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Google poaches finance chief from Morgan Stanley Google poaches finance chief from Morgan Stanley
(34 minutes later)
Morgan Stanley chief financial officer (CFO) Ruth Porat is leaving to join Google in the same position. Ruth Porat, the Morgan Stanley chief financial officer often called “the most powerful woman on Wall Street”, is joining Google as its finance chief.
Porat, 57, will replace Patrick Pichette, who said on 10 March that he planned to retire. Porat, 57, who has been at Morgan Stanley since 1987 and advised the US government on its rescue of Fannie Mae and Freddie Mac during the 2008 financial crisis, will join Google on 26 May. She will report directly to Google chief executive and co-founder Larry Page.
Jonathan Pruzan, co-head of Morgan Stanley’s global financial institutions group in investment banking, will become CFO after Porat leaves on 30 April 30. “We’re tremendously fortunate to have found such a creative, experienced and operationally strong executive,” Page said in a Google blog post announcing her appointment on Tuesday.
Google shares rose 1.8% in early trading, while Morgan Stanley shares slipped 0.7%. “I look forward to learning from Ruth as we continue to innovate in our core - from search and ads, to Android, Chrome and YouTube – as well as invest in a thoughtful, disciplined way in our next generation of big bets.”
With Porat’s departure, Greg Fleming, 52, the bank’s head of wealth management, and Colm Kelleher, 57, head of trading, are considered potential successors to chief executive James Gorman. Porat said she “can’t wait wait to roll up my sleeves and get started ... I’m delighted to be returning to my California roots and joining Google. Growing up in Silicon Valley, during my time at Morgan Stanley and as a member of Stanford’s board, I’ve had the opportunity to experience first hand how tech companies can help people in their daily lives.”
Gorman, 56, has been heading the bank for about five years and he is not expected to leave anytime soon. Porat has spent 28 years at Morgan Stanley, during which time she led the bank’s team raising funds for Amazon, eBay and Netscape during the dotcom boom. When the bubble burst she reinvented herself as a financial services banker.
Porat, who joined Morgan Stanley in 1987, is no stranger to the technology industry, having led the bank’s technology franchise during the internet boom. She rose to nationwide prominence advising the US Treasury on the collapse of insurer AIG and the bailout of mortgage providers Fannie Mae and Freddie Mac. She features in the 2011 film Too Big to Fail in which she is played by Jennifer van Dyck.
She has been the lead banker for financing of companies including Amazon.com Inc and eBay Inc. Porat was lined up by President Obama to take on the role of deputy Treasury secretary in 2013. However, the New York Times reported that she asked the White House to withdraw her name from the shortlist due to concerns about how bankers were being treated by politicians.
Porat will join Google on 26 May, the company said. Jack Lew, who would have been her boss had she been confirmed as deputy Treasury secretary, faced tough questions about his Wall Street bonuses during his confirmation hearing.
During the financial crisis, she led the Morgan Stanley teams advising the US Treasury on Fannie Mae and Freddie Mac, and the New York Federal Reserve Bank on insurer AIG. Porat is the mother of three children and has implored other women not to delay their personal life choices for the sake of their careers.
She was widely reported to have been a candidate to be the Treasury deputy secretary, but she said she was not interested. “I find it so tragic when women think they need to put the other part of their life on hold to a later date so they can have accomplished something professionally because I think it could lead to one of two very bad outcomes. One is you never get to that other part of your life, which is really unfortunate and for me would not be fulfilling,” she told Politico.
Pruzan, 46, joined Morgan Stanley in 1994 and has been working with its financial institution clients. “Or you end up in this tension that I talked about previously and therefore you go the other direction and feel the only way to get that other part of your life where you want it is to leave what you are doing professionally.”
“He understands the current regulatory environment, having shepherded clients through the Fed’s stress test,” Gorman said in a memo to staff. Asked if by working hard all her life, she served as a good role model for her children, Porat said: “So I have three boys and I often ask them that question because I’m so often asked the question: ‘How can you be a good mom if you work so hard?’ And so I often ask them and I think they are tired of hearing the question at this point. And we are very close. And we are still close and they are teenagers, so I think that’s a great sign. They are proud.”
Porat has previously advised women to make sure their achievements are noticed, and not just beaver away without recognition. “One of the biggest problems women have is they work really hard and put their heads down and assume hard work gets noticed. And hard work for the wrong boss does not get noticed,” she said. “Hard work for the wrong boss results in one thing – that boss looks terrific and you get stuck.”
Born in Sale, Cheshire in northern England, Porat was raised in Cambridge, Massachusetts and Palo Alto, California. Her father was a research fellow in the physics department at Harvard and then he spent 26 years at the Linear Accelerator Center at Stanford University. Her mother was a psychologist.
Porat replaces Patrick Pichette, who is quitting Google after nearly seven years to go backpacking across Africa and India with his family. In a highly personal blogpost Pichette said he was leaving to “enjoy a perfectly fine midlife crisis full of bliss and beauty”.
“After nearly seven years as CFO, I will be retiring from Google to spend more time with my family,” he said. “Yeah, I know you’ve heard that line before. We give a lot to our jobs. I certainly did.”
Porat, who is married to high profile lawyer Anthony Paduano, supported Hillary Clinton’s attempt to run for President in 2008 and hosted a fundraiser at her apartment in The Dakota building overlooking Central Park on the Upper West Side of Manhattan.
She has previously called on the government to raise taxes on the wealthy. “The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense,” she said in 2011. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate. We cannot cut our way to greatness.”
James Gorman, chief executive of Morgan Stanley, said: “It is with a heavy heart that we see her go … Her tremendous energy, diligence and insight have been an enormous asset to the firm.”
Morgan Stanley will replace Porat with Jonathan Pruzan, 46, its co-head of global financial institutions banking.