Morgan Stanley Moves Lay Bare Firm's Divisions
A bitter internal struggle at blue-chip Wall Street giant Morgan Stanley intensified yesterday as two top executives resigned after Chief Executive Philip Purcell moved swiftly to shore up internal support after new criticism of his leadership.
Yesterday, institutional-securities President Vikram Pandit, 48 years old, and head of institutional equities John Havens, also 48, resigned, the company said. Mr. Havens exited Morgan Stanley's block-long fifth-floor trading area at 11 a.m. Eastern time to a standing ovation, according to people familiar with the matter.
The departures followed the announcement late Monday that Stephen Crawford and Zoe Cruz were being promoted to the roles of co-presidents, making them potential successors to the financial-services concern's top job. They succeed Stephan Newhouse, whose future at Morgan Stanley remains unclear. Morgan Stanley has asked him to remain in an as-yet defined role, but he hasn't decided if he will stay.
The strife reflects a long-simmering culture clash left over from the 1997 merger of the white-shoe Morgan Stanley , a firm catering to corporate chieftains and big institutional investors, with the more down-market Dean Witter Discover & Co., a credit-card and brokerage house catering to less affluent individuals that at one time was part of retailing giant Sears, Roebuck & Co.
Mr. Purcell, who came with Dean Witter and won the chief executive's job following the deal, faces growing public opposition from many of the old-line Morgan Stanley investment bankers, including former President Robert Scott, whom Mr. Purcell edged out in the fall 2003. Eight alumni, all of whom are Morgan shareholders, released a letter the group had earlier sent to the board criticizing Mr. Purcell's leadership and urging that he be replaced.
In an interview at Morgan Stanley headquarters yesterday, Mr. Purcell defended his regime. "I am disappointed by the letter," he said. "It is horrible governance for guys gone 10 years to do this and set themselves up as a new board of directors."
Mr. Purcell said the perceived rift between the Morgan Stanley and Dean Witter wings of the company is overblown. "We are pursuing the right strategy," he said, adding that the management changes would have made been regardless of any concerns raised in the letter, and that the board has told him he has their "full support."
For now one big question is how many sympathizers Mr. Purcell's critics have within the company. Mr. Purcell said there are no additional changes planned, but speculation about additional departures to follow Messrs. Pandit and Havens swirled yesterday at Morgan Stanley and on Wall Street.
Mr. Purcell, 61, entered the financial-services arena when, as a consultant to Sears in the late 1970s, he recommended that the retailer diversify because new household formations would decline as baby boomers aged. The Purcell-led financial-services unit of Sears became so large in the 1980s that Sears was criticized for neglecting its traditional retailing business. In the early 1990s Sears split off its stake in Dean Witter Discover, and Mr. Purcell went with it.
Since the merger with Morgan Stanley , Mr. Purcell has gained a reputation for quickly jettisoning executives from the Morgan Stanley side who challenged his leadership. He turned aside a threat from former President John Mack in the late 1990s, triggering Mr. Mack's departure in 2001. He enjoys strong support from a board studded with many longtime associates, including former Sears Chief Executive Edward Brennan.
The exodus and management shuffle followed a series of soundings taken by Mr. Purcell and other directors to assess the mood of top managers after receiving the letter from the former Morgan Stanley executives March 3. In one such session, Mr. Purcell recalled yesterday, he asked Mr. Pandit his views on the letter, saying, "If we don't come together as a management team, this will go to the board." Mr. Pandit was asked for his personal support of Mr. Purcell's leadership, according to two people he briefed on the talk.
Mr. Pandit's response: "I am loyal to Morgan Stanley ." Mr. Purcell doesn't recall asking that question, but says Mr. Pandit may have used those words in the conversation.
As they weighed the alumni critique, the directors also sought additional counsel, hiring prominent Wall Street lawyer Martin Lipton to advise them on the matter. Directors discussed the letter in at least three separate meetings this month.
Mr. Purcell's critics point to the company's stock price as a test of his leadership. In the past five years, for example, Morgan Stanley's stock has fallen 34%, compared with a decline of 16% in the Standard & Poor's Corp. index of investment banks. Morgan Stanley executives note that in that period the company has suffered more than its rivals have from the decline of the technology-underwriting business, in which it ranked near the top during the Internet bubble.
