John Mack will step down as chairman of Morgan Stanley (NYSE: Morgan Stanley) and retire at the end of the year, the company stated, bringing to an end a high-profile four-decade career on Wall Street.
The current president and chief executive, James P. Gorman, will become also become chairman.
Investors obviously applauded the move, sending Morgan Stanley shares up 7.2 percent in Thursday’s trading.
Gorman praised Mack for “the leadership he provided in guiding Morgan Stanley through a financial crisis that claimed many of our peers".
Mack, who served as the company’s chief executive from 2005 to 2009, was widely hailed for saving Morgan Stanley during the height of the global financial crisis when he engineered a $9 billion investment from Mitsubishi UFJ Financial Group of Japan.
He was often known as ‘Mack the Knife’ for his talent at cutting costs.
Mack, the children of Lebanese immigrants started at the bank in the early 1970s as a bond salesman, eventually becoming president of Morgan Stanley Dean Witter.
In 2001, following a clash with chief executive Phillip Purcell, Mack left the company for Credit Suisse, where he became co-chief executive. He also worked at Merrill Lynch and Pequot Capital Management.
The board at Morgan Stanley asked for Mack to return in 2005.
Initially, he helped to increase profits during his initial years at the helm of Morgan Stanley, buoyed by the surging housing market. However, in the wake of the global credit crash, like many other banks, Morgan Stanley shares and profits dwindled – something Mack was also blamed for.
Indeed, from May 2007 to November 2008, Morgan Stanley shares plunged almost 84 percent in value. Since then, the stock has had a lackluster performance.
Mack, 66, is expected to serve in an advisory capacity for Morgan Stanley and also join the staff of Republican Presidential candidate Jon Huntsman as an economic adviser.