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Jefferies hasn't cut pay as much as it might have.

Average pay at Jefferies down a mere 25% this year

Jefferies' full year results for 2022 are out and things aren't as bad as they might have been. 

Overall spending on compensation fell by 27% to $2.6bn last year, while headcount went from 5,556 to 5,381. As a result, the bank spent an average of $481k on “compensation and benefits” per employee for 2022, a year on year decline of only 25%. 

The cuts came as Jefferies revenues for the year ending November 2022 declined around a quarter to $5.98bn net and net earnings fell from $1.67bn to $782m. The most dramatic declines were in underwriting - but M&A revenues were roughly consistent across the two years. 

Jefferies' employees were warned that pay would fall. In an investor letter last month, Rich Handler and Brian Friedman, CEO and President of the bank respectively, said that 2022 would be “a more difficult compensation season at Jefferies,” and the implication was that which wasn’t promised, was on the table. "We're still paying guarantees for people we hired in 2021," another banker told us

When bonuses were announced before Christmas, one Jefferies M&A banker complained he was being hard done by. The advisory division had had a good year, he told us. However, he suggested bonuses would be down by virtue of the, "huge number of people who've been hired on big guarantees and who have contributed nothing."

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AUTHORZeno Toulon

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