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The exception we noted above, suffered industrywide by the significant headwinds of global geopolitical strife, lingering inflation, high rates, and fear of recession, is that Jefferies’ return on tangible equity disappointed at 3.7%. Nonetheless, we remain confident that our senior management and the Jefferies team are better positioned than ever today to take advantage of the markets when the current unfavorable conditions turn. We eagerly anticipate the inevitable cycle turn.

With respect to the Jefferies team, we again want to express our deepest and most sincere gratitude to those employee-partners who delivered as they always do for our shareholders and all other stakeholders the best Jefferies has to offer. We remain proud of them and pleased to have them here. Well done one and all!

Thank you very much for your investment and partnership with us. We genuinely hope you will participate in our annual shareholders meeting. If you are not able to participate, we ask you to vote by proxy in support of our recommendations. The proxy materials contain necessary information about the matters on which we are asking you to vote. The Jefferies team is open to addressing any questions you may have. Thank you again for your support.

Sincerely,

The Jefferies Board of Directors

 

 

Jefferies is a leading global, full-service investment banking and capital markets firm that provides advisory, sales and trading, research and wealth and asset management services. With 47 offices in 21 countries, we offer insights and expertise to investors, companies and governments.

This Proxy Statement is being furnished to our shareholders in connection with the solicitation of proxies by our Board of Directors for use at our 2024 Annual Meeting of Shareholders.

Consider other matters that properly come before the meeting.

Shareholders should read Important Information for Our Shareholders beginning on page 80 for additional information, including ways for you to vote prior to the meeting.

Whether you hold shares directly as a shareholder of record or beneficially in street name, you may vote your shares without attending the Annual Meeting. Voting instructions are outlined in the Notice of Internet Availability of Proxy Materials and on your proxy card.

Generally, the deadline for voting by telephone or using the internet is 11:59 p.m. EDT on Wednesday, March 27, 2024. Please read Important Information for Our Shareholders on page 80 for other voting deadlines.

At the virtual Annual Meeting, shareholders will be able to listen to the meeting live and vote. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/JEF2024, you must enter the 16-digit control number available on your proxy card if you are a shareholder of record or included in your voting instruction card and voting instructions you received from your broker, bank or other institution. Although you may vote online during the virtual Annual Meeting, we encourage you to vote via the Internet, by telephone or by mail as outlined in the Notice of Internet Availability of Proxy Materials or on your proxy card to ensure that your shares are represented and voted.

A technical support line will be available on the meeting website for any questions on how to participate in the Annual Meeting or if you encounter any difficulties accessing the virtual meeting.

The meeting webcast will begin promptly at 10:00 a.m., New York City time, on Thursday, March 28, 2024, and we encourage you to access the meeting prior to the start time.

Shareholders will be able to ask questions through the virtual meeting website during the meeting. Questions may be submitted during the virtual Annual Meeting through www.virtualshareholdermeeting.com/JEF2024. The Company will answer appropriate questions during the virtual Annual Meeting.

Barry Alperin retired from our Board effective May 31, 2023, which results in a vacancy on our Board. As previously disclosed, we expect to fill that vacancy with the SMBC nominee once SMBC Group’s ownership threshold crosses 10%.

 

Our directors are elected at each annual meeting of shareholders and hold office for a one-year term. Our Nominating and Corporate Governance Committee considers and chooses nominees for our Board with a primary goal of presenting a diverse slate of candidates who will serve the Board, its Committees, Jefferies and our shareholders, taking into account the attributes of each candidate’s professional skillset and credentials, as well as gender, age, ethnicity and personal background. In evaluating nominees, the Nominating and Corporate Governance Committee reviews each candidate’s background and assesses each candidate’s independence, skills, experience and expertise based upon myriad factors, including the candidate’s individual director assessment. Directors should have the highest professional and personal ethics, integrity and character that conform to our standards. Directors should also have experience at the governance and policy-making level in their respective fields. The Nominating and Corporate Governance Committee will consider whether a candidate for director has a proven professional background that displays the ability to make important judgments as Board members. The Committee also determines whether a candidate’s skills and experience complement existing Board members’ skills and experience.

As illustrated by their biographies and highlighted in the chart on the next page, each of our directors was chosen because his or her background provides each director with the experience and skillset geared toward helping us succeed. Our directors bring to us strong expertise and myriad backgrounds: longstanding executive operating experience; expertise in the financial services sector; accounting expertise; broad experience in such diverse sectors as oil and gas, mining, investment management, retail food, real estate, private equity, communications, media, government and international banking, among others; and a meaningful commitment to community and public service. That wealth of knowledge and experience is ideally suited to our diverse financial services platforms.

