Jefferies bonus claw backs and poor culture?
One of the popular finmeme instagram account has been posting some anecdotes from Jefferies employees and it sounds like there is are horrible rules around bonus claw backs. this insta account was posting DM screenshots and there were at least 10 anecdotes of people leaving and getting sued by Jefferies to give back everything from senior level bonuses to signing bonuses at the entry level. He also posted some anecdotes about a generally awful culture around buy side recruiting, making it sound like juniors could get fired if an MD finds out they have signed a buy side offer.
Are these anecdotes true/something to be worried about? Just a few bad tales from a generally good bank? Currently looking at JEF as one of my top choices but this is making me uncomfortable...
yep it’s true. don’t know what else to say really. haven’t worked there myself but know some people.
Jefferies has always been known to have one of the more “sweaty” cultures in the street.
Can’t chime in on the bonus aspect but have heard of pretty stiff clawbacks
To me, there is a big difference between “sweaty” culture and just bad culture. Expecting analysts to work hard is one thing, but if it’s working hard with a team of people I like and being compensated well for my efforts, I don’t mind that. A toxic culture of bonus claw backs and not letting analysts recruit is more than just sweaty.
All the above, and they make it a pain in the ass to get your corrected W2.
As an analyst at JEF who was previously an intern, let me clarify that there is no claw-back on our level (most of this website). I think they start getting implemented for lateral analysts, and ASOs and above.
As for culture, yes most groups at Jefferies are sweaty. That being said, my group and most groups I interact with have a pretty good culture. My group for example, has bad hours (80-100+, even through corona), excellent deal flow, great senior team (went to bat for me during PE recruiting), and good team dynamics (everyone knows each other well from MDs to analysts). I've heard other groups can be more cutthroat and even sweatier, but the people I interact with throughout the firm are generally pretty good people (there's always exceptions). I think something that helps Jefferies is that it's sort of in a unique no-mans land between EB/BB/MM where no banker is like super elite "I'm at top XX firm, i do things this way" and no one really has a chip on their shoulder either. On the junior level, we see tons of laterals from smaller MM firms (and few from BBs), but have yet to personally meet someone who wanted to move from JEF to a "higher-ranked" BB/EB.
Hope that helps. It's investment banking and its not always the most glamorous or easiest thing in the world, but I've had a fairly decent experience so far.
bump
I think this is a pretty fair description of JEF that also mirrors my impression that it overall is a decent place to be. CEO Rich Handler is definitely selling the firm well on Instagram these days.
Regarding clawbacks, I can confirm the details above. There are no clawbacks for the junior layer. I recently received an offer to lateral as Associate (1) and there were no clawback in the contract yet at this level.
Having read some of the bad press on WSO that JEF has gotten in the past for their clawbacks, I was naturally quite cautious and questioned them further to get clarity on what to expect. After some discussion with both HR and the MD heading the team, they finally revealed that clawbacks would be introduced at a later point once compensation crossed a certain threshold. They did not want to disclose the exact figure, but said that it usually would be from "Senior Associates and up". It is also worth noting that JEF says that the clawbacks are only intended for people leaving for competitors, and not in case you leave for a role at one of their clients (e.g. PE). Granted they do have some flexibility in the definition of competitor. Considering that they pay all bonuses in cash (as I understand it), it is honestly not as big an issue as I otherwise feared. However, I would clearly have preferred that they were more upfront about the issue so that I did not have to press them to get all the details. (By the way, big thanks to some previous posts on WSO for making me aware of this and preparing me for the talk!).
As a college kid, a lot of people think of JEF as a fun/goofy type of bank where you work hard but the bank cares about you, and I think Handler's instagram presence plays a big part in that. A little disappointing to see him championing causes on instagram but turning around and treating his employees like shit at the same time...
This is accurate. One thing I’ll add is that you get your first introduction to the clawback agreement on the day your receive your AS0 stub.
Incoming summer analyst here, could you shed some light on which groups typically tend to have the best culture and exits? What type of PE exits are common?
I would say that this is false.. I know plenty of people that did A-As or jr. Associate level that are trying to trade up banks or go to boutiques..
Yes - that clawback for Associates is painful but would rather take in junior years than later on
I would agree though that most groups have a strong junior culture and are relatively close
Jeffries CEO posted about their latest lawsuit too v people leaving on his IG lol
Jefferies CEO on PJT email: Moral BS, "this is inhumane" (which it was) and other IG selling tactics
Jefferies CEO on Clawbacks: wERe OnLy SuInG tHe FiRm CaNTOr.
hypocritttttt
I didn't see his insta post or anything but isnt the Cantor thing due to Sage Kelly poaching a bunch of his former colleagues to build out Cantor's various coverage teams? I recall seeing stuff about this but if Sage is bringing a bunch of senior banker over I can understand them being a little peeved. Not sure if they should be at lawsuit level though.
