Jefferies: Are these rumors true?
Heard from a peer on the street, wondering if anyone could verify? The policy on comp is the one that has me making this post.
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Seniors are jumping ship like crazy right now
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It is an absolute sweatshop nowadays for analysts
3. Any year's bonus must be paid back if you leave before hitting the 4-year mark at Jefferies.. yes, 4 years.
Why would Jefferies claw back your bonus for the last four years? I thought they were performing really well? The only similar policy I've heard is that Centerview will get back the 50k signing bonus from you if you leave before your 2-3 year analyst stint.
Which location? NYC?
NYC from my source
Heard they claw back the gross not net after taxes, which is all kinds of messed up.
I wonder why this isn't news that has made the rounds yet. That's pretty fucked up.
If you're going to claw back, you should claw back gross. Employee can claw back the difference from the IRS.
I can confirm that this is the same at my bank, except it’s 3 years. I’ve also heard that this is the same at Citi. Apparently it’s a new strategy to prevent analysts from leaving ... except they’re not promising they’re going to make everyone associates in year 2. All that’s going to happen is PE is going to just pay out the difference.
When PE shops will finally have a good incentive to hire bottom buckets analysts
Citi??? Jefferies is one thing. The deal flow is solid, they pay all cash, and there's at least a decent chance that your comp will be above market. But Citi...?
Not accurate at Citi... My source is in S&T though so might be different though I doubt it.
Are any other banks besides Jefferies implementing this policy? It is crazy that they expect you to give back a year-end bonus you have already earned with these clawback provisions.
Can confirm (2) for the London office.
Wow, I guess banks are taking the concept of "golden handcuffs" to a new level. 4 years is pretty intense -- not sure, but this will likely backfire in their recruiting efforts
Just being devil's advocate, but it's possible that Jefferies is trying to attract people who really want banking as a career, not as a stepping stone to PE/HF/something else. Not saying it will work, but it's well known that every firm is frustrated by how few talented analysts they can retain and promote into associate roles.
If that is the case. What lovely logic to implement golden handcuffs versus ....treating your employees better so they stay.
Would be interested to see or get opinions on if people think this may ramp up efforts for more MM PE shops, not just MFs, to start formally taking on more high performing individuals at the analyst level that otherwise would have gone to top banking stints?
Can confirm for continental Europe.
It’s nothing new btw; just google it. First reports about paying back bonuses were released in January 2017.
Can confirm point #2..absolute sweatshop...
This is what happens when you work for a company with public shareholders.
Not seeing the connection.
You work for the shareholders, people you don't know and don't give a single shit about you. Not for yourself or your immediate boss (such as in a partnership)
Public company management still has discretion, and capital markets rules and regs typically keep would be bad actors in line.
Pathological behavior within private company walls is often FAR worse.
I disagree. I think it's more working for a company of that size. I've worked for large private companies that do the same thing, but they don't report to any public shareholders.
This is nuts. Your bonus is supposed to be paid based on your performance in the year leading up to the day you receive it. There should honestly be labor laws that prevent firms from forcing employees to pay back ~100k in fees for leaving the bank, especially when you’re not even guaranteed to be offered a spot past your analyst stint.
If you’re recruiting for SA or FT right now, I wouldn’t take an offer from Jefferies without shopping it at literally every other BB and MM firm in existence. This is straight up bs and anyone defending this is a world class bootlicker.
The original post is false. The clawback only kicks in once you make above certain amount, which generally occurs 1st or 2nd year as an associate. Not to analysts.
There is consistent culling of senior underperformers. No one is jumping ship. People that perform are getting paid very well.
How much clawback is typical for A1's?
From my bud in the tech group
Didn't realize they have a good Tech group. Who's over there these days?
This won't answer your question definitively but I know they had a good tech group when I left there in 2014. I was in another group but from my vantage point, HC was the top group by far and no group was a clear 2nd, but Tech had at least as good a claim to 2nd as any other group.
In last 5 years, just looking at LinkedIn I see the senior leaders have turned over quite a bit. Then again that happens a lot in banking, so you'll need someone else to tell you whether the group has weakened or not. But what I can say is that at least a few years ago it was strong.
How would the company force this other than stubbing your final months salary? Can't you just tell them to go kick rocks?
Have you never heard of the court system?
Have YOU seen the AMERICAN court system lately???
So if you sign a contract where a company is allowed to put you in literal chains and all slavery under certain conditions then that can be enforced by the courts your saying? Just seems like this is something that could be argued out in courts by lawyers as it's bonus for past performance not some staying loyalty bonus.
