Jefferies is continuing the trend for trimming compensation for its ‘employee partners’.
The bank’s first quarter results are out today and they reveal that compensation per head fell 19% in the first quarter, from an average of $144k in Q1 2011, to $116k in the first quarter of 2012. This followed a 16% drop in employee-partner compensation last year.
Jefferies also reined in its leverage ratio, from 13.8 to 9.5 over the same period. For the first time in recent history, it also ended the past quarter with (47) fewer employees than it began with.
Despite cutting both headcount and pay, Jefferies net profits fell 12% year-on-year. Takeaway: with lower leverage, banks can afford fewer employees and must pay them less.
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