‘Huge waste’: Morgan Stanley CEO tears up annual in-person meetings

Morgan Stanley CEO James Gorman called in-person annual meetings “a huge waste of time and money.” During the pandemic, companies abandoned gatherings in favor of a virtual format.

Brendon Thorne/Bloomberg

James Gorman, with one foot out after 13 years as Morgan Stanley boss, invoked the license to speak out by offering two corporate governance ideas that could irritate many shareholders.

First, Gorman said on Tuesday that when he becomes executive chairman – a role he will assume when he go down as CEO – he has no plans to resume in-person shareholder meetings. Such events were halted at Morgan Stanley and across the industry at the start of the pandemic.

Even before COVID-19 forced businesses to switch to a virtual format, Gorman was critical of such meetings. On Tuesday, he said “more security people” attend annual meetings in person than shareholders.

“So let’s be honest,” Gorman told analysts on the company’s second-quarter earnings call. “It was a huge waste of time and money, and while one or two people might like to ask a question in person, I just don’t think it’s a good use of time and money. “

Gorman also said that if he were the “god of finance” he would ditch quarterly earnings reports in favor of a semi-annual report. As a public company, Morgan Stanley must report quarterly in accordance with Securities and Exchange Commission regulations.

In 2018, then-President Trump asked the SEC to study a semi-annual reporting system after talking to a CEO who suggested the change. Trump argued that reporting less frequently would provide greater flexibility and save money.

Two years earlier, a group of business leaders led by JPMorgan Chase CEO Jamie Dimon called to remove quarterly earnings forecastsclaiming that this leads to focusing on short-term profits.

Gorman, who has been at the helm of Morgan Stanley since early 2010, announced his intention to retire as CEO at the company’s annual meeting in May. The Board of Directors has identified three internal candidates to succeed him.

And while the company hasn’t publicly identified those nominees, Ted Pick and Andy Saperstein, the company’s co-chairmen, and Dan Simkowitz, head of the investment management unit, are widely seen as the most likely successors. Gorman.

Gorman said Tuesday that the exact timing of the CEO change has not been established, but he expects it to happen before the investment bank’s next annual meeting in May 2024.

Part of figuring out when exactly to quit involves completing or advancing certain tasks and projects, Gorman said. Those efforts include determining how Morgan Stanley will be affected by the latest Basel III capital rules, which are expected to be unveiled next week.

“There are a few things that I think, given my tenure, that I can probably do that will help the new CEO get off to a good start, and that’s my intention,” Gorman said. “I want someone to do this job…better than I’ve done for the next few years and thrive, and the best way to help them is to get them started on the right foot.”