Morgan Stanley's (MDW) former chairman and former president are calling for the ouster of current CEO Philip Purcell (search), saying a recent management shakeup he engineered was not in the best interests of the company. Two more top executives have left the investment firm in the wake of the management changes.

Purcell said Tuesday he was replacing President Stephan Newhouse with two co-presidents, Morgan Stanley veterans Stephen Crawford and Zoe Cruz. Morgan Stanley said in a statement the moves would provide new oversight of the company's institutional securities and investment management operations.

However, a group of former executives and major shareholders, led by former Chairman Parker Gilbert and former President Robert Scott, said the restructuring could result in the loss of other executives.

The group also released a letter, dated March 3, sent to the current Morgan Stanley board calling for Purcell's departure. The group blamed Purcell for the company's lagging stock price and financial performance.

"We believe that the overriding cause of the firm's poor performance is a failure of leadership by Philip Purcell as the firm's CEO," the March 3 letter said.

Late Tuesday, Morgan Stanley said in a statement that two other top executives, Vikram S. Pandit, president and chief operating officer of its Institutional Securities Group, and John P. Havens, head of the Institutional Equity Division, are leaving the company immediately.

The firm said they were leaving "to pursue other endeavors." It did not give further details.

Purcell came to Morgan Stanley, a firm that catered to elite clients, when it merged in 1997 with the more down-market Dean Witter Discover & Co. (search). Purcell won the CEO's job after the merger.

The Wall Street Journal said Wednesday that Purcell was disappointed by the letter from the former Morgan Stanley executives.

"It is horrible governance for guys gone 10 years to do this and set themselves up as a new board of directors," he told the newspaper in an interview on Tuesday.

He told the Journal he has the full support of the Morgan Stanley board and said, "We are pursuing the right strategy."

The firm's shares rose $1.14, or 2.1 percent, to $54.75 on the New York Stock Exchange (search). Its shares have traded in a range of $46.54 and $60.51 over the past 52 weeks.

Morgan Stanley reported strong first-quarter growth, with profits up 20 percent. 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 changes in the president's office, Purcell said 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."