Jefferies Financial Group reveals amendments to incentive compensation plan

Maria Nikolova

Jefferies has raised its Return on Tangible Deployable Equity (ROTDE) performance ranges from a 5% threshold and 8% target to a 6% threshold and 9% target.

Jefferies Financial Group Inc (NYSE:JEF), formerly known as Leucadia National Corporation, has earlier today posted a SEC filing revealing details about amendments to its incentive compensation plan.

Following Jefferies’ 2018 annual meeting, the Compensation Committee engaged with fellow shareholders to solicit feedback on its executive compensation program. Based on the feedback, the Compensation Committee amended the program to address each of the issues raised by the shareholders.

With regards to the short-term incentive plan, the company explains that it raised its Return on Tangible Deployable Equity (ROTDE) performance ranges from a 5% threshold and 8% target to a 6% threshold and 9% target. This results in a nearly 17% decrease in performance-based awards for 2018, 2019 and 2020.

Further, Jefferies replaced the three-year cash award with a single-year award based on ROTDE performance for 2019 and 2020 and reduced targeted cash by $2.5 million to $6.5 million (this means a reduction of 28%).

Also, if Jefferies’ executives generate ROTDE of at least 12%, that is, if they grow tangible deployable equity by about $1 billion, they can earn up to 1.75x of targeted cash compensation.

Regarding its long-term incentive plan, Jefferies explains that it raised its Total Shareholder Return (TSR) performance ranges from a 5% threshold and 8% target to a 6% threshold and 9% target, which results in a nearly 17% drop in performance-based awards for 2018, 2019 and 2020.

Jefferies has eliminated banking, so no equity awards can be earned unless compound annual TSR performance over a three-year measurement period is greater than 6%.

The Group has implemented a relative TSR performance threshold starting in the current year:

  • If three-year compounded TSR is <50th percentile of Jefferies Financial Group’s peers, its executives will receive no additional equity compensation above target no matter how high Jefferies Financial Group’s three-year compounded TSR might be.

  • If three-year compounded TSR is equal or bigger than 50th percentile of Jefferies Financial Group’s peers, the Group’s executives will be eligible to receive an additional 1.5% of target compensation for each 1 point increase in the Group’s relative TSR ranking.

Finally, the Group says it reduced the overall targeted compensation this year and next year by 10%.

As a result of the 2018 Plan amendments and the TSR, the current estimated value of the 2018 Plan is $14 million, markedly lower than the $26 million initially targeted.

Read this next

Retail FX

Scope Markets doubles down on Middle East: AED accounts ahead of GCC Equity CFDs

“To bolster our footprint in this thriving ecosystem, it was a strategic imperative to integrate AED accounts and introduce a slew of CFD equities reflecting the GCC landscape. This not only appeases the domestic audience but also beckons international investors aspiring to delve into these dynamic markets.”

Market News

Navigating the Complex World of Central Banks: Inflation, Rates, and Economic Growth

Inflation continues to loom large over both European households and businesses, leaving central banks in the region grappling with a prolonged battle to reach their target levels.

Institutional FX

QUODD partners with Blue Ocean for real-time after-hours market data

“Investors are increasingly global, and market data providers like QUODD are facilitating access to data that enables global traders to invest in US markets. Partnering with top-tier fintech providers like QUODD allows Blue Ocean to extend its reach to a new demographic of investors.”

Retail FX

Moomoo Canada launches pro-level tools, free Level 2 data, and affordable US stock trading

“Being a real social trading platform in Canada, we cultivate a unique ecosystem helping our users grow… The world is eager to hear the voice of Canadian individual investors, and we look forward to more contributions from Canadian investors in our moo community.”

Industry News

CFTC sues Patrick Wonsey for $3.4 million FX and binary options scam

Wonsey allegedly diverted these monies for personal use and orchestrated payouts to other pool participants, mirroring a classic Ponzi scheme.

Digital Assets

MoneyGram to launch non-custodial digital wallet

“In collaboration with SDF, MoneyGram has been working towards creating equitable access to the global financial system. With the introduction of this non-custodial digital wallet, we are further emphasizing our commitment to providing consumers with a bridge to the digital economy while upholding our brand’s integrity for speed, efficiency, and trust.”

Digital Assets

Binance exits Russia as part of crypto exchange’s compliance strategy

“As we look toward the future, we recognize that operating in Russia is not compatible with Binance’s compliance strategy. We remain confident in the long-term growth of the web3 industry around the world and will focus our energy on the 100+ other countries in which we operate.”


ECNG Digital taps iDenfy for AI-driven ID verification for user onboarding

“In the realm of virtual currency exchange and payment services, the real challenge lies in balancing fraud prevention with swift identity verification. Our mission is to guide ECNG Digital on this path, ensuring precision while accelerating understanding.”

Retail FX

Verification On eToro Explained: Step By Step Guide

Traders Union emphasizes the importance of eToro’s verification process as a pivotal step in ensuring a safe and compliant online trading experience.