Jefferies' awkward lesson for everyone expecting a giant pay rise

There are some big benefits to working for Jefferies when it comes to bonuses. - Unlike other large banks, you'll be paid entirely in cash, with the downside that you'll have to pay some or all of it back when you leave. However, headhunters say candidates are still keen to work for Jefferies - not just for the cash, but for the bank's reputation for linking pay very strongly to PnL.

Today's full year results from Jefferies suggest this latter relationship might be weaker than supposed. Profits at Jefferies increased by 118% last year compared to 2020. And pay per head? That was up 7.5%.

The discrepancy is informative for anyone supposing that just because they had a great year in terms of revenues and profits in 2021, they will see a comparable uplift in pay - especially at banks where pay tracks both of those things less closely.

This doesn't mean that Jefferies pays badly. Average compensation per head for the bank's 5,556 employees last year was $639k, up from $595k in 2020. That shouldn't be something to complain about, but might be a chance to rethink any expectations that bonuses will rise in relation to the bottom line.

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