We currently have a vacancy on our Board as a result of Barry Alperin’s retirement from our Board on May 31, 2023. We anticipate filling that Board vacancy upon approval of the nominee to which SMBC Group is entitled upon crossing the 10% ownership threshold.

We believe these skills and experience, which we describe below, allow our directors to provide sound and prudent guidance and effective oversight of the Company.

 

We plan to continue the progress made to date by implementing our policy of recruiting diverse nominee candidates.

The Nominating and Corporate Governance Committee is committed to a policy of inclusiveness and seeks members with diverse backgrounds, an understanding of our business and a reputation for integrity. Our director refreshment over the last several years has resulted in a group of independent directors with gender and ethnic diversity, low average tenure, and significant experience. We intend to maintain and leverage those attributes as we move forward.

 

Ms. Adamany was selected by the Board as our Independent Lead Director of the Board beginning on March 28, 2022.

In accordance with our Corporate Governance Guidelines, available on our website, www.Jefferies.com, our Board of Directors undertook its annual review of director independence. During this review, our Board considered all transactions and relationships between us and each nominee for director or any member of such person’s immediate family. The purpose of this review is to determine whether any relationship or transaction is considered a “material relationship” that would be inconsistent with a determination that a director is independent.

Our Board affirmatively determined that each of our non-employee director nominees is independent with respect to board service and service on each of the committees on which they sit. In making this determination, our Board reviewed the corporate governance rules of the NYSE, the principal exchange on which our shares are traded, and considered commercial, charitable, family and other relationships that directors or members of their immediate family have or have had with us. In addition, for our Audit Committee members, our Board also considered the requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and for our Compensation Committee members, the requirements of Rule 303A.05 of the NYSE Listed Company Manual.

Our Board also considered that certain Board members share directorships on unaffiliated third-party boards, and has determined that these relationships are not material relationships and, therefore, do not affect our Board’s determination of director independence.

Our independent directors meet regularly in executive session outside the presence of management. No formal Board action may be taken at any executive session. Our independent Lead Director presides over each executive session and has the authority to call such meetings.

Our Board has standing Audit, Compensation, ESG/DEI, Nominating and Corporate Governance, and Risk and Liquidity Oversight Committees, each of which has adopted a written charter that is available on our website at www.Jefferies.com.

Mr. Barry Alperin retired from our Board effective May 31, 2023, and we currently have a vacancy on our Board as a result. Ms. Gilmartin was appointed as Chair of the ESG/DEI Committee effective June 27, 2023.

We continuously monitor corporate governance best practices, and over the years have made enhancements to strengthen our Board’s independence, ensure robust risk oversight and bolster alignment, communication and transparency with our shareholders.

Additional information about changes to our compensation policies and practices is contained in our Compensation Discussion and Analysis section of this Proxy Statement.

Our by-laws require that each director in an uncontested election be elected by the affirmative vote of a majority of the votes cast with respect to such director. Our Corporate Governance Guidelines include a director resignation policy, which provides that, in an uncontested election of directors, any incumbent director nominee who does not receive the affirmative vote of a majority of the votes cast is required to promptly tender his or her resignation to our Board of Directors. A director nominee will have failed to receive the affirmative vote of a majority of votes cast if the number of “against” votes in respect of such director nominee’s election exceeds the number of votes “for” such director nominee’s election (excluding abstentions and broker non-votes). An election is considered “uncontested” if the number of director nominees does not exceed the number of directors to be elected.

Our Board of Directors will decide, after considering the recommendation of the Nominating and Corporate Governance Committee, whether to accept or reject a tendered resignation. The nominee in question will be recused from the recommendation or decision-making process. Our Board’s explanation of its decision will be publicly disclosed within 90 days from the date of publication of the election results. The Nominating and Corporate Governance Committee and our Board of Directors may consider any factor deemed appropriate during this process.

Our Insider Trading and Anti-Tipping Policy expressly prohibits hedging transactions involving our securities and those of our subsidiaries by our directors, executive officers and all other employees. We believe that hedging against losses in our securities breaks the alignment between our shareholders and our executives that equity grants are intended to build.

