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...
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.
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.
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...
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
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).
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.