James Gorman must be feeling like the publisher who turned down JK Rowling.
Last year, the Morgan Stanley chief executive realised he had to do something about the constant feuding at the top of his bank’s powerful mergers and acquisitions division. For three long years, its two co-chief executives – Colm Kelleher and Paul Taubman had been bickering over strategy.
Mr Gorman needed to choose a single leader from between them.
It was an impossibly tough decision to make: both men were highly regarded, both pulling in bumper fees for the bank from their clients. In the end, he decided to crown London-based Mr Kelleher.
Mr Taubman, a 52-year old veteran who had been with the bank for three decades, had little option but to quit. Or, as Morgan Stanley’s official statement said: “retire.”
But retirement was far from Mr Taubman’s mind. Rather than spend the rest of his days on the golf course, he set up in business on his own and set about using his vast contacts book to drum up business.
Less than six months later, he had landed as a client Verizon: the task to advise on one of the biggest takeover transactions in history.
Analysts expect the total Verizon and Vodafone will be paying in fees will be around $500 million, of which Guggenheim – and Mr Taubman - will be getting at least $10 million.
Galling though that must be for Mr Gorman, Morgan Stanley will still be picking up many millions of dollars from the deal. The bank is, along with JPMorgan , still on the ticket as one of Verizon’s advisers and is helping raise debt to fund the deal. This is no surprise: on such a big transaction, most of Wall Street appears somewhere in the negotiations.
Mr Taubman’s fee should fund an extremely lavish retirement – but only when he decides that time has come.
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