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Jefferies' big MD hiring suggests another strained bonus round

Jefferies has been hiring, and it's been hiring managing directors, in bulk. Following CEO Richard Handler's avowal last year that Jefferies would "remain on high alert for great talent," the bank declared yesterday that it expects to accumulate an extra 61 managing directors this year, an increase of 20% on last year, and that it couldn't be happier with its "future potential."   

This is all good, but for the fact that new managing directors often come on guaranteed bonuses and take a while to get up to speed. And while this is happening, Jefferies' 2023 bonus pool already looks squeezed. 

Despite adding all those new MDs, Jefferies spent slightly less on compensation in the first nine months of 2023 than the first nine months of 2022. Pay per head is currently running at an average of $349k for the first three quarters, versus $361k last year. And it's worth remembering that last year, too, there were complaints from existing MDs that too much of the bonus pool had gone to new recruits. 

Jefferies insiders are predicting a further round of cuts, particularly in equity research and particularly in Asia, where they claim things seem particularly tight. Jefferies isn't commenting, but it already cut some popular senior equity researchers earlier this year in the form of  Sean Darby (an ex-managing director and global head of strategy based in Hong Kong)  and Flavio Cereda Parini (a luxury goods analyst in London who left by mutual agreement). Equally, however, it's been hiring some new ones in, in the form of Pierre-Emmanuel Clouard and Stéphanie Dossmann in Paris and others. 

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AUTHORSarah Butcher Global Editor

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