There has been an uprising against the bonus tyranny at Jefferies

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Jefferies prime brokers before the uprising

As we suggested pre-Christmas, Jefferies – the only bank so far to have awarded bonuses for 2011 – does not appear to have been very generous. It does not appear to have been very generous at all.

Headhunters say there are a lot of zeroes. “We’ve heard 27% of people got zeroed in M&A,” says one headhunter. “I’d say around 20% of Jefferies people in equities have been zeroed,” says another.

Why the parsimony?

“A lot of the 2011 bonus pool was allocated in guarantees to last year’s hires,” says the M&A headhunter.

“They’re planning redundancies. If you’re zeroed, it’s an indication you’re going to be let go,” says the equities headhunter.

As we also noted pre-Christmas, Jefferies increased its global headcount by a foolish/impressive 26% last year, adding 814 people. It would mark definite change in strategy if it were now to start letting a lot of people go instead.

Jefferies’ Londonpress office did not return a request for comment. However, low bonuses may not be the only source of disquiet. There have been various claims that Jefferies has also introduced a Credit Suisse-like clause allowing it to clawback cash bonuses from employees who defect within a year of getting paid.

And yet, one group of Jefferies employees is standing up to this bonus tyranny. They are: the prime brokers.

“Several executives and other employees in Jefferies Inc.'s prime-brokerage unit threatened to leave the firm in a dispute over issues including a recent restructuring and year-end compensation,” reports the Wall Street Journal today, adding that Glen Dailey, Jefferies global head of prime brokerage, has been in meetings with Jefferies’ ‘executives’ after half a dozen prime brokerage employees threatened to leave.

As we noted in our predictions for 2012, prime broking will probably be an area of recruitment this year. If you work in prime broking, at Jefferies or elsewhere, you can therefore resist attempts to pay you nothing at all or to impose punitive conditions on your bonus. If you don’t, you probably can't, especially if you work in equities.

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