Gorman got tough to turn Morgan Stanley around

It was a stickup, Wall Street style.

The New York Times reports that with bonus season fast approaching, Jack DiMaio, the top bond trader at Morgan Stanley, wanted more money for his guys. Tens of millions more.

So, as traders had always done, he marched into the boss’s office and asked for it. But it was 2010 and times had changed, and this chief executive, James P. Gorman, was adamant: Morgan Stanley was done giving in to demands for big bonuses when earnings were thin, and he didn’t bother to soften the rejection with the kind of pep talk managers usually offer when cash can’t be found.

DiMaio soon left the firm — but not that many other traders followed, because on post-crisis Wall Street, there weren’t as many places to go. And Gorman’s message that he was more concerned about making the numbers work than simply keeping the troops happy quickly filtered down to the trading floor.

Now, nearly four years after this showdown, the numbers are working very well for Gorman and Morgan Stanley. But this white-shoe investment bank, which nearly went under in 2008, is now a very different place.

To access the complete New York Times article hit the link below:

James Gorman of Morgan Stanley, Going Against Type

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