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Though Wall Street has dressed down over the last few years, one man is sticking to his suits and Hermès ties: the Morgan Stanley veteran Ted Pick.
Employees knew they were getting promoted if Pick told them to wear a tie the following day, an ex-managing director recalled. Once, a rising managing director forgot to wear one, and Pick gave him the tie on his neck.
“You are a Morgan Stanley managing director. You wear a tie,” he said, according to the ex-employee.
“He’s right out of central casting,” the employee said of his ex-boss. “Say, ‘Give me a Wall Street guy,’ and they will give you Ted Pick.”
He wears a lucky red tie with tigers chasing monkeys on it. Pick once wore Gucci loafers on a fly-fishing trip in the Brazilian rainforest, the former Blackstone president Tony James told Insider with a laugh.
The 54-year-old banker, credited with transforming Morgan Stanley’s key equities and fixed-income businesses, is the front-runner to replace chief executive James Gorman, according to most ex-employees who spoke to Insider. He has spent his entire career at the bank, earning a reputation for “bleeding Morgan Stanley blue” and being the hardest-working employee, his former colleagues told Insider.
It’s not a done deal that Pick will succeed Gorman, these sources say. While Morgan Stanley currently trades at a premium among its Wall Street peers, its enviable success isn’t thanks to Pick. His group has tumbled with the market slowdown, with revenue flat from a year ago and down by 13% from last quarter. Meanwhile, the growing wealth-management arm has buoyed the bank, contributing about 60% of the bank’s profits last quarter. Another CEO contender, Andy Saperstein, leads that division, while the third, Dan Simkowitz, heads investment management.
Pick’s division is also facing a federal investigation into its block-trading business. That same unit lost nearly a billion dollars in the 2021 implosion of investment firm Archegos Capital Management. Morgan Stanley is cooperating with regulators, and Gorman, who has announced that he plans to retire by May 2024, has said that he wants the matter settled before he steps down.
With an equities background, Pick represents the bank’s legacy businesses and perhaps old-school Wall Street itself with his reverence for Morgan Stanley traditions and workaholic reputation. And the traits that make for a winning dealmaker, such as his hard-charging nature and bluntness, might not translate well as the public face of a major bank.
“I always enjoyed his company, but look, he grew up on the Street. He’s a lot more like John Mack than James Gorman in terms of style,” an ex-managing director said, referring to Gorman’s sharp-elbowed predecessor.
None of the nine former colleagues who spoke to Insider would speak on the record, even those who had largely positive things to say.
“It’s the Ted factor,” explained one of his former superiors.
His frankness has earned him some admirers, including James, the ex-Blackstone executive. He chose Pick to lead the private-equity giant’s initial public offering in 2007 because he was the “smartest,” “most direct,” and honest banker they talked to.
“He just didn’t pull punches at all,” the billionaire investor, who now counts Pick as a friend, said. “It’s easy to fall in love with your own line of patter. He’d call you out on that in a heartbeat and say, ‘That’s not gonna fly.'”
Over his 30-year career, news outlets have made headlines of Pick’s old fondness for expletives. He rarely speaks to the press and declined to be interviewed for this story.
“Do know that I’ve come a long way on the curse words. A long way!” he did tell Insider via email, signed off with “best/tp.”
Succession has traditionally been a bloody sport on Wall Street, and Morgan Stanley is no exception. In 2001, Phil Purcell became CEO after winning a power struggle with Mack, who was nicknamed “Mack the Knife” for his penchant for layoffs. Purcell only lasted four years in the C-suite, retiring after protests from investors, the board of directors, and employees, before Mack took over.
Gorman, an alum of McKinsey and Merrill Lynch, took the reins in 2010. Infighting continued under his tenure, with a notable tussle between Paul Taubman and Colm Kelleher, coheads of the mergers-and-acquisitions division.
At least in the public eye, the competition to succeed Gorman has been cordial. Pick gets along with his fellow contenders. His main competition is Saperstein, who has been Gorman’s protégé since they both worked at McKinsey in the 1990s.
“Andy’s done an amazing job, and wealth management is the story of Morgan Stanley,” an analyst who spoke on the condition of anonymity out of fear of reprisal from Pick said. “I think there are lots of investors that think it would be weird for the next CEO not to be the wealth-management person, and yet Ted’s still there and done a very good job in the investment bank.”
Over an Italian dinner, Pick and Saperstein agreed to play fair after they were both promoted to copresidents two years ago. But Pick has been known for relentless ambition long before Gorman started the horse race in May with his retirement announcement.
“Winning in this business is by small margins,” Pick told Euromoney in 2021, “so you have to want to win.”
Pick, who joined Morgan Stanley in 1990 after graduating from Middlebury College, got his foot in the door thanks to a classmate who was the son of the ex-Morgan Stanley chair S. Parker Gilbert. He was the last hire of his analyst class but quickly earned a reputation as a hardworking “deal junkie,” one of his former superiors said.
“I would say Ted was a star from day one. I can’t think of a time when Ted was not, come the end of the year, evaluated as one of the best people,” he said. “He’s a very ambitious guy, and he doesn’t like to fail at things.”