I'm sure they make u sign some contract.
They don’t have clawbacks for analysts outside of the typical sign on bonus.
Associate+ clawback is only when exiting to a competitor
I’m sure their list of competitors is pretty comprehensive
And totally open to interpretation in the courts, which would be costly to find out.
1 is false except for 1/2 groups, 2 is true but its not just "nowadays", 3 is misleading and makes 0 sense in its current wording on this post
Straight up disgusting corporate move if this is true. I hope the company fails and then the government claws back the managements pay.
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What’s the motivation to give the six month noice? Avoids prior bonus clawback?
I've heard this only applies if you leave for another bank, not buyside.
It applies more broadly than just leaving for another bank
Analysts who left for buyside were shafted by Jefferies. Did not matter if you were going to a client or a competitor.
guess to give them time to find your replacement--have heard from friends that they've found themselves severely short handed at times due to departures at the associate and analyst level
Wow, reading this thread, I wonder why they found themselves short-handed of junior bankers?
They’d still have plenty of junior bankers right now if they actually answered the emails of people trying to network with them.
why don't you just get yourself fired if you really wanted to leave?
Jefferies sounds like a terrible place to work at, however, also seems like the only IB still hiring in volume so they can do this to candidates.. I know they hired a ton of Wells people who were laid off after they were fired for the seamless issues.
Seems like other IBs are hiring a lot more selectively.
depends on group
unequivocally true
unequivocally false at least for analysts / associates
How bad is it at Jefferies vs other banks for associates?
I think people are overreacting a bit. Labor laws? LOL. Didn't know Elizabeth Warren was on WSO.
We don't know if its true, and even if its true the clawbacks probably only apply to people who leave for competitors. Probably wouldn't apply at all to analysts leaving for PE or anyone else leaving IB.
Details are important on things like this, hopefully someone on the message board actually has them.
LOL. OP makes outlandish claim (4 yr clawback). Nobody verifies it. At least one commenter says its not true. And I get the MS for saying everyone calm down. Just another week in WSO land.
Welcome to the internet.
Fixed that for you chief
Know a guy leaving for PE and getting owned. Hard pass on Jefferies
Hello there! Would you be able to shed some light on whether this was an incident specific to him or if it happened to other analysts as well? Does the firm do claw backs across cities?
Not sure about geographies. I think this is group-specific as well
And just like that, a website full of staunch "pro-business, union busting, greed is good, govt regulations are bad" College Republicans discover that they are in fact, pro-labor
We're not trying to unionize or anything, we are just sharing info... Hiring is tough, and will only get tougher for Jefferies with these ridiculous policies
Which policies exactly? The 4 year clawback claim by OP hasn't been verified by anyone. The clawback of the previous bonus for going to a competitor has been a Jefferies policy for 5+ years.
If we're talking about taking away an analyst's bonus for going to PE, that is certainly a questionable policy. So questionable that I wonder how true it really is. Is it one incident? Were there unusual circumstances?
You in particular may not be trying to unionize but taking the thread as a whole, there is a vibe of disbelief and outrage. So I'm curious as to what are the actual facts that are getting people so riled up.
What a straw man. Yeah, if we oppose indentured servitude that means we're "pro labor" in the crazy leftist sense. You can oppose these sorts of draconian policies and still be a "college Republican."
Nice cope
It’s just so delicious to watch.
These companies don’t give a rat’s ass about employees. They will never pay you what you’re worth and will always do the absolute least required to keep you coming in and being overworked.
Yup, and that goes for bankers, teachers, auto workers, etc. But, but, if we don't cut taxes, wages and benefits to the bare minimum, how will our American corporations survive?! Won't somebody think of the shareholders!
What a company will pay you IS what you are worth. If you're at a job that pays you more than you could make anywhere else, you're being paid what you're worth. If you're in a job that doesn't pay you as much as you could make somewhere else (all other things being equal), leave.
You realize that "what you're worth" has everything to do with what other companies are willing to pay you right? Such that if all of "these companies" don't want to pay you, you're not worth much.
WAAAAAH IT’S DIFFERENT BECAUSE IT IMPACTS ME
As if neoliberals like yourself who think working class people are racist pond scum were ever "pro-labor".
Yeah, I'd say as the child of a teacher and social worker, my "pro-labor" leanings were the driving force for me crossing the aisle, even moreso than Trump. But I like hearing the WSO silver spoon crowd of country club conservatives pretend they are now the "party of the working class", just because they happen to vote the same ticket.
