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Michael Sherwood quits as Goldman co-head of Europe

Michael Sherwood, co-chief executive officer of Goldman Sachs Group
Simon Dawson | Bloomberg | Getty Images
Michael Sherwood, co-chief executive officer of Goldman Sachs Group

Michael Sherwood, Goldman Sachs's co-head of Europe, is quitting the investment bank after a three-decade career in which he became one of the industry's highest earners but was embroiled in a recent spat over BHS, the failed UK retailer.

Often listed as one of the potential successors to Lloyd Blankfein for the top job at Goldman, Mr Sherwood joined the bank at the age of 20 and has overseen rapid growth in its European operations since taking joint charge of them 11 years ago.

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Mr Sherwood, widely known as "Woody", will remain at the bank as a senior director during a handover period of about six months. Richard Gnodde, the other co-head of Goldman Sachs International, will take full control of the European operation.

The departure removes one of Goldman's longest-serving European executives at a time when the bank is grappling with the uncertainty arising from the UK's exit from the EU, triggering rumours that it may move activities out of London.

However, Mr Sherwood has faced questions internally from senior executives since being called to appear before a UK parliamentary committee on the bank's role in advising Sir Philip Green over the retail magnate's ill-fated sale of BHS, according to people familiar with the matter.

Mr Sherwood was among several senior executives who helped Sir Philip sell BHS to a consortium led by Dominic Chappell, a former bankrupt, about a year before the 88-year-old department store collapsed in April.

He denied his departure was linked to the BHS controversy. "I've been talking to Lloyd since well before that about what I want to do next," he told the Financial Times. "He has spent most of his time trying to persuade me to stay."

"I didn't want to have anything out there before I left. On Philip Green, I wish we hadn't been involved and I certainly don't think we did much wrong," he said. "It is one blip in a 30-year career and it really played no part in my decision."

A former fixed-income trader, Mr Sherwood has regularly been one of the highest-paid employees at Goldman, earning $21m last year. He said his departure was "entirely amicable", adding: "There are so many great people here and they are already picking over my job".

Last week, Goldman disclosed that Mr Sherwood had sold $184,810 worth of shares in the bank, leaving him with 361,978 shares, worth $76.1m at Friday's closing price.

Mr Sherwood has been paid almost $95m in the past eight years, US regulatory filings show. He had a 0.5 per cent stake in Goldman, worth about £90m, when it floated in 1999. "I stopped working for money a long time ago … when we went public," he said. He would not disclose the financial terms of his departure but said he hoped he would receive a bonus for 2016 as "I worked the full year".

Mr Sherwood listed his proudest achievement as the "Europeanisation of the firm", which he said had shifted from a "tiny" and lossmaking arm of the bank when he joined it to one generating 30 per cent of global revenues and matching its US profit margins.

"As far as Brexit is concerned, I wish that hadn't happened," he said. "As you know, we were very much in the Remain camp … We will readjust, we will have to do what we want. I hope it will be favourable to the UK and we are able to keep a lot of people here."

His time as co-head of Europe has been peppered with controversy, including over Goldman's role in advising the Greek government on swaps that were criticised for masking the size of the country's debts.

The bank was cleared last month in a High Court ruling of allegations that it took advantage of the financial inexperience of Libya's sovereign investment fund to sell it costly and complex financial products.

After leaving Goldman, Mr Sherwood plans to focus on his personal investments and philanthropic activities, particularly Greenhouse Sports, a charity that provides training in various sports to children in poorer parts of London. "I'm absolutely going to take some break before I decide to do anything," he said.

"I've been a Goldman Sachs addict and it's very hard to come off an addiction," Mr Sherwood added. "In those 30-odd years, 25 were pretty good years and five were pretty difficult years," he said, listing the 2008 financial crisis, 2011 European sovereign debt crisis and 1994 Mexican crisis, as among the toughest times he had experienced.

"The only one who is sad that I'm leaving is my daughter, who says I will be so annoying to have around," he said. "You are not going to see me at JPMorgan or Morgan Stanley anytime soon."

Mr Blankfein said: "Michael has played a vital role in establishing and growing our franchise in Europe and around the world." He praised Mr Sherwood's "expertise and knowledge across a range of markets, as well as his passion and commitment to our culture".

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