Pick started on the corporate-finance desk before moving to equity-capital markets. He worked on thorny deals such as the privatization of the state-owned China Construction Bank and Google’s auction-style IPO. Another notch on his belt: taking one of KKR’s closed-end funds public, which was a novelty at the time.
“He’s the guy in the middle of a really tough deal,” the former superior said. “Ted is working the phones, he’s talking, he’s in communication with the investors who say no, and he understands it. He’s just really good at closing and intense about that.”
Aside from getting a MBA from Harvard Business School, Pick rose the ranks, becoming the head of global-equity capital markets in 2005. During the financial crisis, he helped arrange a capital injection from Japan’s largest bank, Mitsubishi UFJ, when Morgan Stanley was on the brink of collapse, and coordinate the buyback of warrants to pay back the government after the bailout.
“John Mack would come by, and Ted, with John sitting next to him, would run quite incredibly deftly the firm’s share-repurchase program that arguably kept the firm in business,” a former colleague said. “We had very little capital with which to work with and so there was a really brilliant execution of sort of playing poker, if you will, with the markets.”
In late 2009, he received another problem to solve: a struggling global-equities business that ranked sixth on Wall Street. As cohead, he met with more than 400 clients to win them back and invested hundreds of millions of dollars in electronic trading.
“He was very early in recognizing that the business was switching and changing to a much more tech-driven business,” Christian Bolu, an analyst at Autonomous Research, told Insider. “He made it the best business in equities on the Street and, importantly, made it very consistent.”
He’s just really good at closing and intense about that.
Pick quickly made an impression on Gorman, who was then a newly minted CEO. He persuaded Gorman to cut his Anguilla vacation short to fly with him to Beijing to pitch the Agricultural Bank of China. On the flight, Pick admitted that he had lied about other CEOs coming to pitch their services and that Gorman would only have to speak for three minutes of the presentation. The bet paid off: Gorman was a good sport, and Morgan Stanley was one of the lead underwriters on the then-record $22 billion offering.
Pick was obsessed with overtaking Goldman Sachs as No. 1 in equities, and in 2011, his division succeeded in doing that. Yet he warned his troops to stay vigilant against the rival bank, which he always referred to as “the guys downtown,” according to one former banker at Morgan Stanley, which is in midtown Manhattan.
“He said, ‘We beat them, but you bet the guys downtown are looking at all the things we are doing,'” the former managing director told Insider.
In 2015, Pick was saddled with another problem child: the fixed-income business. He promptly laid off almost a quarter of the division and prioritized credit, rates, and foreign exchange.
“Why not 10%? Why not 40%? Twenty-five percent has the magic of being a number that clearly sends a message to the market that we’re listening, but equally and important a message that we’re in it for the long term,” he said of the decision at a conference.
After three decades on Wall Street, Pick has a relatively clean sheet — but not spotless. The bank lost $911 million when it had to dump stocks linked to the family office Archegos Capital Management in spring 2021.
The same division, which falls under Pick’s purview, is under federal investigation over its block-trading practices. The probe concerns whether employees violated securities regulations by sharing or using information with clients prior to trading large numbers of shares.
Those bullish on Pick’s prospects believe the block-trade investigation is the only thing standing between him and the CEO’s office. Two Morgan Stanley bankers departed in the wake of these scandals, and there are no indications that Pick or the bank have been implicated in wrongdoing. But it’s possible that he could pay the price for these missteps, an analyst told Insider.
“In past administrations, it wouldn’t have been the biggest surprise if a regulator said, ‘Sorry, I need a bigger head than the person who ran block trading or equity-capital markets to be on the hook for this.”
Morgan Stanley declined to comment on the investigation. The bank disclosed in May that it was cooperating with the investigation and was “in discussions regarding potential resolution of the investigations” with regulators.
At first glance, Pick has the perfect pedigree to lead Morgan Stanley.
Born in New York City, he spent several years of childhood in Caracas, Venezuela, where his father, Pablo, worked in petrochemicals. The family returned to the States when Pick was 8, settled down in Brookville, a tony Long Island suburb, and Pablo became an investor.
He married Betsey Kittenplan, the daughter of a Smith Barney vice president, at the fabled Plaza Hotel. His mother is an archivist at the Metropolitan Museum of Art, where Pick is now a trustee. James cochairs the board, which counts the billionaire venture-capitalist Jim Breyer and Anna Wintour, the longtime editor in chief of Vogue, among its trustees.
Genteel backstory aside, he has earned a reputation for an edgy sense of humor and his aforementioned fondness for cursing. Tales abound such as Pick launching into a “blue-streaked tirade” over a remark from a Goldman Sachs president, John Mack pranking Pick by having the compliance department pretend his emails were flagged for excessive profanity, and even Pick telling Blackstone executives in the early 2000s that they were “full of shit.”
But he has sanded down his edges since his trader days and seldom curses now, ex-colleagues and friends say. James told Insider that Pick has become more “refined” since that meeting.
His allies have described him as a quick-witted family man who loves sushi and the New York Rangers.