I can confirm this is true. This applies to London, not sure about the US. They pressure, nearly threaten analysts (yes analysts) to sign 1 year clawbacks, which is laughable. VPs are made to sign clawback for 4 years effectively regardless of where they leave for. There are a bunch of other clauses which are borderline criminal. They also work with a law firm that goes after all people who leave. So think very hard before joining this place that calls itself an investment bank because if you leave you have to repay it before tax. Unless you really want to pull 120hr weeks on pitches for the rest of your life...
Surprising we didn't see a thread about this earlier - wow.
Can you speak to the 1 year clawback for analysts? Do they make you sign that before you receive your year end bonus or do you sign that early on when you accept the offer?
A couple kids from my school are heading to Jefferies this year and they didn't mention signing anything about a 1 year clawback on bonuses when they signed back in the fall (other than the usual 10k signing bonus).
There is no clawback for analysts (at any BB/EB/MM for that matter) outside of the sign-on bonus.....
I can confirm from experience: they first make you sign a contract with no clawbacks.
Then, a few weeks before bonuses, they cut a large group of analysts and associates, team by team over a week.
And then, the following week after the cuts, those that were still around (and relieved enough to have “survived”), got asked to sign clawbacks as an addendum to their original contracts...
True story. How can a company with ethics such as those be a allowed to exist?
Knowing juniors and seniors from that firm, I would avoid working there like one should avoid the bubonic plague.
Why hasn't this been talked about more often on this site then? I've only heard about layoffs like that at firms that are seriously struggling financially. Do you / have you worked at Jefferies? Did you sign that weird clawback addendum?
what if you refuse to sign the clawbacks, do you get cut?
if all the analysts band together and all refuse to sign the clawbacks then there's not much they can do
Yeah but its a classic prisoner’s dilema - is everyone not gonna sign or is just one analyst gonna sign and everyone will rush to change their minds...
This is factually correct but presented in a way that makes it seem so much worse than other banks, and I don't think that's accurate.
"Contract with no clawbacks" is the most misleading part. Yes, the contract has no clawbacks but the contract also doesn't promise a specific bonus either, so it doesn't make sense that the clawbacks should be included.
Jefferies has been clawing back bonuses for those who leave for competitors for a long time, so the idea that they hid this by leaving it out of the contract isn't reasonable.
Also, many banks have some form of clawback. Whether it's unvested stock, unvested 401k, this is standard practice.
Is Jefferies somewhat worse, maybe. But I've worked at an EB that gets a lot of love on WSO and I can tell you the degree of BS I saw there in terms of various scummy HR practices and broken promises makes Jefferies look highly ethical by comparison. So taking this thread on the whole, I think it's pretty misinformed.
spill the tea on the EB - think WSO is the best place to out bad policies.
Thankful to you for this update. I always like to read posts that shares useful information.
I cant figure out if people are talking about Jefferies in particular or if they're talking about their own IB experiences more broadly.
It's Jefferies specifically, no BB I know of does any of this 6 month notice period / bonus clawback and addendum switcheroo / penalizing you for leaving for a competitor/client garbage.
So its confirmed that Jefferies actually does this?
https://news.efinancialcareers.com/us-en/272313/jefferies-clawbacks-bon…
Yes it’s true and yes it’s gross of taxes. It only hit once your total comp was over $250k but they may have changed it for analyst recently. It can make for a tough culture as certain senior guys who didnt get paid but couldnt find another bank to make them whole on their clawback stick around and make life tough for junior bankers. The language is only included in your bonus docs so it’s not in the employment contract. And it includes leaving for competitive activity which has a very broad definition.
Where did you hear it was for comp over $250? Does the broad competitive activity include PE?
I read it with my own eyes.
And yes competitive activity can mean whatever they want it to mean and then it’s up to you to litigate. They usually roll over for PE because they don’t want to irritate Sponsors. Once you make SVP and up you could quit to teach gym and it kicks in.
What I did hear however was that any lawyer will take it up on contingency because it’s not completely kosher that it’s not in the handbook and they spring it on you as you get your first bonus which pushes you above $250k. But lawyers will want ~30% of the savings.
It's partially true. The below is my understanding.
I'm starting FT IB at Jefferies NY this summer and I have a few close friends in one of their top groups (HC/LevFin) from my alma mater. If you are a lateral, you do not have a great contract - there are clawbacks and restrictions on who is eligible for a bonus. There were a few who got a PE gig and were told they would not be receiving a bonus, so some refused outright to continue working.
