Jefferies Bonus Clawback Policy - How it works
It is well known on this forum that Jefferies has a bonus clawback policy that kicks in if you leave the bank to a competitor. A few recruiters I've spoken with have also confirmed that it exists, but none seem to have much detail on the specifics. There also appears to be little publicly available information explaining exactly how the policy works. Apparently this is because the document containing the clawback information is available only in the total compensation statement received when your bonus is paid, with little reference to in the contract etc.
With that in mind, I this it would be useful for us all to piece together a clearer picture here. My focus is primarily on London, but it would be great if people from other offices could add colour as well.
Based on conversations with recruiters and what I’ve been able to find online, my current understanding is as below:
When the policy applies
The clawback seems to kick in only once total compensation is ~£250k, which likely corresponds to Associate 3 and above at Jefferies,
It also only applies if you leave to a competitor (i.e. another investment bank); if you leave to buyside (e.g. PE), it does not apply.
Clawback mechanics
The policy appears to operate on a rolling basis, with the relevant reference dates being each bonus payment date:
- 100% clawback on a bonus if you leave within 12 months of it being paid
- 50% clawback on a bonus if you leave within 25 months of it being paid
- 25% clawback on a bonus if you leave within 36 months of it being paid
The clawback is also repaid on a gross basis, i.e. pre-tax, to reflect the true cost of the bonus to Jefferies.
Additional considerations
1. Comparison to other banks
At the Senior Associate level and above, most banks pay a portion of bonuses as deferred cash or vested shares. If you leave before the deferred or vesting period ends, you forfeit the corresponding portion.
In contrast to most banks, Jefferies pays bonuses fully in cash and upfront (i.e. not deferred). Therefore, the clawback policy seems to be in place to imitate the impact of forfeiting the right to a deferred cash / unvested stock bonus at other banks when you leave .
2. Impact on lateral optionality
If you lateral after Associate 3 at Jefferies, the clawback policy may not actually make things significantly harder. In many cases, banks already buy out unvested stock or deferred bonuses via signing bonuses when hiring laterally at these levels. Presumably, they would treat a clawed-back cash bonus in the same way.
3. Tax considerations (UK)
If a bonus is clawed back, it appears you can claim back the income tax previously paid on that bonus from HMRC. However, National Insurance contributions and student loan repayments cannot be reclaimed.
If anyone has corrections, additional details, or other useful considerations, feel free to add so we have one central source of information on this.
I work at Jefferies
Bonus clawback kicks in at ASO 1 level. Clawback numbers below are based on my actual bonus for 2025
Leave within 1 year: 100%
Leave after 1 year but before 2 years: 38%
Leave after 2 years but before 3 years: 25%
Leave after 3 years but before 4 years: 13%
Leave after 4 years: 0%
And yes it’s the gross pretax amount you have to repay. I’m based in US but that’ll mean you get refunded the tax you originally paid on the amount that was clawed back after you file taxes in the year you repaid Jefferies.
Interesting. Spoke to a couple recruiters in London and the understanding very much seems to be that the clawback over here begins once total comp is above £250k (i.e. not simply as soon as you hit Associate 1) and that the clawback rates are 100% in year 1, 25% in year 2, and 12.5% in year 3.
Would be interested to see if anyone in EMEA can confirm whether this is indeed how it works in London?
Thanks, super useful! Three follow-ups on my end:
No comp threshold just based on title. Only applies to competing banks, not PE or anything else.
At the ASO level, yes it does kind of tie you down since you’re most likely too junior to get a new bank to make you whole, unless it’s a special circumstance like you’re part of a whole team getting poached by a new bank.
At VP+ it’s not that much of a hinderance. Plenty of VPs and above lateral and get their clawbacks made whole. It’s not uncommon for 20-30% of bonus to be deferred stock with similar vesting schedules at other banks. Jefferies still probably ends up being more expensive vs. another bank since the most recent year’s bonus would be clawed back 100%, but if you’re a strong candidate it shouldn’t stop anyone from hiring you.
Thanks! What about the fixed Associate Retention bonus that is paid between A0 and A1 - what clawback policy does that have?
Confirming this is the structure. Generally accepted it doesn’t apply to PE / industry.
Curious if folks think it would apply if going to another bank, but not to Investment banking (ie direct lending / corporate banking / non-M&A roles)?
Currently Associate 2 for reference. I could see it going either way, but I think since JEF doesn’t have a balance sheet, there’s a solid argument to be made it’s not competitive.
quick question - how does Jeff have a LevFin team if they dont have a balance sheet?
they use massmutual or smbc balance sheet who take a % of the fees. jeff itself is not holding the lbo debt on their balance sheet
Yeah you guys need to unionize
Do any other banks do this? This honestly sounds ridiculous.
I believe Baird adopted something like this after their entire Tampa team left in 2024. The team did end up working for a competitor, although that wasn’t the reason they left.
Note: MDs are still leaving for competitors, so not sure holding bonuses hostage was the right “fix” for their issues.
Just asking, if this only applies to competitors, what is stopping someone from quiting and just saying they are going back to school (MBA or PhD) or working in tech/PE and then just going quietly to a competitor?
They check for the holding period after leaving. Know ex-JEF who left for corporate then shifted back to banking and got flagged by JEF legal.
How long is the holding period?
Bump - any color into how long the holding period is?
What if I left JEF to go to an MBA and ended up in banking again after?
Thought exercise: What happens if Jefferies goes bankrupt
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