“I think there is a softer side to Ted. There is the perspective that he curses and can be jarring or intense. But I’ve known him personally,” a former colleague said. “People want to put people in a box, but I think he’s very much the complete picture.”
Before the pandemic, Pick forbade his managing directors from using out-of-office emails.
“His attitude was, ‘I pay you guys well enough, and I have expectations,'” an ex-managing director recalled.
He still doesn’t use them, but he has relaxed his stance on how direct reports handle client emails when they are on vacation.
Nobody outworks that guy, and I thought I worked awfully hard.
As for his rivalry with Goldman Sachs, he is less adversarial toward “the guys downtown” as the gap between Morgan Stanley and Goldman Sachs has narrowed. It helps that he is friendly with John Waldron, who became Goldman Sach’s chief operating officer in 2022.
Pick tended to play devil’s advocate, unafraid to disagree with more senior executives even in his early days on the bank’s management committee, three former colleagues with knowledge of the meetings said. When it comes to meetings with the Met’s investment board, he comes across as more measured.
“A lot of people speak often, but not valuably. I’m not talking specifically about the investment committee but in any setting,” Howard Marks, the billionaire founder of Oaktree Capital Management and the chair emeritus of the committee, said. “On the rare occasions when he speaks, what he says carries more weight than most, and that’s a trait I value highly.”
Though Pick has refined his persona, even his admirers told Insider that he is still a hard charger and a straight shooter.
One former employee compared him to the notoriously tough-talking NFL coach Bill Parcells: “He knows how to challenge people. He knows which people he needs to give ‘atta boy’ to in order to do a good job and who needs a kick in the pants, some fear.”
Pick is also a classic workaholic, former colleagues said.
“Nobody outworks that guy, and I thought I worked awfully hard,” a former senior executive said. “He is 24/7 from back then to now.”
His honesty has inspired loyalty and respect from his peers but can be intimidating, some said. He is so devoted to Morgan Stanley that he sometimes refused to speak to people who departed the bank.
Several ex-colleagues accused Pick of being political, citing his drive to be at the front and center of major deals and work with the most prominent bankers.
“I liked Ted, but I also knew Ted had his own agendas,” the ex-superior added.
Gorman is also known for his competitive spirit, growing up as one of 10 children, but he is decidedly more approachable and press-friendly than Pick. But running one of the world’s largest banks will require being its public face.
“Don’t forget the CEO of the company is not only the strategist but also the chief communicator for the firm,” a former managing director said.
On the other hand, Saperstein was the subject of a Bloomberg feature in April that hailed him as “one to watch.” He was painted as a Staten Island success story and a down-to-earth Disney World enthusiast.
Some Wall Street CEOs, such as Brian Moynihan, aren’t well-known personalities, but scrutiny is part of the job description. The press follows — literally — every move of David Solomon, the CEO of Goldman Sachs, such as his private-jet travels. Investors watch Jamie Dimon’s health closely, with some of the JPMorgan leader’s disclosures preceding dips in the bank’s stock.
Even his supporters have acknowledged that Pick is press shy. “He is such a private guy,” said a longtime client who counts him as a friend.
Time and again, Pick has shown his ability to fix problems, but he made his name on the institutional side of Morgan Stanley. Gorman’s legacy lies in building the bank’s prowess in wealth management, a steadier business, with the acquisitions of E-Trade and Eaton Vance.
“What James has been able to do, it’s hard to be innovative in a large Wall Street firm,” an ex-managing director said. “Ted’s a super-creative person, and he’s turned around the fixed-income business after leading the equities business. But a lot of those are legacy businesses, you know, leaning on the same pipes.”
However, Gorman has said that the contenders’ leadership qualities, not the performance of their respective business channels, is the deciding factor. And the predictable nature of wealth management could make Pick’s job easier.
“In some ways, the strategic path for wealth management has already been set,” Bolu said. “It is really more about execution going forward.”
The institutional side of the business is more rocky, such as in the Archegos and block-trade sagas, and Pick’s experience with equities and risk management would come in handy.
“They’re all talented, talented individuals, but I think Ted has the ability to run the most complex part of the business where you’re going to make or break,” James of Blackstone said. “That’s where you’ve got the biggest landmines and also a lot of upside.”
Anointing Pick would be a return to form for Morgan Stanley. Gorman is a practiced wealth manager and only worked at the bank for four years until becoming CEO. While Pick is no “Mack the Knife” — a larger-than-life banker and aggressive risk taker — he and Gorman’s predecessor are veterans of the bank and are traders at heart. Gorman, whom many former employees describe as a “retail guy,” once told investment-bank employees that if they were unhappy with pay cuts, to “just leave.”
Pick, a culture carrier at Morgan Stanley, is steeped in tradition in more ways than one. He brought back a tradition of welcoming new managing directors with a handshake in his office before they walked down the hallway to applause from their colleagues.
At a bank that prizes loyalty perhaps more than any of its peers, Pick’s old-school ways may be welcome. Despite enjoying the stock price gains under Gorman’s reign, plenty of longtime employees want another dyed-in-the-wool Morgan Stanley loyalist, according to a former senior executive.
“You can dislike Pick, and people do,” he said. “But he’s got visceral loyalty.”
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