Morgan Stanley's Mack: Whew, I Made It!
Updated from Thursday, Sept. 10
NEW YORK (
) --
Morgan Stanley
(MS) - Get Report
CEO John Mack did not distinguish himself in the credit crisis, but his fate sure could have been a lot worse.
It was announced Thursday that Mack
to be replaced by co-President James Gorman, who had been widely viewed as his likely successor.
Consider what happened to other Wall Street CEOs.
Bear Stearns'
Jimmy Cayne was notoriously depicted in
The Wall Street Journal
as smoking pot and playing bridge while his firm imploded.
Lehman Brothers'
Dick Fuld was heckled by protesters and subjected to endless articles about his desperate attempts to sell his art collection. Stan O'Neal of
Merrill Lynch
was embarrassed on his way out the door at Merrill Lynch by a
Journal
article about his hopeless attempts to keep up with
Goldman Sachs
(GS) - Get Report
, only to find the industry leading investment bank zigging while he zagged.
O'Neal's successor John Thain looked like a hero for a short time, selling Merrill at a premium to
Bank of America
(BAC) - Get Report
when it looked like it could go poof. Later, though, he had to hire his own PR firm after it was revealed that he squandered $35,000 worth of shareholder money on a "commode with legs."
If BofA boss Ken Lewis got a good chuckle over those stories, it didn't last long. Lewis has spent much of the year being grilled by members of Congress and New York State Attorney General Cuomo after it was revealed that he decided not to tell shareholders about mushrooming losses at Merrill.
In contrast with the embarrassments afforded these and other CEOs,
JPMorgan Chase
(JPM) - Get Report
Jamie Dimon established himself as a first-class leader, prompting suggestions that he would soon leave the banking industry for a political career. Goldman boss Lloyd Blankfein has kept his cool while raking in the usual pots of money, and doing his best to calm an angry public.
Mack had a stellar reputation in the industry going into the crisis, and it was considerably weakened after Morgan Stanley disclosed a $9.4 billion writedown of mortgage assets at the end of 2007. He saved his own skin in that mess by firing former co-president Zoe Cruz, considered the most powerful woman on Wall Street at the time.
But Morgan Stanley survived the crisis, and Mack presumably deserves some credit for that. While Lehman and Bear passed up chances to secure outside investments to bolster their balance sheets, Morgan Stanley secured a $9 billion investment from Japanese bank
Mitsubishi UFJ
(MTU)
in the critical days of the crisis, when financial firms were dropping like flies. Of course it had a little help from the U.S. government as well, but who didn't?
Mack was by most accounts a stellar salesman and motivator -- talents that were not well-suited to the catastrophe of the past two years. He has also proven that he is a survivor. It is doubtful he will ever be seen as a visionary.
Shares of Morgan Stanley closed Thursday at $28.64, up 9 cents, and added a further 10 cents in after-hours trading.
--
Written by Dan Freed in New York
.
