John Mack testifying on Capitol Hill in 2009. (Photo: AP)

Morgan Stanley (MS) said Thursday that John J. Mack will step down as chairman and leave the board at year-end, when he will become a senior advisor to the firm. CEO James P. Gorman was previously elected by the board to fill the post of chairman and will do so starting Jan. 1.

“Working with the remarkable people of Morgan Stanley has enriched my life for more than three decades, and helping to lead this great firm, most recently as chairman, was the greatest honor of my career. However, I made clear back in 2009 that I would serve in the chairman role for two years and then move on,” Mack said in a press release. “Now that time has come.”

Mack joined Morgan Stanley in 1972, rising through the ranks to become president of Morgan Stanley Dean Witter in 2001. He left the firm when Phil Purcell became CEO of MSDW that year and then joined Credit Suisse First Boston. At CSFB, he led efforts to cut costs and trim some 10,000 jobs, which earned him the nickname Mack the Knife. He rejoined Morgan Stanley in June 2005 and replaced Purcell as CEO and chairman.

“Morgan Stanley would not be the world-class franchise it is today if not for John Mack’s leadership,” said Gorman in a statement. “For more than 30 years, he has helped to define the firm’s distinctive culture and build our franchise across the globe. His contributions to the firm are innumerable, but none was more critical than the leadership he provided in guiding Morgan Stanley through a financial crisis that claimed many of our peers.”

Gorman joined Morgan Stanley as head of its wealth-management unit in 2006 after working as the leader of wealth-management rival Merrill Lynch. He also serves as chairman of the joint venture Morgan Stanley Smith Barney, which includes some 17,600 financial advisors.  

“We are grateful for everything that John has done for Morgan Stanley during his long and successful career on Wall Street,” said C. Robert Kidder, the firm’s lead independent director, in a statement. “Most profoundly, his foresight in strengthening our balance sheet and his iron-willed leadership in the face of unprecedented challenges helped Morgan Stanley continue serving our clients even during the darkest days of the financial crisis. 

“James has built on that leadership position–continuing to strengthen our global platform, attract top talent and focus on strategic execution across our businesses,” added Kidder. “So, we are very pleased to name James as the firm’s new chairman and complete the seamless leadership transition we began two years ago.”