The one I saw that was crazy was someone saying they clawed back his signing bonus because he quit this year to go volunteer at a non-profit during COVID, and they treat literally everything as a competitor (this is just some random dm screenshot on instagram, but its very crazy if true)
What’s the account? I want to read these!
@trustfundterry
Clawback is only at the associate + level. Culture is very much put your head down and grind culture, they expect you to work hard
Heard from a friend that the oil and gas team had terrible culture and it wasn’t just the long hours but the people were tough.
Honestly, it’s awkward when the JEF CEO commented about PJT’s culture instead of checking his own bank.
a lot of misinformation in these meme posts. Let's get a few things straight - at the associate+ level, most banks aside from very small private boutiques will pay a not insignificant portion of your annual comp in unvested RSUs that will vest over 3-5 years. At the MD level total comp is generally 50% RSUs (and sometimes more in a bad year). Rmember - if you leave the bank you automatically forfeit those RSUs.
At JEF they are unique in that they pay 100% cash, all upfront, nothing deferred. However if you leave yes there is a clawback.
Bottom line, is whenever you leave a bank you leave something on the table. So take your pick - would you rather get paid all cash upfront and have to repay a portion, or would you prefer unvested stock that you automatically forfeit...
Disclaimer - I do not work for Jef but I do work for a competitor that has seen it's share price cut in half. You can imagine what option I'd prefer. And it's generally moot anyway, as any move to a competitor will be to buyout those RSUs (or in case of JEF, the amounts paid back).
I assume in terms of the clawback, JEF expects to receive the gross amount paid? How does someone leaving recoup the taxes originally withheld by JEF, given that you received a net amount but the clawback is gross? All of this is assuming you're exiting to industry and/or they aren't willing to make you whole on the clawback.
Bump do you only have to pay back net or do they actually expect gross pay? Because it makes no sense to have to pay back the gross amount when you get withholding taxes and other shit taken out
When MD wants to retire and makes that known to the company years in advance, do they get to keep their RSUs that haven't vested once they leave?
I work at JEF.
Comment above is very accurate re: bonus claw backs — not applicable at the analyst level and at the associate level+ it’s a trade off between all cash with claw backs vs. some cash and some stock that vests.
As far as culture, it’s very group dependent. some of the larger groups are more face time heavy / sweaty. other groups are really chill (as far as less facetime, although total hours may still be 80+) and everyone gets along great.
Could please provide more details on culture/hours by group?
Sure. as a disclaimer, I obviously can only speak firsthand about my own experience, so anything I say about groups other than my own please take with a grain of salt.
As far as my personal experience, I’ll start by saying that I am overall very happy at JEF. My group is not the largest (so not LevFin, healthcare) and in my opinion has a very strong culture. Analysts and associates are all very close socially; VPs are hands on and not above grinding alongside analysts / associates when needed; MDs take an active interest in the development of juniors. That last point is something that I want to highlight - MDs go out of their way to give feedback and directly let you know that your work is appreciated and adds value. It may not sound like a lot, but banking is often described as a thankless job and stuff like that goes a long way. An MD of mine personally went to bat for me at bonus time to ensure I was paid top bucket. Bonuses can be tricky politically since the largest groups like LevFin or healthcare have more leverage in arguing for the best bonuses so it meant a lot that my MD advocated for me.
As far as hours go, i wouldn’t say it’s anything out of the ordinary. Smaller group doesn’t mean fewer hours since deal flow is generally proportionate to headcount. in my group, face time is not important. as long as you get your shit done, no one cares if you step out for a few hours or just head out early in the evening and finish up from home. for me I would say good weeks are 60 hours M-F with no weekend work, rough weeks are 90-100 including weekends. 70% of the time is somewhere inbetween.
As for other groups, I’ve heard that some can be more face time heavy and have less supportive VPs/MDs. I’ve heard anecdotally that some of the larger groups tend to “play favorites” and only give good staffings to a select group while everyone else gets stuck with smaller / lower quality deals.
One caveat I’ll say is that JEF seems to reward people who show the most commitment and loyalty. this doesn’t mean that you’ll get fired for recruiting for PE (in my experience most MDs are supportive of recruiting), but if you are good at your job and make it known that you’re committed for the foreseeable future, people will make sure you are treated (and compensated) well.
Which groups tend to have the best PE exits? Are these typically MM PE shops or MF as well? Additionally, what's the culture at Healthcare/M&A like from what you know?
Exits are basically what you would expect. vast majority is MM PE, MF is not the norm but not impossible. Healthcare and M&A exits are probably strongest, although not by that wide of a margin compared to other groups.
Healthcare, from what I’ve heard, is one of the groups that tends to “play favorites”. while HC is most well known for doing some really high profile M&A deals, they also do A LOT of equity. specifically a lot of $50 - $150mm follow on equity offerings. no exaggeration, lately they’ve been doing like 2 or 3 follow ons a week. from an analyst perspective you’re going to learn a lot less on a follow on than an M&A deal. as a result I’ve heard it can be competitive to get put on the high profile M&A deals and some analysts never do.
