RJ and Makay

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Morgan Stanley announced yesterday that John Mack will step down as chairman and leave the board at the end of the year, at which time he will become an advisor to the firm.  CEO James P. Gorman will become chairman on January 1, 2012.  Gorman has been with the firm since 2006, when he came on board as president and chief operating officer of the wealth management group.

Morgan Stanley CEO James Gorman has been taking the firm in a new direction. Since officially taking over for John Mack in January 2010, he’s been working on reshaping the firm “so that it can prosper in a post-world crisis,” according to The Economist in its story about Morgan Stanley.

While still in the midst of making over the firm, it looks like Gorman has made some progress already. The most significant contribution he’s instrumented so far has been the joint venture with Smith Barney, which is helping the firm significantly compensate for some of its earlier losses. Smith Barney’s 18,000-member brokerage unit was its most profitable division in the third quarter, boasting earnings of $281 million. In the asset management division, earnings came in at $279 million, and in the institutional securities division they were at $240 million.