Our Board has adopted a written policy for the review, approval and ratification of transactions that involve related persons and potential conflicts of interest. Our Related Person Transaction Policy applies to the following Related Persons: each of our directors and executive officers, any security holder who is known to own more than five percent of our shares, any immediate family member of any of the foregoing persons, any entity of which one of our directors or executive officers is a director or officer (other than when serving at our request), and any entity of which one of our directors or executive officers has a substantial financial interest (other than through us). Under our Related Person Transaction Policy, a covered transaction includes a transaction or arrangement involving a Related Person in which we are a participant and which would require disclosure in our filings with the SEC as a transaction with a Related Person.

Under our Related Person Transaction Policy, Related Persons must disclose to the Audit Committee any potential covered transaction and must disclose all material facts with respect to such interest. All covered transactions will be reviewed by the Audit Committee and, in its discretion, approved or ratified. In determining whether to approve or ratify such a transaction, the Audit Committee will consider the relevant facts and circumstances which may include factors such as the relationship of the Related Person with us, the materiality or significance of the transaction to us and the Related Person, the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to us on an arm’s length basis and the impact of the transaction on our business and operation.

Prior to the combination of Jefferies and Jefferies Group in 2013, Jefferies Group invested in certain private equity funds (Private Equity Funds) managed by companies controlled by Mr. Friedman and the management companies of the Private Equity Funds (Fund Managers). The Private Equity Funds have not made new investments in over ten years and are close to full liquidation. The Fund Managers serve as the investment advisers of the Private Equity Funds and have varying profit participations and other interests in those funds. Mr. Friedman founded the business of the Fund Managers in 1994, seven years before he became associated with Jefferies Group, and the then-Board of Jefferies Group approved these arrangements years prior to consummation of our transaction with Jefferies Group. As of November 30, 2023, Jefferies had investments in the Private Equity Funds of $2.8 million and a remaining undrawn investment commitment of $10.1 million, which we do not expect will be drawn. Jefferies also had an investment in the Fund Managers of $0.05 million and a remaining undrawn investment commitment of $0.2 million as of November 30, 2023. Jefferies Group contributed $0.2 million capital to the Fund Managers in fiscal year 2023. As part of the Vitesse spin-off transaction, Jefferies received a distribution of 696,304 shares of Vitesse Energy, Inc. from the Private Equity Funds. These shares of Vitesse Energy, Inc. were then distributed to our shareholders as part of the Vitesse spin-off. Mr. Friedman, our President, had remaining investments of $0.8 million in the Private Equity Funds and $0.05 million in the Fund Managers as of November 30, 2023. We employ three former employees of the Fund Managers who continue to partially work for the Fund Managers under an arrangement Jefferies Group originally entered into with Mr. Friedman and a Fund Manager in 2005 and a related agreement we entered into during 2014. In fiscal year 2023, the Fund Manager reimbursed us approximately $0.3 million for the direct and indirect costs attributed to these employees’ work performed for the Fund Managers.

We have employed Thomas E. Tarrant, the brother-in-law of our Chief Executive Officer, as Managing Director, Marketing since 1997, three years before Mr. Handler was appointed CEO of Jefferies Group. For his services during fiscal year 2023, Mr. Tarrant was paid $280,330.

Since 2011, we have also employed Michael Cagno, the brother of our Controller and Principal Accounting Officer, as Senior Vice President, Information Technology. For his services during fiscal year 2023, Michael Cagno was paid $336,000.

Messrs. Steinberg and Friedman invested in January 2022 $1.1 million and $1.0 million, respectively, in a syndication offered by our wholly owned subsidiary HomeFed Corporation for a multi-family residential

development at one of its real estate sites. The transaction was conducted at an arm’s length basis, and Messrs. Steinberg and Friedman invested 6.02% of the total third-party capital invested in this transaction and received the same terms as the other investors. In December 2023, there was a distribution from the project of $224,789 to Mr. Steinberg and $204,354 to Mr. Friedman.

In June 2023, Mr. Friedman purchased $3 million in principal amount of the subordinated notes tranche of JCP Direct Lending CLO 2023-1 Ltd., a direct lending focused CLO managed by Jefferies Credit Partners. Jefferies Capital Partners is a wholly owned sub of Jefferies Finance. The total subordinated tranche size was $59.15 million. Mr. Friedman received no favorable treatment for the investment and his terms were no better than other investors in the subordinated notes tranche. Jefferies Finance also provided a leveraged facility to Mr. Friedman in the amount of $1.26 million, that helped fund a portion of the purchase on the same terms Jefferies Finance provided to its other investors price of the subordinated notes.

