Sherwood, currently vice-chairman and co-chief executive officer of Goldman Sachs International, has been with the bank for more than 30 years and is one of London’s most high-profile investment bankers.
But his reputation recently took a knock in June this year amid the fallout from the collapse of UK retailer BHS and he was forced to defend the bank in front of a committee of UK parliamentarians.
Sherwood, known as ‘Woody’, will stay at the bank as a senior director, according to an internal memo seen by WSJ City and signed by Lloyd Blankfein, CEO and Gary Cohn, president and COO. Richard Gnodde, currently co-chief of the international business, will take sole charge.
Sherwood joined Goldman in 1986, and became a partner in 1994. He is one of just three City executives to have been named on every one of FN’s annual lists of the 100 most influential people in European finance since 2005.
In a wide-ranging career that has put him at the centre of much of the bank’s work in Europe, Sherwood has held positions including head of the bank’s giant fixed-income trading business in Europe and co-head of its securities division. He became co-chief executive of Goldman Sachs International in 2005 and was appointed a vice-chairman in 2008 – at 51, he remains one of the youngest VCs at the bank.
He is one of the bank’s best-paid executives and in 2015 received a pay package worth $ 21 million, slightly less than Blankfein’s $ 23 million, The Wall Street Journal reported in January.
Sherwood came under scrutiny this year after he was drawn into the fallout of the collapse of BHS. He was questioned alongside other senior colleagues as a parliamentary committee scrutinised the bank’s involvement in the failure. Asked whether he thought Goldman’s reputation has been “enhanced” by its involvement in the BHS deal, Sherwood replied “No,” but added the bank didn’t accept blame for the retailer’s collapse.
Outside of banking and finance, Sherwood is well-known for his philanthropic endeavours. He was named in FN’s inaugural Extra Mile Awards for charitable projects including a children’s table tennis academy in London (his father represented England). He is also a sponsor of The Harefield Academy, a failing school he helped to turn around in London. He has formerly served on the board of directors at the UK Premier League football club Watford FC.
At an event held for summer interns at Goldman Sachs in August of this year, Sherwood advised his younger colleagues against setting themselves “specific timetable” for success. He added: “Be yourself, be authentic, don’t try to conform. Be motivated, have a thirst for information and have an intellectual curiosity.”
Richard Hoar, a finance director at headhunter Goodman Mason, said: “They’ll continue on without him and it’s a chance for some up and coming bright talent to step up.”
In the November 21 memo to staff, Blankfein and Cohn credited Sherwood for influencing a generation of Goldman Sachs bankers. They wrote: “Over the course of his career, Michael has played a vital role in establishing and growing our franchise in Europe and around the world. His expertise and knowledge across a range of markets, as well as his passion and commitment to our culture, have influenced a generation of professionals at Goldman Sachs.
“In helping to lead Goldman Sachs International, Michael worked closely with many of our corporate, asset management and investing clients. His understanding of corporate strategy combined with a deep sense of the longer term structural forces shaping markets and economies were the basis for his innovative thinking across industries and products.”
His move comes as Goldman Sachs deals with the outcome of Brexit, which could result in it having to restructure its operations in the region. Goldman Sachs International now accounts for just over a quarter of Goldman Sachs’s total income.
Octavio Marenzi, the CEO and founder of capital markets’ management consultancy Opimas, said that Sherwood’s move was a “reflection of the fact investment banks are facing a new reality in Europe”.
He said: “The name of the game is not going to be aggressive expansion, where Sherwood excelled, but rather operational efficiency, cost control and regulatory compliance, which is going to be top of the agenda in the coming year and beyond.”
On November 16, Sherwood sold 42,317 Goldman Sachs shares worth $ 8.75 million, according to a filing by the bank on Friday. He continued to own more than 319,000 shares, directly and indirectly, the filing said.
Additional reporting by Max Colchester, Lucy Burton and Fareed Sahloul
• A version of this article appeared on WSJ City, a made-for-mobile app that combines the best of the Wall Street Journal and Financial News, tailored for an audience in the City of London. Download here