Jefferies spent the majority of the last five months giving bankers reason to go work someplace else. It lost $93 million during its fourth fiscal quarter and saw its name run through the mud after the head of its dominant healthcare M&A team was forced to resign. Sage Kelly walked away in October after his estranged wife accused him and his colleagues of being drug addicts and philanderers, among other things, leading to a loss of clients.
Needless to say, the investment bank could use a sunny headline. Finally, it has one. Financial News has a new report on compensation data that makes Jefferies look like a wonderful place to work, at least when it comes to pay. With most every competitor cutting compensation since the crisis, Jefferies has actually done the opposite, setting aside a bigger piece for banker pay while increasing – to 100% – the cash portion of employee bonuses.
Since 2007, Jefferies has increased compensation per head by 13%, according to the report. As a point of reference, Goldman Sachs has seen that figure drop by 40% over the last seven years. J.P. Morgan has kept pay roughly flat over that period. (In fairness, Goldman bankers saw absurd levels of compensation in 2007 and still get paid an industry-leading wage).
Interestingly, Jefferies hasn’t actually increased pay as a percentage of revenue. That has remained static at roughly 57% throughout the last decade. The investment bank is simply generating more revenue with a somewhat modest staff. It’s increased headcount by around 50% since 2007 while roughly doubling its annual revenue.
Meanwhile, even as bulge bracket banks have seen revenues rebound to near pre-recession levels, they have continued to lower their compensation ratios. The average across the industry last year was roughly 40%, compared to 57% at Jefferies. Being more nimble and not having to pay off billion dollar settlements has helped.
Hiring Roundup (eFinancialCareers)
In the latest hiring roundup, private equity firms and corporations are poaching investment bankers, Pimco has seats to fill and BNP is launching a new equities group.
The ‘Boring’ Sector That’s Hiring (eFinancialCareers)
Large international pension funds are trying to poach young talent from investment banks and private equity firms. Large pension funds are growing, they’re a stable employer, and pay is on the up.
Goldman Alums Making Headlines (Bloomberg)
Three former Goldman Sachs employees made news this week. Former oil trader turned journalist Nigel Jaquiss took down Oregon Governor John Kitzhaber, who was forced to resign after Jaquiss uncovered several improprieties. Astonishingly, he’s won the Pulitzer Prize while working at a free alternative weekly in Portland following 11 years of derivatives trading. Elsewhere, Alexis Sanchez, a former Goldman Sachs technician, was convicted of murdering his drug dealer. And ex-programmer Sergey Aleynikov is suing the FBI for malicious prosecution.
JPM’s Compliance Department Not Jiving (Reuters)
“Friction” within J.P. Morgan’s compliance operations has led to the exodus of several managers within the group. The bank’s new automated systems have also made some others redundant.
Fighting for Jeter (Fox Business)
Morgan Stanley and Goldman Sachs are fighting over a new target: former Yankees shortstop Derek Jeter. The two firms are wooing Jeter in hopes of gaining his business as both a private banking client and investment banking target. Jeter hopes to own his own Major League Baseball team one day.
The Haves and the Have-Nots (Bloomberg)
Networking is a big part of business school, and it’s getting more expensive. At some schools, discretionary spending on networking averages roughly $18,000 a year. Those who can’t afford it are at a significant disadvantage.
Cuts at Credit Suisse (Dealbreaker)
Uncapping the Swiss franc really did some damage. Now Credit Suisse needs to cut bonuses and jobs.
Buzz Around the Office
Justice Isn’t Blind (Gawker)
A New Jersey man looking to avoid paying parking tickets pretended in court to be his made-up blind twin brother “Tony.” It didn’t come close to working.
Quote of the Day: “Boyd Thomas’s letter Saturday contained an error in the headline. He does not believe President Obama is the Antichrist, who will come after seven kings, according to Revelation. He thinks Obama could be the seventh king.” – an actual correction to a Lexington Dispatch story