Under pressure from investors to revive its flagging stock price, Morgan Stanley has announced it is shaking up its top management.

Chief Executive Officer Philip Purcell said in a statement today that he is appointing Stephen Crawford and Zoe Cruz, both veterans at the New York-based company, as co-presidents, replacing Stephan Newhouse.

Earlier today, a group of dissident shareholders and former executives of Morgan Stanley released a copy of a March 3 letter to the company’s board of directors criticizing “the firm’s poor performance” and Purcell’s leadership failure.

Morgan Stanley shares rose 19 cents to US$55.67 in morning trading today on the New York Stock Exchange. They have been trading in a range of $46.54 to $60.51 over the past 12 months.

The firm reported strong first-quarter growth, with profits up 20%. Investors, however, failed to push the shares higher amid concerns that the company was too focused on fixed-income earnings and commodities.

In the statement announcing the management changes, Purcell said that Crawford and Cruz would have responsibility for institutional securities as well as individual investor and investment management groups.

He emphasized that the goal was improving performance.
“By combining our institutional, individual and investment management businesses under Steve and Zoe’s leadership, we are continuing the great investment banking traditions of Morgan Stanley and creating a securities firm without peer,” Purcell said in a statement. “The appointment of a new generation of leaders for our integrated securities businesses reaffirms our commitment to building long-lasting shareholder value.”