This week, we speak with the legendary John Mack, former chief executive officer and chairman of the board at Morgan Stanley. He recently published a memoir of his life and 34-year tenure at Morgan Stanley, “Up Close and All In: Life Lessons from a Wall Street Warrior.”
We discuss how he ended up on Wall Street because he needed a job when an injury ended his college football career and scholarship. From that beginning he went to Smith Barney, then Morgan Stanley, where he moved up the ranks in the fixed-income group, eventually running the entire bond group. He recalled what the Street was like in the 1960s and 70s, when the NYSE was closed on Wednesdays to catch up on paperwork. The culture and overall mood of Wall Street were very different in those days.
He rose to the role of CEO, where he built out an international business. He recognized the firm needed to expand into the retail business, which was less risky and had a more predictable revenue stream. Eventually, this led to the Morgan Stanley merger with Dean Witter, then the 3rd largest brokerage firm in the U.S. The deal went well, but ultimately, Mack was pushed out by Philip J. Purcell, who was running Dean Witter and had become the CEO of the combined entity.
Mack was tapped to turn around the faltering Credit Suisse First Boston, which he successfully managed. His 3-year contract was not renewed by the Swiss parent company. By that time, the once #1, but newly risk-averse Morgan Stanley was falling far behind its competitors. The board of MS ousted Purcell to bring back Mack to run the firm.
He describes navigating through the financial crisis by partnering with Mitsubishi Bank of Japan. While those negotiations were ongoing, Treasury Secretary Hank Paulson, Fed Chair Ben Bernanke, and New York Fed President Timothy Geithner were pushing for Morgan Stanley to merge with another bank. Mack believed the firm was strong enough to stand on its own, especially with a cash infusion from the Japanese. While waiting for that billion-dollar check to arrive, he ended up telling Geithner to “Get f%$ed*.”
You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Jennifer Grancio, CEO of Engine No. 1, where she guides the firm’s strategic vision. Before Engine No. 1, Jennifer served as a founding member of BlackRock’s iShares business, where she led European, US, and global distribution and drove the growth of the global ETF industry and iShares’ leadership role within it.
John Mack Books
Gone with the Wind by Margaret Mitchell