Jefferies execs pay for losses
Top execs at Jefferies (JEF) are taking responsibility for the firm’s fourth-quarter swoon. The New York-based brokerage firm surprised Wall Street Monday by saying it will swing to a quarterly loss of 17 cents a share from a year-ago profit of 38 cents, due to “weak results in its high yield and asset management businesses, as well as losses in two principal trading efforts.” Those losses led to the usual terminations of hapless workers and pledges to crack down on noncompensation expense.
But what’s unusual is that the firm’s top two execs - CEO Richard Handler and executive committee chairman Brian Friedman - will feel the latest quarter’s losses in their wallets too. Like John Mack at Morgan Stanley (MS) and Jimmy Cayne at Bear Stearns (BSC), Handler and Friedman won’t get any 2007 bonus as a result of the firm’s late-year pratfall. And in an unusual show of accountability, the two have also agreed to give back millions of dollars in stock they were given in 2006. “If we are asking our shareholders to make this investment for the long-term success of Jefferies,” Handler said, “we should put our money where our mouth is and pay our fair share.” Now if only more Wall Street hard hitters would follow their lead.
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Bully for them, but I’d be more encouraged about the company’s prospects if the CEO would learn some grammar.