When she became Morgan Stanley's chief financial officer in mid-2021, Sharon Yeshaya knew that her mandate was prudence in times of uncertainty. She counts herself lucky that the first 9 months of moderate uncertainty — and record profits for the bank — bought her enough time to learn the ropes before Russia invaded Ukraine, the Fed began a course of interest rate hikes and "true uncertainty" set in.
The preparation helped Yeshaya and her 3,600-strong finance team return a scheduled $10 billion to investors in share buybacks in 2022 and increase the dividend by 11% while posting the highest risk-based capital buffer of the big Wall Street banks: 15.3% of risk-weighted assets, compared with the 13.3% required by regulators.
This year has seen net income fall, but not as steeply as at rivals.
One mechanism for these feats has been Yeshaya's careful, sometimes painful evaluation of Morgan Stanley's expenses. In May, the bank announced it would lay off 3,000 employees in the second quarter, in addition to the 1,800 the bank laid off in late 2022, bringing the total job cuts to almost 6% of the group's global workforce.
Decisions like these inevitably exercise what Yeshaya identified as one of her biggest challenges as CFO: learning to "toggle" between audiences — from staff to shareholders to members of the Federal Reserve board. Her previous position as head of investor relations from 2016 to 2021 did not produce the same levels of whiplash. "The intellectual content of the CFO job is invigorating, but it's the agility required — and the stakes are very high," said Yeshaya. "With everything you do, the stakes are high. You feel a responsibility to so many different stakeholders on a daily basis."
Yeshaya joined Morgan Stanley as a college intern and returned after graduation as an investment banking analyst. She rose up in the fixed income division — aside from three years in research that coincided with the financial crisis — before being chosen by CEO James Gorman to be his chief of staff in 2015. She is not considered a contender for Gorman's job when he steps down within the year, however. Gorman has indicated it will likely go to one of three white men in the firm.
Regarding the lack of diversity among Gorman's possible replacement, Yeshaya is circumspect in her response. "I'm not really one to say, 'Oh my God, I can't believe we're not there,'" she said. "We're getting there. We're a lot better than we were before." Ensuring that progress continues, she argued, means following Gorman's belief that it's important to create an atmosphere where curiosity is rewarded more than hubris.
"He's created a space where one can ask questions and say, 'I don't know, I don't understand. Can you explain that to me?'" she said. "That's a way to create a richer dialogue. If we let people have a place of communication and asking questions and being curious, we'll get more out of all of our employees."
She believes Morgan Stanley will be able to leverage its team members' curiosity in new ways as volatility ebbs. "The more space and time we have from [2022's] events and today, the more confidence we see from CEOs and from other types of investors," Yeshaya said."It should be a very different year ahead."