Our Board believes our directors should also be shareholders. Our Corporate Governance Guidelines require each director within five years of joining our Board to accumulate an ownership position in our equity securities equal to five times the value of a director’s annual cash retainer (currently a requirement to hold not less than $625,000 worth of our shares). All of our directors who have been on the Board for at least five years have met or exceeded our stock ownership guideline.

The following table summarizes information regarding our shares under our equity compensation plans as of November 30, 2023.

During 2023, we granted awards of RSUs and restricted stock covering a total of 1,442,378 shares under our equity plans, representing a rate of equity award grants, or so-called burn rate, of approximately 0.66% of our average outstanding shares. This does not include shares issuable in connection with dividend equivalent units credited in fiscal 2023 or shares purchased under our Employee Stock Purchase Plan or acquired upon deferral of compensation under our Deferred Compensation Plan.

We provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the executive-compensation program for our executive officers as disclosed in this Proxy Statement in accordance with SEC rules in the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure (pages 38 to 62). We hold this vote on an annual basis. The vote on this resolution is not intended to address any specific element of compensation; rather, the advisory vote relates to the overall compensation of our executive officers. We value this vote as important feedback from our shareholders. For more information, see “Compensation Discussion and Analysis - Our Compensation Program - Presentation of Executive Compensation in this Proxy Statement.”

Accordingly, we ask our shareholders to vote FOR the following resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure, is approved.

The function of the Compensation Committee is to advise senior management on the administration of our compensation programs and plans, review and approve corporate goals and objectives relevant to CEO and President compensation, review and approve corporate goals and objectives relevant to the compensation of our other executive officers, evaluate the performance of the executive officers in light of those goals and objectives, set the executive officers’ compensation levels based on this evaluation and assist our principal executive officers in formulating compensation programs applicable to our other senior management.

Our Compensation Committee has reviewed and discussed with our management the Compensation Discussion and Analysis section of this Proxy Statement. Based upon the reviews and discussions, we have recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the 2023 Annual Report on Form 10-K.

Robert D. Beyer, Chairman

MaryAnne Gilmartin

Michael T. O’Kane

Melissa V. Weiler

This Compensation Discussion and Analysis (“CD&A”) focuses on how our executive officers listed in the Summary Compensation Table (our “NEOs”) were compensated for fiscal 2023 (December 1, 2022 through November 30, 2023) and how their fiscal year 2023 compensation aligned with our pay-for-performance philosophy. For fiscal 2023, our NEOs were:

As we highlighted in last year’s 2023 proxy statement, following our disappointing 53% favorable 2022 say-on-pay vote, we conducted additional meaningful engagement with our shareholders – in particular, those shareholders who voted against our plan – to understand their largest areas of concern. We made substantial changes to our compensation program that we reiterate below.

In the chart on the previous page, we highlighted the first point because our discussions with investors during the 2022 proxy season, throughout 2022, the 2023 proxy season and in 2023 made very plain to us that the Leadership Continuity Grant we made in December 2021 (our fiscal 2022) was the top factor that drove not only our 2022 say-on-pay vote but also our 2023 vote. In 2022, our shareholders approved the non-binding say-on-pay vote by 53%. In 2023, that favorable vote rose to 59%.

What is not obvious from those numbers is that, because of the deep and transparent level of engagement the Chairman of our Compensation Committee and our General Counsel have with our fellow shareholders, we know in great detail the votes of those shareholders as well as the rationale for those votes. In particular, we learned that, although our shareholders were satisfied with the general parameters of our plan, and, in particular, satisfied and comforted by the substantial amendments to our plan that responded to their feedback, as a matter of principle – with one exception – they planned to vote against our plan in 2022 to register their dissatisfaction with the one-time Leadership Continuity Grant.

The one exception noted above was one of our larger shareholders that was very frank with us and noted that, because the Leadership Continuity Grant would not appear on our Summary Compensation Table until 2023, it would be voting against our plan in 2023. In many ways, although we were disappointed that we would not have their support, we were pleased and grateful that this fellow shareholder was willing to engage in such an honest and thoughtful dialogue with us. (As we have stated before, we have very detailed and frank conversations with our shareholders who, thankfully, are willing to share with us how they view our plan not only by their yay or nay votes, but also by keeping us apprised about what is driving their votes.)

