Jefferies’ Board of Directors approves bonus plan for Teresa S. Gendron and Michael J. Sharp

Maria Nikolova

If Jefferies’ 2019 ROTDE equals 12% or more, Ms. Gendron and Mr. Sharp are set to receive a performance-based bonus of $750,000 and $3,000,000, respectively.

Jefferies Financial Group Inc (NYSE:JEF), formerly known as Leucadia National Corporation, has published a SEC filing outlining the details of bonus plans for two of its executives.

The Compensation Committee of the Jefferies Financial Group Inc. Board of Directors has approved an executive compensation incentive bonus plan for fiscal year 2019 for Teresa S. Gendron – Vice President and Chief Financial Officer, and Michael J. Sharp – Executive Vice President and General Counsel.

The plan envisages that each executive’s 2019 bonus will be partly performance-based and partly discretionary.

In order for Ms. Gendron and Mr. Sharp to be eligible to receive targeted performance-based bonus, Jefferies will have to achieve 9% Return on Tangible Deployable Equity (ROTDE) during the year ending November 30, 2019.

  • If Jefferies’ 2019 Return on Tangible Deployable Equity (ROTDE) is less than 6%, Ms. Gendron and Mr. Sharp will not receive any performance-based bonus.
  • If Jefferies’ 2019 ROTDE equals 6%, Ms. Gendron and Mr. Sharp will be eligible to receive a performance-based bonus equal to $250,000 and $1,000,000, respectively.
  • If Jefferies’ 2019 ROTDE equals 9% Ms. Gendron and Mr. Sharp will be eligible to receive a performance-based bonus equal to $500,000 and $2,000,000, respectively.
  • If Jefferies’ 2019 ROTDE equals 12% or more, Ms. Gendron and Mr. Sharp will be eligible to receive a performance-based bonus equal to $750,000 and $3,000,000, respectively.
  • 2019 ROTDE performance results falling between 6-12% will result in each executive being eligible to receive a performance-based bonus based on an interpolated basis.

Ms. Gendron and Mr. Sharp will also be eligible to receive a discretionary bonus based on personal performance, effectiveness of non-revenue-generating activities, implementation of strategic initiatives and overall senior management skill and effectiveness.

Performance and discretionary-based bonuses will be subject to Compensation Committee approval following fiscal year 2019.

Speaking of top management at Jefferies, let’s note that, Jeffrey C. Keil and W. Patrick Campbell retired from the Group’s Board of Directors effective February 1, 2019. This reduced the size of Jefferies’ Board to twelve Directors.

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