Annual Meeting: March 29, 2023

The total compensation in 2022 for Jefferies Financial CEO Richard Handler was $56,897,424, one of the highest pay packages I’ve seen this proxy season. The pay package included two major stock awards – a fiscal 2021 equity award of $20.4 million and a five-hear “Leadership Continuity Grant” of $25 million dollars.

According to the proxy statement, “The Board then determined that a one-time award would help to ensure that our executives would be with us for at least another five years.”

Handler has been employed by Jefferies for 21 years. If he hasn’t left the company already, I don’t think he’s going to leave to work for a competitor. That is particularly true given the fact that according to the ownership of common stock table, Handler owns 7.5% of the company’s outstanding shares, a total holding of 17,802,850 shares. A footnote to that table notes that, “Assuming Mr. Handler’s continued employment with us through the expiration of all applicable vesting and deferral periods and that goals required for earning performance-based awards are achieved at target levels, he would beneficially own 20,466,109 shares (8.5% of the outstanding class).”

Of course, he may retire. But again, it seems little more than a polite fiction to suggest that he will stay on a few years more because he wants to get that last award. He is already financially able to retire. In addition to the items mentioned above, he had a balance of $363,190,142 in his non-qualified deferred compensation. (He withdrew an additional $88 million from his deferred compensation plan in 2022.) He’s also the last named executive officer at Jefferies eligible for a pension. In other words, this award – excessive as it may be – is a relatively minor portion of his total compensation.

For the past several years, the company’s proposals on pay have gotten low support. The response strikes me as weak. “Our fellow shareholders’ concerns” as listed by the company are mostly along the lines of “you asked us to elaborate” on this or that topic in compensation. Perhaps some shareholders did ask for additional disclosure, but I expect more objected to the size of the pay package. Likewise, “You were dissatisfied with equal pay packages for our CEO and President” was probably not so much saying they should be paid different amounts, but that it was problematic to have two executives paid at such a high level. This year the president’s compensation was $56,856,336

I expect shareholders will object to this compensation package.