Even though Morgan Stanley’s board has said that it stands behind Philip Purcell as CEO, the group of dissidents calling for Purcell’s ouster is digging in for a long, protracted fight for control of the company.
As Purcell flew to London—along with Zoe Cruz and Stephen Crawford, his two newest executive (and board) appointments—to assuage any nervous overseas staffers, the dogged anti-Purcell group of former executives took their case to other investors.
The Group of Eight, as they have been called, earned one victory with the resignation of Vikram Gandhi, co-head of Morgan’s global financial institutions team. The group, who used to work at Morgan, also convened a meeting with 120 institutional investors present late Wednesday night, where they pleaded their case to make former executive Bob Scott the firm’s new president. According to one attendee, the presenters “made a good case, but they didn’t leave with most people’s full endorsement.” According to The New York Post, Scott and the dissenters claimed they could boost earnings by $2 billion over the next two years. A Morgan spokesman derided the meeting as long on biographies and short on actual business strategy.
So far, the Morgan Stanley board has refused to meet with the dissident group, which isn’t surprising—most of the board was handpicked by Purcell and is considered the reason he’s unlikely to be removed as CEO. Many observers say that until the board changes its mind, Purcell, no matter how loud the dissidents yell, will remain entrenched in his job.
But that’s not stopping the dissidents, who are trying to sway investors and, most visibly, the media. The Purcell saga has been all over the New York City newspapers for more than a week now. The dissident group has won a few hearts and minds, such as Jeanne Donovan Fisher, widow of former Morgan Chairman Richard Fisher, and Orin Kramer, chairman of New Jersey’s State Investment Council, which manages the state’s pension fund.
As for Purcell, he sounds confident (although he has offered to sell the Discover Card division to placate critics). He told the Financial Times on Thursday that, “It’s over with the board in terms of strategy and it’s over in terms of leadership. We are moving on.”