If you came up through the intern program, you have a comparably great (fair) contract - I know second years who left for PE last year who received and were allowed to retain their bonus. Second years this year also will receive a bonus (rankings were already determined) even if their group knows they are leaving. Some analysts leaving to PE funds (HC and Industrials have great exits from what I hear) were known to be since the 2017 recruiting cycle, and they still will be receiving a bonus. Not subject to a clawback. It's bad business to clawback analyst bonuses as they become clients in the future and Jefferies works with a lot of sponsor-backed companies.
This is consistent with my understanding as well.
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That is insane! It's almost a trap to keep you there for four years. I'm guessing its to help keep their turnover rate down.
Seems like the 4 years is really only for VP and above.
Plenty of Associates make over $250k. A1/A2/A3 salaries alone are 150/175/200.
If you get a 3am call from a Swedish number, pick up. It's the Nobel Prize committee.
Yes, it's true...
Why not just do absolutely nothing and get yourself fired. They can't claw it back then because you did not willingly leave.
I left Jefferies a little over a year ago, and can confirm this is all true.
The clawback you’re describing is applied to associates and up, and I believe only kicks in if your all-in compensation is in excess of $250k (which, it will be, if you’re a top bucket first year associate). They’ve been brutal about holding onto analysts for extended periods when they give notice off-cycle, even if its for a buyside opportunity. Six months is the new standard language in their analyst contracts for notice, as well. Haven’t heard of them going that long yet, but they surely could, and it wouldn’t surprise me. The culture is pretty toxic.
It is definitely an absolute sweatshop for analysts, but I think placements have been improving from what I could tell. I also generally feel that most banks are sweatshops, based on conversations with my peers.
There’s been a lot of turnover there at all levels in the past couple of years. For example, there was a bake-off that I worked on for a client that they also baked-off for about two years prior. If you compared the team sheet between the two decks, which included about 20 people, only one person from the initial deck was still there. Bake-off was lost, with that being cited as a reason.
Healthcare?
Not any more than the typical movement you will see at other (including BB) banks, maybe even less so. Their top groups (healthcare, energy, consumer, tech, others?) have been more or less intact. Jefferies recently poached RBC's head of M&A, Credit Suisse's head of activist defense, JPM's asia co-head of healthcare, DB's converts team, among others. While there have been a few one-off departures from other groups, I wouldn't liken that to "seniors are jumping ship like crazy right now".
This is highly group dependent. Yes, healthcare and energy tend to have rough hours but are among the top on the street and pay well with solid exits (including top-tier MM PE with the occasional megafund, Carlyle I think). Other groups, barring M&A (tech, consumer, A&D, industrials, lev fin) will have the occasional rough week or two every month but are not "sweatshops".
Yes, but a few nuances. Clawbacks do not apply to Analysts, except for the standard 1-year clawback on a signing bonus. Associates and above do have a clawback, but only above a certain total comp threshold. Jefferies pays all cash bonuses, unlike many competitors, and clawbacks reduce every year (meaningfully so after the first anniversary of receiving a bonus). Clawbacks only apply if you are leaving for a competitor (so you keep your bonus if you are going buyside or say, joining a client).
Other banks pay a portion of the bonus in stock, which may have a vesting schedule. This is essentially the same as what Jefferies does, except cash is paid upfront, with the clawback'able bonus decreasing over time. Probably a good incentive to not blow all your cash.
Jeffries still sucks. You are delusional.
Would you be willing to share any details? Would love to learn more about why it sucks and whether it applies to any specific groups (the clawback issue notwithstanding).
People always say that Jefferies Energy is one of the top groups on the street. Do you know if they have a presence in the NY office or is it only in Texas? How are the M&A exits if M&A is also a sweatshop group?
Energy is only in Houston.
This is NOT similar to what BB shops do in paying in stock. If you leave JEF you need to repay GROSS your last bonus, 50% of the one before and 25% of the two before that. When I left my BB I had to forego the stock that was issued and unvested which comprised ~35% of my bonus in any year and vested over 3 years.
What this essentially means is that you need to find another bank to make you whole in order to continue your sellside career at another shop. Once you make VP this is a huge amount to repay and puts you at an enormous disadvantage to other candidiates competing for jobs.
Yeah this is pretty insane...
This isn’t true - other banks are well aware of paying the clawback and more than willing to do it to get good people
This definitely isn't true for summer analysts joining the firm full-time. They only clawback signing bonus should we leave before completing one year on the job. Lots of people leave after two years to go do PE.
