Jefferies Financial Group seeks advisory vote on exec compensation

Maria Nikolova

As it pertains to cash bonus compensation, the Compensation Committee has decided to pay each of Jefferies’ executives $3.25 million for 2019.

Jefferies Financial Group Inc (NYSE:JEF), formerly known as Leucadia National Corporation, is inviting its shareholders to attend an annual meeting which will see, inter alia, the executive pay put to advisory vote.

The 2020 Annual Meeting of Shareholders will take place on Friday, April 17, 2020 at 10:00 a.m. New York City time at the Paley Center for Media, 25 West 52nd Street, New York City. The agenda will include a vote for the election of directors, an advisory vote to approve Jefferies’ 2019 executive compensation and a vote on the selection of its independent auditors.

As reported in last year’s proxy statement, between 2018 and early 2019 the Compensation Committee made a series of changes to Jefferies Financial Group’s executive compensation plan in direct response to feedback from shareholders.

Based on the Compensation Committee’s changes to the plan, there were substantial decreases in stated compensation targets (28% decrease on cash compensation target and 10% reduction in total incentive compensation), and increased performance thresholds and targets resulted in implied decreases in incentive compensation of 17%.

Due to those changes and the long-term performance nature of the plan, Jefferies Financial Group notes that its executives remain at risk of losing their long-term equity grants for compensation year 2019.

As it pertains to cash bonus compensation, the Compensation Committee has decided to pay each of Jefferies Financial Group’s executives $3.25 million for compensation year 2019 based on strong business and strategic results. The executives also earned a performance-based long-term incentive bonus of $4.5 million relating to compensation year 2018 because compounded ROTDE for the two-year period 2018 through 2019 was 12.03%.

The Group explains that its CEO (Rich Handler) and President (Brian Friedman), who together own approximately 8.6% of its outstanding shares, are financially and strategically aligned with the shareholders. The Group wants to be certain that the executives will continue to strike the proper balance between short-term performance and the ultimate objective: long-term value creation.

The goal is also to find the best way to retain and motivate the executives while taking into account the views of fellow shareholders, as well as the responsibilities as stewards of Jefferies.

“Our philosophy was, is and will remain simple: We want to pay our executives fairly relative to our performance as compared with their peers, but only if they generate meaningful long-term growth in our value”, the Group says.

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