Insider Today: Morgan Stanley's next CEO

View in browser

August 1, 2023

Hiya! If you’re just getting back from a beach vacation and you’re starting to feel a little out of it, you’re not alone. Some people feel physically better when they get to spend time in salt water, a phenomenon known as thalassotherapy.

Speaking of beaches, August is the start of vacation season for much of Wall Street (and seemingly all of Europe). But that’s probably not the case for one bank executive vying for the top job at his firm.

What’s on deck:

Amazon formed a new group focusing on the “most ambitious” AI models.
Loads of people are using ChatGPT at work, even if they aren’t supposed to.
Opting for a state university over an Ivy won’t affect your future earnings as much as you might think.

But first, who’s next at Morgan Stanley?

If this was forwarded to you, sign up here.

THE BIG STORY

CEO-in-waiting

Arantza Pena Popo/Insider

When it comes to Morgan Stanley’s next CEO, is Ted Pick … the pick?

Terrible puns aside, succession plans at the Wall Street bank are top of mind after James Gorman, the firm’s CEO, in May announced plans to step down within 12 months.

Pick, who serves as Morgan Stanley’s copresident, head of institutional securities, and cohead of corporate strategy, has long been considered a front-runner for the role.

The Morgan Stanley lifer, with his Hermès ties and hard-charging personality, represents the prototypical banker, Hayley Cuccinello writes in her profile of Pick.

“Say, ‘Give me a Wall Street guy,’ and they will give you Ted Pick,” one of Pick’s former employees told Hayley.

But just because Pick can play the part doesn’t mean he’s the only one suited for it.

Pick was one of three Morgan Stanley executives — along with his fellow copresident Andy Saperstein and Dan Simkowitz, the head of investment management — named by the bank’s board as candidates.

Saperstein, who leads Morgan Stanley’s booming wealth-management business, represents a real threat to Pick’s bid for the throne, which seemed his to lose as little as a five years ago. Wealth management accounted for roughly 60% of the bank’s profits last quarter.

Meanwhile, Pick’s division is facing a federal investigation and lost nearly a billion dollars in 2021 as a result of the implosion of the investment firm Archegos Capital.

In many ways, the choice between Pick and Saperstein is representative of a larger trend on Wall Street and could serve as a pulse check on the wider industry.

Volatile and unpredictable businesses, like trading, are falling out of favor. Units with more reliable revenues, like wealth management, are in vogue.

So if Saperstein were to land the top job, it could be an indication of the changing tides on Wall Street.

But if Pick reigns supreme, it just goes to show that old habits die hard on the Street.

READ ON

TOP READS

3 things in markets

Jason DeCrow/ASSOCIATED PRESS

A late rally to close out a strong month for US stocks. The Dow Jones Industrial Average, Nasdaq, and S&P 500 all finished July up more than 3%.
China is looking to give its economy a boost, but it might not be enough. The country announced stimulus measures targeting the automobile, real estate, and services sectors. But some analysts think the plan falls short of turbo-charging growth.
Some high-quality stocks to bet on amid a volatile earnings season. Comcast, T-Mobile US, and General Motors were among 15 stocks that Morgan Stanley highlighted as companies with stable profits that would continue to outperform.

3 things in tech

Amazon CEO Andy Jassy. Mike Blake/Reuters

Leaked email: Amazon’s new group to work on the “most ambitious” AI models. Rohit Prasad, the head of this newly created group, was promoted to now directly report to CEO Andy Jassy. Jassy now has 16 direct reports, and they reflect the rapidly changing business environment.
Apple bets big on an obscure Chinese manufacturer. The iPhone maker reportedly entrusted the Shenzhen-based Luxshare to assemble its Vision Pro mixed-reality goggles. The leap of faith has been attributed to Luxshare’s willingness to test “crazy” ideas.
Elon Musk plans to keep Twitter (er, X) in San Francisco. Despite Musk’s “doom spiral” characterization of the city, he said the HQ wouldn’t relocate. And speaking of the HQ, its new X sign appears to have been removed from the building’s rooftop.

