Morgan Stanley Mack worked at several firms around Wall Street before starting his career at Morgan Stanley in 1972 as a bond salesman, where he worked for nearly thirty years. While trading bonds, Mack has said he learned a lot about risk management, telling the truth and focusing on clients' needs. Rising steadily to positions of increasing responsibility, Mack eventually headed the firm's Worldwide Taxable Fixed Income Division from 1985 to 1992. In 1987, he became a member of the board of directors. In March 1992, he assumed responsibility for Morgan Stanley's day-to-day operations as chairman of the operating committee. He was named president of Morgan Stanley in June 1993 Mack served as president, chief operating officer and a director of Morgan Stanley Dean Witter & Co. from May 1997 when the firm was created by the merger of Morgan Stanley and Dean Witter, two of the world's leading financial services companies. In 2001, Mack left Morgan Stanley after a power struggle with
Phil Purcell; Purcell became CEO of Morgan Stanley after the 1997 merger of Morgan Stanley and
Dean Witter, of which Purcell was already CEO. However, over the next few years, Morgan Stanley's performance lagged in terms of its stock price and industry competitiveness that former and current employees criticized Purcell's strategy and management style. A series of high profile executives left to work for competitive firms, including former Citigroup's CEO Vikram Pandit and Citi President John Havens while others like M&A banker Joseph Perella, launched his own advisory firm, Perella Weinberg Partners.
Credit Suisse Six months later, in June 2001, Mack was hired as CEO of
Credit Suisse, then known as
Credit Suisse First Boston (CSFB) after then CEO Allen Wheat was ousted after a series of probes regarding IPO allocations. At the time Mack took over as CEO, CSFB was a leading underwriter for IPOs, mainly in the Technology sector but was bloated with high expenses, especially after purchasing the investment bank Donaldson, Lufkin & Jenrette for $11.5 billion in cash and stock in August of 2000. Mack's time at Credit Suisse was marked by much restructuring and by compliances issues created by
Frank Quattrone's Technology Group.However, in July 2004, Mack, who was by then Credit Suisse Group Co-CEO since January 2003, left the firm as the Board did not renew his contract due to differences in strategy and direction of the firm. despite an economic downturn. After successfully navigating the firm through tumultuous waters during the 2008 financial crisis, Morgan Stanley stood on a solid ground to rebuild a better positioned retail brokerage business that could provide a steady stream of income during economic downturns that primarily affects trading and M&A business activities. So it decided to purchase Salomon Smith Barney as an initial investment in 2009 for $2.7 billion and fully taking control in 2012 and the online discount brokerage E-Trade in 2020 for $13 billion. Mack announced his retirement as
chief executive officer on September 10, 2009, which was effective January 1, 2010. At the end of 2011, Mack relinquished his role as Chairman and officially retired from Morgan Stanley after more than 30 years as an investment banker. Former co-president
James P. Gorman succeeded him as CEO in 2010 and Chairman of the Board on January 1, 2012 and who has said of Mack's legacy that he saved Morgan Stanley and for standing up to government pressure to sell the company for pennies during the financial crisis.
Kohlberg Kravis Roberts In 2012, Mack joined
Kohlberg Kravis Roberts as a senior advisor. Morgan Stanley has a history as an advisor on KKR deals that can be traced back to the $4.5 buyout for Safeway in 1986. Since then, the blue chip investment bank has long since advise KKR on numerous deal ever since.
Rosneft In 2013 Mack joined
Rosneft, the Russian, state-owned, oil company that has BP as an investor of approximately 20%. In 2014 he announced his departure, shortly after the CEO
Igor Sechin had sanctions imposed upon him by the US. Different reasons were given for his departure; Mack said his contract had only been for a year, while Rosneft spokespeople said he had decided to leave for personal reasons.
Insider Trading Accusations In 2006, Mack was accused by former
SEC investigator
Gary J. Aguirre of
insider trading. On October 5, 2006, the SEC recommended no action be taken against Mack. In late November 2006, Mack and Pequot were notified that the investigation had been closed and no action would be taken against them.
Compensation While CEO of Morgan Stanley in 2006, Mack earned a total compensation of $41,399,010, which included a base salary of $800,000, stocks granted of $36,179,923, and options granted of $4,019,934. In 2008, he earned a total compensation of $1,235,097, which included a base salary of $800,000 and other compensation of $435,097. He did not receive any cash, stock, or options. In 2014, Mack defended the high fees paid to CEOs, saying on
Bloomberg Television that the discussion of compensation was healthy, but that CEOs earn the rates.
2008 Financial Crisis Mack made riskier bets to get the bank some if its former swagger but was unable to pull back in time in 2007 and 2008 when Morgan Stanley suffered significant losses that was almost forced to sell itself to a competitor or face bankruptcy. During the height of the financial crisis, the Fed provided emergency needed funding, known as Troubled Asset Relief Program (
TARP) for the amount of $10 billion that maintain the company afloat temporarily. This funding was made possible when Morgan Stanley, along with the remaining investment bank
Goldman Sachs, turned themselves into traditional bank holding companies to take advantage of financial resources available and ensure business continuity. But Mack negotiated a last minute $9 billion investment deal from the Japanese banking institution, Mitsubishi UFJ Financial Group, providing life support that preserved Morgan Stanley from going under and ultimately survived. Morgan Stanley repaid the federal government bailout money in 2009. building its capital position and overseeing the firm's conversion to a bank holding company. To stabilize the firm, he forged strategic alliances with China Investment Corporation and Mitsubishi UFJ Group and entered into a joint venture with Smith Barney, forming at the time the world's largest wealth management firm. During the crisis, Mack was advised by U.S. Treasury Secretary
Hank Paulson and the head of the Federal Reserve Bank
Ben Bernanke to sell Morgan Stanley. He has stated that during negotiations he was under considerable pressure from the president of the New York Federal Reserve,
Tim Geithner, to sell or merge Morgan Stanley to one of his competitors such as
JP Morgan. Mack saw this as being contrary to the interests of Morgan Stanley shareholders and employees, similar to the demise of
Bear Stearns in a forced sale to JP Morgan for $2 per share, (the deal was later revised to $10 a share), and insisted on finding other sources of financing instead. == Board Memberships ==