There was a two-year span not long ago when Morgan Stanley’s James Gorman overtook JPMorgan Chase’s Jamie Dimon as banking’s top-paid CEO. Dimon has since taken back his title, and Gorman has announced he’ll step down from his bank’s top post in the next year.
But before he does, he may well take something else Dimon can claim. Historically, the JPMorgan boss has been the undisputed king of unfiltered talk.
Exhibit A: When asked in late 2020 which segment of JPMorgan Chase’s business would benefit from an acquisition, Dimon said, “Asset management, my line is open.”
“If you’ve got brilliant ideas, give me a call,” he said. “And if you’re a competitor investment bank and you bring the idea, you get the fee.”
Exhibit B: At a conference last year, Dimon railed against institutional investors who vote based on recommendations from proxy advisers such as Glass Lewis and Institutional Shareholder Services.
“If that’s how you vote, shame on you. I mean seriously, you should be embarrassed, OK? And do your own homework,” Dimon said. (At the time, JPMorgan shareholders rejected a compensation plan that included $52.6 million in one-time options for Dimon. The bank granted him the payout anyway.)
Exhibit C: At the same conference, Dimon blasted lawmakers who labeled him as “woke” because of JPMorgan’s step-back in financing fossil-fuel companies and firearms manufacturers.
“Any senator or congressman who says that’s woke, they’re not thinking clearly because I want to win in the marketplace,” Dimon said. “When we wake up in the morning, what we give a s--- about is serving customers, earning their respect, earning their repeat business.”
These outbursts, oddly enough, often have come at times of year that are prone to weather extremes, so maybe blame a heat dome — because Gorman, no fewer than four times Tuesday, set his filter aside.
1. He called in-person shareholder meetings “an enormous waste of time and money” during Morgan Stanley’s earnings call Tuesday.
“While one or two people might like asking a question in person, I just don't think it's a good use of time and money,” Gorman said, according to American Banker.
He said he has no plans to resume in-person shareholder meetings when he becomes the bank’s executive chair — presumably in 2024, adding that the meetings are better attended by security personnel than by actual shareholders.
2. Gorman said he would dispatch with quarterly earnings reports, favoring updates every six months instead. Securities and Exchange Commission rules dictate, however, that Morgan Stanley, as a public company must report every three months.
Gorman wouldn’t be the first to voice resistance to the quarterly cadence. Former President Donald Trump asked the SEC in 2018 to study the consequences of six-month reporting periods.
Dimon, of JPMorgan Chase, and other CEOs in 2016 sought to do away with quarterly earnings check-ins, asserting they place too much emphasis on short-term gains.
3. Gorman is no stranger to focusing on the long term, predicting Tuesday that Morgan Stanley could surpass $20 trillion in assets under management under its next CEO.
“I know people are going to call me crazy, and I know it’s the end of my tenure and I get to do this kind of stuff,” he said, according to the Financial Times. “But if you did 5% [compounding] over 14 years, you end up at $20 trillion.”
The 14-year figure is a reference to Gorman’s own tenure as CEO, a role he assumed in 2010. Also for reference, the bank’s assets under management now stand at $6.3 trillion. Gorman’s prediction supposes that number triples by 2038.
4. This is not to say Gorman ever lost sight of the short term. Morgan Stanley’s wealth management unit, which would be responsible for bringing the $20 trillion moonshot to fruition, reported $6.7 billion in revenue over the second quarter Tuesday. That’s up 16% from a year ago. The business took in $89.5 billion in net new assets — nearly 50% more than the $60.3 billion analysts had expected, according to the Financial Times.
Apart from that, Morgan Stanley shares jumped 6.5% on the day, prompting Gorman to retort: “Isn’t this the moment where you drop the mic?”
“I think I should retire today,” Gorman said in jest, according to Bloomberg.
Yup, you’ve got ‘retirement filter’
Gorman’s impending transition out of the C-suite undoubtedly serves as the specter fueling his frankness.
Not that Gorman had previously been shy to speak his mind. When it became clear that Morgan Stanley would reduce its headcount in December, Gorman told Reuters: “Some people are going to be let go … That’s what you do after many years of growth.”
He doubled down on headcount expendability Tuesday, telling Bloomberg, “One of the beauties of this business is it’s very scale-driven ... If you do a few more trades, you don’t need more people to do it for the same clients.”
On the flip side, he’s been just as honest with regard to job security. Gorman was the first CEO from the six largest U.S. banks to pledge not to cut jobs in 2020, at the onset of the COVID-19 pandemic. “I am sure some, if not many, of you are worried about your jobs,” he wrote in a memo. “While long term we can’t be sure how this will play out … aside from a performance issue or a breach of the Code of Conduct, your jobs are secure.”
Gorman has also been quick to levy a veiled threat in connection with a return to the office after the worst of the pandemic had passed.
“If you can go into a restaurant in New York City, you can come into the office and we want you in the office,” Gorman said in 2021. “[By] Labor Day, I’ll be very disappointed if people haven’t found their way into the office and then we’ll have a different kind of conversation.”
Months later, as another variant of the virus spread, Gorman was quick with a mea culpa: “I thought we would have been out of it past Labor Day and we’re not,” he said. “I was wrong on this.
“Everybody’s still finding their way and then you get the omicron variant; who knows, we’ll have pi, we’ll have theta and epsilon, and we’ll eventually run out letters of the alphabet … It’s continuing to be an issue.”