Silicon Valley has long been criticized for its problem with gender inequality. Things are about to change as Ruth Porat, Chief Financial Officer of Morgan Stanley (NYSE:MS), will leave to take on the same position at technology giant Google Inc. (NASDAQ: GOOG). Porat has helped Morgan Stanley implement a cost-cutting strategy across many business lines and Google is looking to do the same as they look to invest in new businesses, such as their technology glasses and self-driving cars. Porat’s strategy has helped Morgan Stanley cut its expenses from 34% of its revenue in 2012 to 29%, without cutting compensation.
Google, over the past few years, has taken on many new ambitious projects, which have caused their costs to jump tremendously. Google’s total expenses increased by 23.4% last year, compared with the company’s increased revenue of 19%.
Ms. Porat, age 57, is a California native with a degree from Stanford University. She joined Morgan Stanley in 1987 and served as co-head of investment banking to major tech companies such as Amazon.com Inc. (NASDAQ:AMZN) and Ebay Inc. (NASDAQ:EBAY). She eventually became chief financial officer in January of 2010, making her one of the most powerful women on Wall Street. During her career as CFO, Porat has helped CEO James Gorman get rid of many risky activities as well as grow their wealth- management division that promotes stable profits. Google’s current Chief Financial Officer, Patrick Pichette, announced his retirement two weeks ago on Google Plus, the company’s social network. His announcement added to the many departures of Finance chiefs over the past year, including Amazon, Facebook Inc. (NASDAQ:FB), and Apple Inc. (NASDAQ: AAPL).
Pichette’s total compensation as CFO was twice as much as Porat’s from 2010 to 2013. He earned $62.2 million compared to Porat’s $29.6 million. Porat, in a statement said that she is excited to get started as she goes back to her roots in the city she grew up in. She believes that her experience in technology over her career will help her improve Google to the best of her ability. After the announcement on Tuesday, shares of Morgan Stanley fell 0.5%, while shares of Google increased as much as 2%. 46-year-old investment banker, Jonathan Pruzan, will succeed Porat. Porat is set to take on her new role on May 26th of this year.