Morgan Stanley Said to Expand Operating Committee to 16Michael J. Moore
Morgan Stanley, owner of the world’s largest brokerage, named four executives to its operating committee, including fixed-income trading co-heads Michael Heaney and Robert Rooney, a person briefed on the move said.
Shelley O’Connor, who runs the New York-based firm’s private bank, and Andy Saperstein, head of the brokerage’s investment products and services unit, were also added to the committee, bringing it to 16 members, said the person, who asked to remain anonymous because the decision wasn’t yet public.
Chief Executive Officer James Gorman, 55, has signaled his commitment to the fixed-income trading unit as some rivals have exited large parts of the business. Gorman has also identified higher profit margins at the brokerage and an increase in lending to clients through the private bank as major parts of his strategy to boost Morgan Stanley’s return on equity.
“These appointments reflect the importance to the firm of the businesses these individuals run and the leadership role each plays in driving our firm strategy and our future success,” Gorman wrote in an internal memo, according to the person.
Morgan Stanley’s operating committee is the highest group of managers at the bank, helping Gorman set its strategy. The firm said in its proxy letter to investors that it views the committee’s members “as highly talented executives capable of rotating among the leadership positions of our businesses and key functions.”
The bank last year raised the base salary to at least $1 million for all the committee members, who must must agree not to sell 75 percent of equity awards granted during their service on the committee.
Heaney and Rooney became co-heads of the fixed-income unit last year after Ken deRegt left to join hedge-fund firm Canarsie Capital Group. Morgan Stanley has set a goal of a 10 percent return on equity for that business, and Chief Financial Officer Ruth Porat said last week that the unit offers opportunities for profit beyond that target.
O’Connor, 53, has run the private bank for more than three years, helping the company boost lending to its 4 million brokerage clients. Morgan Stanley has said it wants 10 percent of its customers to have loans with the firm, up from the current 5 percent. Gorman said the company can generate about 3 percent yield from lending its rising deposits, compared with the 0.3 percent it gets from investing in short-term securities.
Saperstein, 47, who followed Gorman to Morgan Stanley from Merrill Lynch & Co. in 2006, took over the investment products and services group in 2012. He has sought to boost connections between the brokerage and the investment bank, and Morgan Stanley said last year it had 35 such initiatives.