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While Lewis dealt with shareholders reading scripture and poems to protest his tenure, Mack's experience was far less contentious with shareholders asking about his strategies for the future. At the meeting Mack told shareholders that the company is refocusing itself on underwriting, wealth management and corporate advisory services. He added that the bank was growing deposits in its retail banking sector and that the asset management business is still a critical part of the bank's strategy. If Mack's new model sounds familiar, it should because it more or less was the old Merrill Lynch & Co. business plan before it dove into mortgage-backed securities, notes a Dow Jones article. By not placing risky bets in the market, Mack is looking to steady the company's balance sheet. Another part of the bank's strategy will be expanding its alliance with Mitsubishi UFJ Financial Group Inc., Mack said. After the meeting Mack directly addressed rumors that the firm might acquire a regional bank to expand its presence in the U.S. "Our hands are full with Smith Barney," Mack told Reuters. "For us to go out and think about acquiring anything right now just makes no sense." Morgan Stanley recently reported a net loss of $177 million, or 57 cents per share, in the first quarter as the bank struggled to overcome $1 billion in losses on real estate investments coupled with a $1.5 billion decline in revenue from the tightening of credit spreads on some of its long-term debt. Mack said that Smith Barney's integration was going as planned and will be completed by the third quarter. Morgan Stanley recently named Ray Harris interim president and chief operating officer of Morgan' global wealth management group, as well as several other appointments. Integrating the wealth management groups is no small feat. There are several challenges, and retaining employees throughout the integration will most likely be the largest obstacle. Morgan Stanley Smith Barney will have about 20,000 brokers, according to the Dow Jones report. Meanwhile, shareholders, who recently saw a dividend cut, asked about retaining employees. The bank has lost several key people amid TARP executive compensation restrictions, Mack noted. He called it an "exodus" that management was trying to control. He added that most employees were heading to international firms. Some Morgan Stanley employees that have fled the firm recently include:
And there's many more employees that have left. (To see where more of Morgan Stanley's dealmakers have gone, check out Movers & shakers.) Still, CFO Colm Kelleher told CNN Money that the bank is currently hiring and recruiting employees from other companies to make up for the loss of talent. - Maria Woehr Also see:
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