Author Topic: JEF - Jefferies Group  (Read 595187 times)

twacowfca

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Re: JEF - Jefferies Group
« Reply #490 on: January 29, 2013, 11:09:28 AM »
while I recognize that Handler is an exceptional CEO
sometimes I wonder if such a pay is really in line with the contribution
I guess it's a tradition in the  IB sector but I really don't like it
20M per year is a very big percentage of the profit itself ...
This is probably one of the reasons that I am keeping the LUK position small in my portfolio

Jefferies Grants CEO Handler $58 Million in 2012, Future Pay


http://www.bloomberg.com/news/2013-01-29/jefferies-grants-ceo-58-million-in-2012-pay-future-incentives.html

Jefferies Group Inc. (JEF), the investment bank that agreed to sell itself to Leucadia National Corp. (LUK), paid Chief Executive Officer Richard Handler $19 million for fiscal 2012 and approved $39 million in restricted stock awards for the next three years.


Don't disagree.  I think he did, however, voluntarily waive his bonuses in 2011 when Jefferies was the target of unfounded rumors about major exposure to MF Global fallout.


Parsad

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Re: JEF - Jefferies Group
« Reply #491 on: January 29, 2013, 11:42:56 AM »
while I recognize that Handler is an exceptional CEO
sometimes I wonder if such a pay is really in line with the contribution
I guess it's a tradition in the  IB sector but I really don't like it
20M per year is a very big percentage of the profit itself ...
This is probably one of the reasons that I am keeping the LUK position small in my portfolio

Jefferies Grants CEO Handler $58 Million in 2012, Future Pay


http://www.bloomberg.com/news/2013-01-29/jefferies-grants-ceo-58-million-in-2012-pay-future-incentives.html

Jefferies Group Inc. (JEF), the investment bank that agreed to sell itself to Leucadia National Corp. (LUK), paid Chief Executive Officer Richard Handler $19 million for fiscal 2012 and approved $39 million in restricted stock awards for the next three years.


Don't disagree.  I think he did, however, voluntarily waive his bonuses in 2011 when Jefferies was the target of unfounded rumors about major exposure to MF Global fallout.

I'm also not a big fan of these huge compensation packages, but let's take a look at what shareholders are getting.  The combined vehicle will have equity of $9B or so (I can't be bothered to read the presentation at this second), but assume that Handler achieves 12% on that equity into the future...that's about $1.08B pre-tax for shareholders to start with.  Of which, Handler will be the largest, or at least one of the largest shareholders, in the combined vehicle.  His compensation works out to about $20M a year. 

Nothing like Buffett or Munger's, Jim Sinegal, nor even Prem's, but relative to what he's achieved in the past, the industry in general, and the solution to Leucadia's succession plan...it seems to be fair.  I would have loved to see him take a $1M dollar salary with no bonuses, but those guys are few and far between.  Cheers!   
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twacowfca

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Re: JEF - Jefferies Group
« Reply #492 on: January 29, 2013, 12:56:19 PM »
while I recognize that Handler is an exceptional CEO
sometimes I wonder if such a pay is really in line with the contribution
I guess it's a tradition in the  IB sector but I really don't like it
20M per year is a very big percentage of the profit itself ...
This is probably one of the reasons that I am keeping the LUK position small in my portfolio

Jefferies Grants CEO Handler $58 Million in 2012, Future Pay


http://www.bloomberg.com/news/2013-01-29/jefferies-grants-ceo-58-million-in-2012-pay-future-incentives.html

Jefferies Group Inc. (JEF), the investment bank that agreed to sell itself to Leucadia National Corp. (LUK), paid Chief Executive Officer Richard Handler $19 million for fiscal 2012 and approved $39 million in restricted stock awards for the next three years.


Don't disagree.  I think he did, however, voluntarily waive his bonuses in 2011 when Jefferies was the target of unfounded rumors about major exposure to MF Global fallout.

I'm also not a big fan of these huge compensation packages, but let's take a look at what shareholders are getting.  The combined vehicle will have equity of $9B or so (I can't be bothered to read the presentation at this second), but assume that Handler achieves 12% on that equity into the future...that's about $1.08B pre-tax for shareholders to start with.  Of which, Handler will be the largest, or at least one of the largest shareholders, in the combined vehicle.  His compensation works out to about $20M a year. 

