John Thornton, president and co-chief operating officer of Goldman Sachs Group Inc, surprised Wall Street by announcing his retirement as president and co-chief operating officer of Goldman Sachs to become a professor at Tsinghua University, one of China's top universities.
Frequently tipped as a successor to Hank Paulson, the investment bank's chairman and chief executive, Mr Thornton's departure in July will leave the way open for rivals such as Lloyd Blankfein, a Goldman vice-chairman, or John Thain, the company's other president and co-chief operating officer.
Mr Thonton's decision sends a signal that Mr Paulson, is likely to remain in control for the forseeable future. At the time of Goldman's public offering in May 1999, some executives inside Goldman expected Mr Paulson might have left by now.
But Mr Paulson's growing determination to stay on at the job put Mr Thornton in a difficult position. Approaching his 50th birthday, he was forced to contemplate spending years waiting for his chance to head the firm and then running it into his 60s.
Mr Thornton is instead opting for an adventurous life, helping to train the new business elite of China. "People will be very, very upset when he leaves," said John L. Weinberg, a former Goldman chairman who remains an adviser. "He's been very good for Goldman Sachs. He's a brilliant guy."
Mr Thornton joined Goldman in 1980 and played a key role in establishing the investment bank as a leading corporate adviser in Europe and Asia. Goldman said he would remain as a senior adviser, focusing on strategy and clients in China.
Mr Thornton's interest in politics is well known, but his decision to concentrate on Chinese affairs suggests that he would be more interested in an appointive office than in standing for election.
His departure also underscores the changing balance of power at investment banks. Three years into a bear market in equities and mergers-and-acquisitions, traders in the fixed-income markets are gaining importance.
Mr Blankfein, who runs Goldman's fixed income,currencies and commodities business, generated a record $1.88bn in revenue last quarter, 54 per cent more than the previous year. The mergers and acquisitions business, where Mr Thornton made his name, has slumped to 1996 levels of activities.
Mr Thornton came into his own as a banker during his 15-year stint in London. He shook up the UK investment banking world as Goldman's young head of European mergers and acquisitions in 1983 when BTR launched a hostile bid for Thomas Tilling. Tilling's traditional British banker waited until three days after the bid to call the group. Mr Thornton had been ensconced at Tilling's corporate headquarters the whole time.
(China Daily news 25-03-2003)
