S. Parker Gilbert, who led Morgan Stanley when it went public in 1986 and, in retirement, steered the 2005 uprising that pressured CEO Philip Purcell to step down, has died. He was 81.
He died May 27 at New York Presbyterian/Weill Cornell Medical Center in Manhattan following a long illness, his son, David Gilbert, said in a telephone interview.
During Gilbert’s tenure as chairman, from 1984 to 1990, Morgan Stanley’s equity rose nearly tenfold, to $2 billion, and its workforce increased to 6,800 employees from 2,600, according to the firm. Its parent, Morgan Stanley Group, issued shares in an initial public offering in March 1986, and the stock price soared 26 percent on its first trading day.
With family ties to both founders of New York-based Morgan Stanley — Henry Morgan was his godfather, Harold Stanley his stepfather — Gilbert kept the firm “grounded in tradition at a time of great change,” the firm says in its online history.
In 2005, as an advisory director, Gilbert joined seven other former Morgan Stanley executives, including former firm President Robert G. Scott, in starting a coup that deposed Purcell as chairman and CEO. Purcell had become head of Morgan Stanley by arranging its 1997 merger with his Dean Witter Discover Inc. Under his watch, nearly two dozen senior bankers bolted from the firm, profit slumped and it lagged competitors.
The “Group of Eight,” as the critics became known, said in an open letter to the Morgan Stanley board that “the value of the Morgan Stanley franchise is deteriorating” because of a “crisis of confidence” in Purcell.
“Getting rid of Phil Purcell was a 10, and getting the board reconstituted was a 9 on a sale of 10, because most of them were in his pocket,” Gilbert told Patricia Beard for her 2007 book, “Blue Blood & Mutiny: The Fight for the Soul of Morgan Stanley.”
Gilbert’s “reputation for absolute probity gave the fight gravitas and credibility,” Beard wrote.
After Purcell stepped down in June 2005, he was replaced by John Mack, who years earlier had risen to co-head of fixed income sales and trading when Gilbert was chairman.
Seymour Parker Gilbert III was born Nov. 15, 1933, one of three children. His father, S. Parker Gilbert Jr., was a U.S. Treasury Department official under presidents Woodrow Wilson, Warren Harding and Calvin Coolidge and when still in his 20s was considered “the most extraordinary man of his years in the field of public finance since Alexander Hamilton,” the New York Times wrote.
Following a posting in Europe as U.S. agent general overseeing Germany’s post-World War I reparations payments, he became a partner in J.P. Morgan & Co. — today’s JPMorgan Chase & Co. — and was present at the 1935 meeting that created Morgan Stanley as the firm’s investment-banking spinoff. He died in 1938, at 45.
Gilbert’s mother was the former Louise Todd. After being widowed, she married Stanley, the first president of Morgan Stanley.
A graduate of the Hotchkiss School, in Lakeville, Connecticut, in 1952 and Yale University, in New Haven, Connecticut, in 1956, Gilbert served for three years in U.S. Army counterintelligence.
In 1959, he married the former Gail Auchincloss, granddaughter of a New Jersey congressman.
Gilbert joined Morgan Stanley the following year, was elected a partner in 1969 and for a time ran the firm’s Paris office.
He was part of the firm’s governing management committee when, at the start of 1983, he was named president, succeeding Robert H.B. Baldwin, who became chairman. He succeeded Baldwin as chairman on Jan. 1, 1984.
Publicly, Morgan Stanley had committed to remaining a partnership. Inside the management committee, there was talk of following Donaldson Lufkin & Jenrette, Merrill Lynch & Co. and Bear Stearns Cos. in selling shares to the public.
Morgan Stanley “needed more than its current $300 million in capital” to continue as a market leader, “particularly in fixed income, securities, proprietary trading and merchant banking,” Beard wrote.
On March 21, 1986, its first day of trading, Morgan Stanley sold 5.2 million shares, and raised $292.4 million.
By 1989, Gilbert’s annual salary was $4.5 million and his 1.14 million Morgan Stanley shares were worth $66.1 million, according to Forbes magazine.
After stepping down in 1990, Gilbert remained a Morgan Stanley director until 1997, when he wasn’t named to the board of the merged Morgan Stanley Dean Witter.
He lived on Fifth Avenue in Manhattan, “shot birds on his plantation in South Carolina in the winter” and “spent his summers in Southampton, as he had all his life, and where he was president of the National Links Club,” Beard wrote.
He was president of the Morgan Library & Museum in Manhattan from 1988 to 2011 and was a trustee emeritus of the Metropolitan Museum of Art.
In addition to his son, David, a novelist whose books include “& Sons” (2013), Gilbert’s survivors include his wife and their daughter, Lynn Tudor, and eldest son, S. Parker Gilbert Jr.