Nothing like Buffett or Munger's, Jim Sinegal, nor even Prem's, but relative to what he's achieved in the past, the industry in general, and the solution to Leucadia's succession plan...it seems to be fair.  I would have loved to see him take a $1M dollar salary with no bonuses, but those guys are few and far between.  Cheers!


Are we perhaps a  little off on the decimal places?  ???

Parsad

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Re: JEF - Jefferies Group
« Reply #493 on: January 29, 2013, 01:25:37 PM »
Tim?  In reference to ROE or equity...?  Cheers!
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twacowfca

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Re: JEF - Jefferies Group
« Reply #494 on: January 29, 2013, 02:17:26 PM »
Tim?  In reference to ROE or equity...?  Cheers!

Sorry, I misread your statement.

Parsad

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Re: JEF - Jefferies Group
« Reply #495 on: January 29, 2013, 02:23:01 PM »
No worries.  Cheers!
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biaggio

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Re: JEF - Jefferies Group
« Reply #496 on: January 29, 2013, 04:17:23 PM »
Compensation package is disappointing.

I am going to take a wait and see approach.

While I would take a 12% return, I would not think he would be worth this pay for such a return.

Very much like how FFH has it set up.

Would have preferred a decent base salary with a sizable stock holding with "bonus" being distributed to everyone via buy back or dividend.

Now if he were to return 20% per year- that would be another $720 million which would make it a decent return on $20 million- though I would think the rest of his management team would have to be given some credit.

I am mindful of what I think Mr Buffett was quoted as saying that it is hard to overpay a really capable operator/manager.

Parsad

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Re: JEF - Jefferies Group
« Reply #497 on: January 29, 2013, 05:12:57 PM »
Compensation package is disappointing.

I am going to take a wait and see approach.

While I would take a 12% return, I would not think he would be worth this pay for such a return.

Very much like how FFH has it set up.

Would have preferred a decent base salary with a sizable stock holding with "bonus" being distributed to everyone via buy back or dividend.

Now if he were to return 20% per year- that would be another $720 million which would make it a decent return on $20 million- though I would think the rest of his management team would have to be given some credit.

I am mindful of what I think Mr Buffett was quoted as saying that it is hard to overpay a really capable operator/manager.

Hi Bill, I agree with you, but Buffett tends to agree with huge pay packages at times too.  I was quite disappointed with the huge payout the CEO of Gillette received when they sold to Proctor & Gamble, but he was perfectly happy at the time. 

I think Handler's pay is what the market would pay him.  My opinion would be that if he owns so much, then his salary and bonus should be lower, but the business industry in general does not feel that way.  Buffett, Prem, Patrick Byrne, etc aren't that common.  Cheers!
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ShahKhezri

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Re: JEF - Jefferies Group
« Reply #498 on: January 29, 2013, 05:27:06 PM »
I also think they have some traders/MD's that make north of $1MM, part of the industry. 

twacowfca

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Re: JEF - Jefferies Group
« Reply #499 on: January 29, 2013, 05:45:09 PM »
Compensation package is disappointing.

I am going to take a wait and see approach.

While I would take a 12% return, I would not think he would be worth this pay for such a return.

Very much like how FFH has it set up.

Would have preferred a decent base salary with a sizable stock holding with "bonus" being distributed to everyone via buy back or dividend.

Now if he were to return 20% per year- that would be another $720 million which would make it a decent return on $20 million- though I would think the rest of his management team would have to be given some credit.

I am mindful of what I think Mr Buffett was quoted as saying that it is hard to overpay a really capable operator/manager.

Hi Bill, I agree with you, but Buffett tends to agree with huge pay packages at times too.  I was quite disappointed with the huge payout the CEO of Gillette received when they sold to Proctor & Gamble, but he was perfectly happy at the time. 

I think Handler's pay is what the market would pay him.  My opinion would be that if he owns so much, then his salary and bonus should be lower, but the business industry in general does not feel that way.  Buffett, Prem, Patrick Byrne, etc aren't that common.  Cheers!

The greatest NA industrialist in the 19th cent, Andrew Carnegie, put such a premium on capable management that his managers became enormously wealthy.  If a manager is truly exceptional, it is hard to overpay.