Morgan Stanley Chief Told Managers Not to Exploit Goldman’s Woes

Greg Smith can probably scratch Morgan Stanley off his list of future employers.

The resignation by Mr. Smith, the former Goldman Sachs employee who had Wall Street buzzing this week when he left the firm and wrote a stinging opinion article in The New York Times about Goldman’s corporate culture, drew pointed comments on Friday from Morgan Stanley’s chief executive, James P. Gorman.

“But for the grace of God go us,” said Mr. Gorman at a breakfast Friday morning sponsored by Fortune magazine. Mr. Gorman criticized The New York Times for running the piece. “I was surprised anyone would run an op-ed piece based on one employee,” he said. “At any point, someone is unhappy. To pick a random employee, I don’t think it’s fair.”

Mr. Gorman read the piece early Wednesday morning and as the day progressed people sent it to him. He responded, he said, by advising staffers not to circulate it. He said he also sent a note to his top managers, telling them not to take advantage of Goldman’s misfortune this week. “You have to take the high road on this stuff.”

Mr. Gorman spoke for roughly 30 minutes, fielding questions from Fortune’s managing editor, Andy Serwer. Mr. Gorman has been running Morgan Stanley for more than two years. He said his firm “is in much better shape” than its stock price would reflect. Morgan Stanley is trading at roughly $19.50 a share and has struggled over the last year or so despite Mr. Gorman’s attempts to rebuild the firm since the financial crisis.

The executive is hopeful the stock’s fortunes will improve, but said he isn’t surprised for the lag. Investors, he said, still remember the financial crisis and are also worried about the various regulatory changes that have forced Wall Street firms out of certain business and require them to hold more capital, reducing profitability.

“I feel we at Morgan Stanley have had four years of walking through fire,” he said.

Mr. Gorman also threw cold water on the suggestion that Wall Street firms are having trouble recruiting talent on university campuses. “It is ridiculous,” he said, saying “thousands” of students apply each for year a job and those who don’t succeed end up not in other professions but at his competitors.