I can confirm the horrible rumors about Jefferies. DO NOT ACCEPT AN OFFER AT JEFFERIES OR YOU WILL GET SCREWED BY THE CLAWBACK.
Bonuses at Jefferies are structured like a loan, they gave me a loan which vested/matured over 4 years. So if you got a $100K bonus, you have to pay back the FULL 100% amount if you leave within a year. On the 4th year, you finally get to keep the entire bonus. This amount stacks over time so as you become more senior, the clawback becomes ridiculous.
There are horrible tax consequences. Let's say you earn a $100K bonus, but receive $50K in after-tax cash. When you leave, you need to pay back the full $100K. (My bonus vested over 4 years, 100% paid back if you leave within 1 year, 50% paid back between 1-2 years, etc). When you eventually leave Jefferies, your new firm is expected to pay your clawback which puts you at an absolutely MASSIVE disadvantage to other applicants. So if you jump ship to Citi, they pay you $100K, and you write a check to Jefferies for $100K. But this 2nd check from Citi is AGAIN counted as income, and you need to pay an additional $50K worth of taxes to the IRS next April.
I thought the culture was horrendous and couldn't wait to get out the door. I think the clawback works against the firm as loads of people seem to be rotting in their chairs, hoping to get fired so their clawback problem goes away.
DO NOT WORK AT JEFFERIES.
This doesn't apply to analysts or those leaving for the buy-side right?
This is exatly why Jefferies has the clause...
Had dinner with a friend at Jefferies Hong Kong and he said it is the same in HK...
And why do I get MS for speaking the truth?
geez that was fucked up
Don't think that's true. No way analysts at Jefferies would stay to only make base salary for their two years???
Confirming this is true for associates and above. I left JEF within the last 3 years at the ASO level and went through this.
That's really interesting. I always thought, for some reason, that when you pay back an employer for the salary they paid you, the IRS will basically give you back the tax you paid so that you're made whole.
If I'm right about the IRS making you whole on taxes when you have to return a salary, I wonder if you could pay Jefferies back without getting more income from your new bank...or if there's some kind of deduction you can take for these purposes.
Regardless, your story is more than I need to hear. Forget Jefferies!
I've heard this only applies to departures to competitors. If an associate was to exit to a traditional corporate finance role, on what grounds can they clawback? Anecdotally, I heard an A2A associate left for PE and was able to keep the bonuses because he threatened legal defense on the grounds that his new firm was not a competitor.
Did you lateral to another bank or leave for buy-side / corp? My understanding was that if it's not a competitor, you're good to keep the bonus, but would appreciate clarification...
Lol that's way overblown, this only applies to Associates and above and only if you leave to a competitor (i.e. another investment bank - not PE, HF, Corporate role, etc.). Bonuses are paid fully in cash at every level as opposed to some other banks which may include SBC starting at the associate level (which also have a similar vesting structure FWIW....)
There are many reasons to not want to work at a bank like Jefferies, but this whole clawback thing is something that is written in your contract, not something they whip out to f*** their employees over...
Lol what are those reasons then
if any version of this was true, i would just "stay" at the firm while interviewing for other firms and indicate that i could not start right away, until my previous employer releases me from my contract, but do the absolute minimum of work...i'm talking show up for lunch and then leave...logon, open email, close email, logoff...go home...repeat a few times a week...and if mgmt complains, reply that i'm tired, but i'll see what i can do (and oops.looks like nothing...i can do nothing) and then i'd just wait for them to fire me...in the meantime, get paid to watch netflix.
policies like this won't last very long...they can force you to "stay" but they can't force you to "work"
Except the world of finance is very very small and chances are someone at Jefferies knows someone at the firm you are joining are very high
if i was actually in this situation and currently worked at Jefferies, after getting an offer from a new firm, i would just tell my new firm "Jefferies forced me to sign a contract under duress that i did not want to sign...they are threatening to clawback my prior years bonus if i leave (and i've already spent it)...so either i need the new firm to pay Jeffries on my behalf...or i'll just be a lame duck at JEF until they fire me...my thought process being, JEF is acting like an asshole, and so i have no qualms acting in a reciprocal fashion...what are your thoughts?"
Rich Handler comes off as one of the biggest douchebags alive and seems like an awful person to work under. It is astounding that a global investment bank lets their CEO shitpost on Instagram all day, among other things.
I don’t understand where this misinformation is coming from, but 90% of what is posted on this thread is factually untrue.
Asking out of curiosity and not sarcastically, would you be able to state the true facts?
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