanley by early next year, he still has a lengthy and difficult agenda to complete: halting a stream of high-level resignations, reversing a new earnings disappointment and silencing the criticism that led to his own departure.
Acknowledging that calls for his ouster and the exodus of employees have hurt the venerable Wall Street investment bank, Purcell said yesterday he will retire as soon as a successor can be found, but no later than the company’s annual shareholder meeting next March.
News of Purcell’s planned retirement came three days after nine stock traders quit, the latest in a string of Morgan Stanley executives dissatisfied enough with the chairman’s management style to leave. The resignations, which began in late March, led a group of dissident shareholders and former executives to publicly call for Purcell’s firing and a reorganization at Morgan Stanley.
That, Purcell said, created a “sideshow” that distracted the company from its business goals.
“This morning’s announcement was very, very simple but hard,” Purcell, 61, told analysts in a conference call. “There’s been way too much attention being paid to acrimony and criticism, most of it directed at me. It’s not good for Morgan Stanley, and the best thing for me to do is, in fact, to retire.”
Investors who had sold Morgan Stanley shares as the turmoil increased were clearly relieved yesterday and bid the stock higher. Morgan Stanley rose $1 to $50.88.
Two sources close to the company, speaking on condition of anonymity, said Purcell’s departure was a joint decision by the CEO and Morgan Stanley’s board of directors. They said Friday’s resignations — from a division Purcell had highlighted as important to the firm’s future — were the deciding factor in his leaving.
Education: B.A., University of Notre Dame, 1964; M.S., London School of Economics, 1966; MBA, University of Chicago Graduate School of Business, 1967.
Experience: Chairman and chief executive officer, Morgan Stanley, 1997-present; director, AMR Corp., 2000-present; vice chairman, the New York Stock Exchange, 1995-1996; president, then chairman and CEO, Dean Witter Discover, 1985-97; senior vice president for corporate planning and administration, Sears Roebuck and Co., 1978-85; various positions, McKinsey and Co., 1967-78.
Family: married, seven sons.
Source: The Associated Press
Morgan Stanley would not comment on possible replacements. The company has retained Thomas Neff of the headhunting firm Spencer Stewart to search for qualified candidates.
“The board of directors’ decision to ask for Purcell’s retirement would seem to indicate that it wishes to put the recent management acrimony behind it,” Merrill Lynch analyst Guy Moszkowski wrote in a research note yesterday, “and retaining figures very closely associated with Purcell seems unlikely to accomplish that goal.”
In the meantime, Purcell will have his hands full. Simultaneously with his retirement announcement, the company also warned that its earnings would fall sharply below Wall Street’s estimates. Like other Wall Street firms, Morgan Stanley said difficult market conditions in the March-May period would harm second-quarter earnings, which Morgan Stanley is scheduled to release June 22.