Morgan Stanley rebels call for Purcell to go

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The Independent Online

The group of eight rebel shareholders in Morgan Stanley called yesterday for Philip Purcell, the chief executive of the investment bank, to be replaced by one of their number, Robert Scott, a former chief operating officer at the bank.

The group of eight rebel shareholders in Morgan Stanley called yesterday for Philip Purcell, the chief executive of the investment bank, to be replaced by one of their number, Robert Scott, a former chief operating officer at the bank.

The move marked the latest in an bloody battle between the eight, all former senior employees of Morgan Stanley, and Mr Purcell, who is fighting their calls for him to step down.

In a detailed statement, the group said it had been asked by the bank's institutional investors to lay out plans for Morgan Stanley. Their plan is to focus on boosting the banks' performance and to change its bylaws to boost the amount of checks and balances on the chief executive.

The group said: "We propose that the board of directors immediately replace Philip J. Purcell with Robert G. Scott as CEO. Second, we propose that the board of directors name a new non-executive chairman of the board with substantial financial experience."

They added: "Third, we propose the establishment of an office of the president to include senior Morgan Stanley executives."

The move was a blow to Mr Purcell, who has been trying to shore up support among major investors and clients, and who bowed to shareholder pressure on Monday by agreeing to sell the Discover credit card business to try to boost the bank's performance and share price.

Mr Scott, who worked for Morgan Stanley for 33 years, said his first priority if was successful in ousting Mr Purcell would be to bring back the "extraordinarily talented individuals who have left the firm in recent times, including Stephan Newhouse, Vikram Pandit, John Havens".

Mr Purcell replaced Mr Newhouse as president of the bank last week with two long-serving colleagues viewed to be loyal to him - Zoe Cruz and Stephan Crawford. Vikram Pandit, the head of sales, investment banking and trading, and Mr Havens, the head of equities, left on the back of the sudden shake-up.

Ms Cruz and Mr Crawford have now also become members of Morgan Stanley's board, which is likely to increase support for Mr Purcell among the bank's directors. The bank's by-laws state that 75 per cent of directors would have to vote against him to try to force him out of his job.

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