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Purcell Gets Vote of Confidence at Morgan Stanley

The board affirms its commitment to the CEO and rejects calls for a breakup.
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Phil Purcell received another vote of confidence at

Morgan Stanley

(MWD)

.

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Directors of the divided investment bank voted Sunday to reiterate their commitment to Purcell as the company's chief executive despite calls from dissident shareholders for his ouster. The board also rejected any corporate reorganization beyond its previously announced spinoff of Discover Card.

"We have said consistently that management enjoys the confidence of the board, and we reiterate that commitment today," the directors said in a statement. "We have thoroughly examined all of the issues surrounding leadership, structure and strategy and conclude that it is in the best interest of shareholders that we support management and not split up the company."

Shares of Morgan Stanley rose nearly 5% Friday on a report that the board planned to meet, feeding speculation about the future of both Purcell and the firm. The shares have been volatile since a group of dissident shareholders, including former executives of the firm, started pushing for Purcell's ouster and a split-up of the company.

In a mild concession to the dissidents, Morgan Stanley's board announced a series of corporate governance revisions late Sunday, including the de-staggering of board terms, the creation of a lead director position, plans to name of two additional outside directors, and the elimination of rules requiring a super-majority of board votes to remove the CEO.

Shares of Morgan Stanley closed Friday up $2.18, or 4.6%, at $52.62.