I don’t know the culture of the M&A group well enough to comment on it, although everyone I’ve met from that group has been solid / good to work with.
Out of curiosity, what are the Comp ranges (base/bonus) from the analyst level up to VP? Especially for those who show commitment
say “anecdote” again for the people in the back
Not sure how common it is for them to actually try to claw back bonuses on a regular basis from people who leave but in 2017 Cantor poached an entire group from them and Jefferies has been going after those people so the numbers might be a bit skewed for how often try to claw back bonuses from people who leave.
How is TMT viewed? And Industrials?
That's interesting. Mostly I'd heard from people that it was a good culture place - at least until this recent announcements of clawback bonuses.
be thankful for the job or leave?
Coming from the HF/S&T side of things, I have worked at JEF in the past and now trade with them on a pretty regular basis. Clawbacks are part of the game, usually when senior guys jump ship where ever they are going will make there clawbacks whole. Honestly, I would much rather have the clawback then my bonus tied up in vesting stock options or illiquid comp units. Over the years, I have had too many colleagues singing the blues about having way to much tied up in UBS, DB, or Citi stock options. I have friends at shops that give them so much deferred comp vesting over such a long time that they are more or less golden handcuffs.
If Handler spends less time on the damn Instagram, he would fix the culture of this shit place.
.....
Created a temporary account. Take any of the notes for what is worth.
**Clawback:**
The clawback occurs for an employee when your all-in comp exceeds a certain threshold. Recently, Jefferies has been including this for lateral analysts as well.
**Culture:**
Know former employees at the firm. Culture is dependent on group. Former employees in their specific group complained about the toxic relationship between senior bankers and juniors. Note, not referring to hours, you should know you signed up for banking. This is referring to respect and treating people like garbage. Also shown in the recent turnover over the past few years at junior and senior levels in one of their "larger" industry groups that is on the downhill. I know an analyst that quit after 6 months and another that left after a year.
Agree with @dickthesellsider. R. Handler spends an irrational amount of time on social media with misleading marketing of the firm on Instagram finmeme accounts. His management team has made some questionable hires that have led to hiring lousy and toxic MDs/SVPs in the firm.
For the benefit of prospective monkeys looking to get into IB, beware of Jefferies for both bonus clawback and culture. Super shitty when you work hard to get top bucket ranking analyst/associate only to find out they slip under the rug clawbacks. This only burns client relations with former employees looking to leave and is poor branding on their part.
E.g. You leave your stint at Jefferies to go work for a Healthcare/Tech company and you move up to a senior role after several years. The Healthcare/Tech company is looking to go public or sell. You remember they claw backed your hard earned bonus OR reminders of that MD that treated you like an a$$ and yelled at you start coming back and you burn Jefferies by deciding they will not be on your IPO or be your sell-side M&A advisor.
Couple of things you mentioned that may be misinformation:
Haven’t heard of JEF adding bonus claw backs to lateral analyst offers. they do stipulate a “180 day notice requirement” for lateral analysts, probably to deter people from lateraling and then shortly leaving for PE. The 180 days gets dropped to something like 30 days once you get your 3rd year analyst offer. Also heard that depending on your group, ones that are supportive of PE recruiting will ensure you still get your bonus even if you do give notice that early.
Also a stretch to assume clawing back bonuses means they’re hurting due to COVID. 1) claw backs have been around for forever 2) the whole Cantor saga has been going on for years, way before COVID
To be fair, the clawback is only when you exit to a competitor. If you go Corp dev, PE, HF, whatever non-IB - you won’t owe JEF anything.
Close friend of mine works at Jefferies and I have never heard him speak positively of his experience. He's only there because if he leaves he owes the firm tons of money from clawbacks..golden handcuffs. The Instagram stuff is all a show to distract people from the craziness that goes on there.
don’t work at jefferies, know one person who does, but this clawback thing sounds like a nonissue. they’re paying you cash. every other firm doing stock bonuses has a “clawback” too. I’m sure there are some shitty people and things the company has done, but this isn’t one.
No disagreement - clawbacks at "every other firm" are common regardless of cash/stock However, they make sense at banks for senior bankers (MDs or directors) and doesn't make sense for a fresh eyed recent college grad/analyst or associate that may have debt from school. Why chase after a bonus clawback for a mid to late 20 year old (only creates bad will and showing how slimy they can be). It makes sense for MDs or Partners that could take their book of clients with them or are personally invested in the firm.
Sounds like it’s not common at the analyst level though. Associates at my firm are given deferred comp at a certain total comp threshold that they sacrifice if they leave. Part of the business IMO
So healthcare is toxic...we get that.
What other silos arent so bad?
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