3 things in business

Warner Bros. Discovery US ad sales chief Jon Steinlauf. Mike Coppola/Getty Images for Warner Bros. Discovery

Leaked memo: Warner Bros. Discovery shake-up. The US advertising-sales chief Jon Steinlauf sent the staff an internal message explaining the changes. Its restructuring makes the WBD system more similar to other media major media companies.
TikTok shared a nine-page document to get people to sell goods in its in-app shopping feature. The company believes “shoppertainment” (a combo of shopping and entertainment) is the future of commerce. TikTok reportedly wants to hit $20 billion in merchandise sales this year.
CheatGPT: The hidden wave of employees secretly using ChatGPT. Corporate America’s reaction to the generative-AI chatbot has been mixed. But among employees, it’s become a quiet cheat code to do their work faster and better.

IN OTHER NEWS

PE, top state universities, & more

Allegations of fraud against Harvard’s Francesca Gino highlight a bigger issue in academics. The dishonesty expert’s downfall could be the first of many in the field of behavioral science, where insiders say some professors are in mad dash to publish the next “Freakonomics.”
Botox by PE. On the hunt for consumer-facing deals, private-equity firms are investing in providers of treatments like laser hair removal, body contouring, and filler injections.
No Ivy? No problem. A new study found the future earnings of students at nine state universities, including Ohio State and Florida, were only slightly behind that of their Ivy League peers.
Jefferies CEO: Don’t let the haters get you down. Richard Handler says naysayers can actually be a source of “motivation.”
“Pee-wee Herman” creator Paul Reubens dead at 70. Reubens, who starred in Tim Burton’s cult classic “Pee-wee’s Big Adventure,” had been privately dealing with cancer for years.
Most Americans weren’t affected by the Fed’s rate hikes. In the past few decades, the percentage of floating-rate debts has decreased. Most household debt is probably locked into lower, fixed rates instead.
"Euphoria" actor Angus Cloud has died at 25. Cloud rose to pop-culture-icon status in his role in the show as Fezco, a drug dealer with a heart of gold. His family told Insider that his death came as he was struggling with the loss of his father.

WHAT'S HAPPENING TODAY

Earnings, supermoon, & Women’s World Cup

Earnings on deck today: Pinterest, Pfizer, Starbucks, Uber, and other major companies. See our calendar here.
Supermoon (aka Sturgeon Moon) tonight. The moon will appear 14% bigger and 30% brighter, and it’s one of two supermoons this year.
The FIFA Women’s World Cup continues. The US narrowly advanced after drawing Portugal, 0-0, while the Netherlands put together a 7-0 victory against Vietnam. A bit later today, China plays England and Haiti takes on Denmark. Here’s how to watch free online.

LAST LOOK

Sun-filled home

Peter Bohler for CAST Architecture

Photos of a Seattle tiny home that was designed to maximize sunlight. The 636-square-foot unit costs $212,500 from start to finish.

P.S. We’re working behind the scenes to revamp Insider Today. Got some thoughts you want to share? Fill out our quick, five-question survey.

Get in touch: insidertoday@insider.com.

Email sent to: you

Manage your email preferences | Unsubscribe | Terms of Service | Privacy Policy

Insider Today: Morgan Stanley's next CEO

Older messages

Insider Today: A different recession's here

Insider Today: Zuck’s wild transformation

Insider Today: 4-day week works

Insider Today: High earners head west

Insider Today: America isn’t ready

You Might Also Like

This pattern has averaged an 85% return per year since 2020

Longreads + Open Thread

Call me Neo, cause I just plugged into the Matrix

🪙 Big on bitcoin

In times of transition, investors search for reliable investments, like this…

Lutnick Goes to Washington

💔 Google's big breakup

A brand new opportunity in the stock market revealed

🏦 The problem with “stress-saving”

John's Take 11-21-24 Climaxes