True to their word, that large shareholder voted against our executive-compensation plan last March. Had they voted with us, our say-on-pay vote would have approached 70%. That is not the goal we hope for in our say-on-pay vote, but we do believe – and, we think, rightfully so based on our engagement with shareholders – that, based on the feedback we have received from our fellow shareholders, they are satisfied with the changes we made that are outlined on the previous page and we have landed on an executive-compensation plan that will, we believe, result in higher and more satisfactory say-on-pay vote results.

Our compensation philosophy remains unchanged: Our executives should be paid fairly, relative to our performance, and competitively as compared with our peers, but only if they achieve meaningful long-term goals for Jefferies and its shareholders. We remain committed to maintaining a long-term view of our business goals, aimed at avoiding the pitfalls of impatience and short-term investment horizons. The principles of our compensation programs include:

In line with the overriding principles of our compensation philosophy, our compensation programs provide for a significant portion of our executives’ compensation to be incentive based. In fiscal 2023, approximately 96% of our CEO’s total target compensation was at risk. Equity is a significant component of this compensation, which we believe provides strong incentives for long-term performance and a direct link to the interests of our shareholders.

 

Our compensation program begins with a targeted incentive compensation amount for our senior executives. This amount is based on benchmarking against our peer group. We believe that targeting compensation using the benchmarking exercises, and offering the potential for upside to the extent that shareholder value is created and the Company or the individual is able to differentiate performance, can appropriately reward our executives and maintain a high-performing culture. Additionally, we believe that making a high percentage of our executives’ compensation dependent on Company performance ensures that they focus on meeting our strategic goals. Finally, having a high percentage of potential compensation tied directly to business results and shareholder value results in our executives benefitting only when performance is actually achieved and when our shareholders also benefit, thereby ensuring we pay only for performance. The elements of our fiscal 2023 compensation program for our senior executives are shown below.

A key aspect of our executive compensation program is that, when granting equity compensation, the decision-making for those awards occurs after the end of the fiscal year. Our Compensation Committee has determined that, much like decisions regarding the amount of any annual bonus payments earned, the amount of equity awards granted should be decided only after an analysis of the Company and the executives’ performance for the year has occurred, based on the performance as measured against weighted pillars of corporate performance as well as individual performance. We believe this furthers our pay-for-performance philosophy by allowing the Compensation Committee to consider performance when determining the dollar value of the RSUs and PSUs granted, the ultimate value of which will then be dependent on the Company’s stock price (in the case of RSUs) and the achievement of performance metrics and stock price (in the case of PSUs) after a three-year period.

These tables summarize the process described above:

Because the determination of equity grants is made after year end, pursuant to SEC reporting rules, the value of those awards is not included in the compensation tables included in this proxy statement, but will be included in the following year. For example, this year’s Summary Compensation Table reports the value of the RSUs and PSUs that were granted in December 2022 in relation to our 2022 fiscal year. The Compensation Committee granted RSUs and PSUs to both of our CEO and President in December 2023 after consideration of their 2023 performance that is described in this proxy statement, and those amounts will be included in the Summary Compensation Table in our 2025 proxy statement.

Our Compensation Committee has adopted a number of best practices that are consistent with our performance-based compensation philosophy and that we believe serve the long-term interest of our shareholders:

For 2023, we determined that our CEO’s total incentive compensation would be $18.9 million (a 24.4% decrease from his 2022 incentive compensation, which itself was a 16.7% reduction from 2021) and that our President’s total incentive compensation would be $18 million (a 20% decrease from his 2022 incentive compensation, which itself was a 25% reduction from 2021). When looked at over the past two years, because significant headwinds caused by global geopolitical strife, a spike in inflation, fear of a recession and general poor market conditions have negatively impacted the entire industry’s performance and our performance, our CEO and President have seen their compensation reduced by 37% and 40%, respectively.

To be completely transparent, and as we will discuss more below, those negative results displease us because we think our top executives are doing a fantastic job, which we think is a view reflected in our share price. With the exception of return on tangible equity (“ROTE”) that was achieved in a very challenging year, our executives have done everything they promised us they would do and everything we asked them to do. That said, financial performance matters.

The table below is presented to show how the Compensation Committee views incentive compensation awarded for fiscal 2023, fiscal 2022, and fiscal 2021. This table differs from how compensation is reported in the “Summary Compensation Table” (“SCT”) on page 56, the format of which is required by the SEC. This table is not intended as a substitute for the SCT. We provide this solely as a tool to demonstrate how we view our CEO and President’s targeted and awarded incentive compensation for these fiscal years.