Morgan Stanley stock fell yesterday on the news of the new strife, declining $1.87, or 3.4%, to $53.61 by 4 p.m. in New York Stock Exchange composite trading.
Jeff Arricale, an analyst at T. Rowe Price Group Inc., which owned 9.8 million Morgan Stanley shares at the end of 2004, said it was "a grave concern" whether directors "realize how perilous the situation is with respect to retaining the best and brightest employees in the Morgan Stanley franchise."
Mr. Crawford and Ms. Cruz had known about the reorganization plan for days. Last week, Ms. Cruz, who is one of the highest ranking women on Wall Street, was summoned from a vacation in Aspen, Colo., so Mr. Purcell could lay out the new structure.
The shake-up sent shockwaves through the company yesterday. While Mr. Pandit's former job was divided between Mr. Crawford and Ms. Cruz, Mr. Havens learned yesterday he would be succeeded by Jerker Johansson, the former head of European equities.
Mr. Purcell's leadership also drew fire in early December when Scott Sipprelle, a former Morgan Stanley capital-markets executive, declared publicly that the combination of Dean Witter and Morgan Stanley has been a failure. Mr. Sipprelle urged that the company shed the Dean Witter credit-card and brokerage house businesses, saying they had been a drag on the stock price.
He found a sympathetic ear among some Morgan Stanley alumni and staffers. But instead of joining forces with Mr. Sipprelle, executives such as former President Scott and former Chairman Parker Gilbert decided to work on their own.
In January, hundreds of current and former Morgan Stanley executives gathered at a memorial service in New York City for Richard Fisher, Morgan Stanley's beloved former chief executive. "I sat there and saw what a wonderful collection of people used to work at Morgan Stanley ," Mr. Scott said. "I couldn't help but contrast that to Morgan Stanley of today. It was an awful feeling."
A few weeks later, in mid-February, Mr. Scott and a handful of other alumni met at Mr. Gilbert's apartment. "We were sick of hearing from people that someone should do something and no one was, so we decided to do something ourselves," said Joseph Fogg, a former investment-banking chief. They quickly gathered several other supporters, and Mr. Scott began drafting the letter to directors. "We are deeply concerned that there is a crisis of confidence in the firm's leadership and governance not only the market, but, also, we fear, among employees of the firm," the letter said.
The group, which hired another top former Morgan Stanley banker, Robert Greenhill, as their financial adviser, didn't receive a response. They said a handful of directors did briefly reach out -- asking them not to leak the letter to the media.
Mr. Purcell's new lieutenants dismissed the alumni complaints. In a group interview with Mr. Purcell, Ms. Cruz and Mr. Crawford, Ms. Cruz said she disagreed with the letter's contents and disputed that the authors represented a groundswell. "Some of these people left two or three decades ago," she said. "Today this is a great firm with a great story."
Referring to the letter's signatories, Mr. Crawford added: "They got it wrong."
摩根士丹利对管理层做出调整
摩根士丹利(Morgan Stanley)宣布对管理层做出重大调整，公司首席执行长裴熙亮(Philip Purcell)任命斯蒂芬?克劳福德(Stephen Crawford)和佐依?克鲁兹(Zoe Cruz)为联席总裁，接替去职的柳浩思(Stephan Newhouse)。
摩根士丹利的此次高层调整也让其他高管的未来陷入不确定。此前几周一封公司前高管的来信引发了一系列争论，这些自称是公司重要股东的高管对裴熙亮的领导地位提出了质疑。
这封信称，公司业绩不佳的最重要原因是：作为公司首席执行长的裴熙亮的领导不利。这封信标记的日期是3月3日，写信的高管包括前总裁罗伯特?史考特(Robert Scott)和前董事长帕克?吉伯特(Parker Gilbert)。
这封信促使董事会开始关注公司的领导状况，据知情人透露，一些董事也开始和公司高层进行接触，以了解他们是否也对领导层表示不满。知情人称，这封信还引发了管理层的变动，这些变动看来将加强了裴熙亮的地位，因为他提升的都是那些忠诚于他的人。
在克鲁兹和克劳福德升职后，公司机构证券业务总裁兼首席营运长潘伟迪(Vikram S. Pandit)以及机构证券部门主管约翰?哈文斯(John P. Havens)的任职前景也将充满不确定性。
克鲁兹和克劳福德没有回复记者要求置评的电话；潘伟迪和哈文斯拒绝置评。记者未能联系到柳浩思。
