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Purcell out at Morgan Stanley

Associated Press

NEW YORK — While embattled Morgan Stanley Chairman and Chief Executive Philip J. Purcell plans to leave Morgan Stanley by early next year, he still has a lengthy and difficult agenda to complete: halting a stream of high-level resignations, reversing a new earnings disappointment and silencing the criticism that led to his own departure.

Acknowledging that calls for his ouster and the exodus of employees have hurt the venerable Wall Street investment bank, Purcell said Monday he will retire as soon as a successor can be found, but no later than the company’s annual shareholder meeting next March.

News of Purcell’s planned retirement came three days after nine stock traders quit, the latest in a string of Morgan Stanley executives dissatisfied enough with the chairman’s management style to leave.

The resignations, which began in late March, led a group of dissident shareholders and former executives to publicly call for Purcell’s firing and a reorganization at Morgan Stanley.

That, Purcell said, created a “sideshow” that distracted the company from its business goals.

“This morning’s announcement was very, very simple but hard,” Purcell, 61, told analysts in a conference call. “There’s been way too much attention being paid to acrimony and criticism, most of it directed at me. It’s not good for Morgan Stanley, and the best thing for me to do is, in fact, to retire.”

Investors who had sold Morgan Stanley shares as the turmoil increased were clearly relieved Monday and bid the stock higher. Morgan Stanley rose $1 to $50.88 on the New York Stock Exchange.

Two sources close to the company, speaking on condition of anonymity, said Purcell’s departure was a joint decision by the CEO and Morgan Stanley’s board of directors. They said Friday’s resignations — from a division Purcell had highlighted as important to the firm’s future — were the deciding factor in his leaving.

The sources also told The Associated Press that Morgan Stanley board member Charles Knight, who will head the search for Purcell’s successor, told an employee meeting early Monday that popular former Morgan Stanley executive John Mack would not be considered for the job.

In addition, Knight told employees that none of the dissidents would be candidates, the sources said.

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