Succession wait bites into Morgan Stanley’s stock as company studies CEO options

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Morgan Stanley draws one downgrade as its third-quarter update comes and goes with no specific news on a new chief executive

Succession issues that have swirled around some of the largest U.S. banks have heightened in regard to Morgan Stanley and weighed on its stock in the week since the marquee bank provided no updates on who its next leader will be after Chief Executive James Gorman retires.

Asked by analysts how the search is going, Gorman said, “We’re getting close,” but he provided no further details. Christopher Marinac, a bank analyst at Janney, said there’s no guarantee that Saperstein, Pick or Simkowitz will get the job. A lack of a successor has fed some volatility around the stock, he said.

“Until this firm clearly defines its leadership and purpose, it is likely to float with little direction,” Bove said. When Walter Wriston decided to retire from Citicorp, the predecessor of Citigroup Inc. C, -0.14%, two years before he exited the job in 1984, it unleashed internal rivalries among three potential successors, Bove said.

Dimon is in line to receive a $50 million bonus that was disclosed as part of his 2021 pay package and that requires him to stay on the job until 2026. The bonus is in the form of stock awards that won’t be available for sale until 2031.

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