Revving The Engine From A New Start And Happy To Be Driving With You!

Yesterday marked the end of Jefferies’ 2017 fiscal year and today, December 1st, we start with a clean slate and embark on the race called Jefferies 2018.  We really enjoy having a fiscal year-end that is different from those of all our competitors.  First, it is a reminder that we are not a bank holding company, as we did not need TARP or other taxpayer bailout money to survive and stay in business, and we therefore are able to maintain the historical broker-dealer year-end versus one mandated by governments for banks. Second, our November year-end causes us to announce our results first and, while this always puts us alone under the pressure spotlight, we kind of like being ahead of the pack. Third, closing our year at the end of November allows us to do what we always do: fairly assess and quickly communicate annual performance and compensation to all 3,438 employee partners in the month of December, so everyone knows exactly where we stand and can decompress and best enjoy the holiday time with our families. And being the kind of firm we are allows us to explore the options regarding whether we should exercise our discretion, as we did in 2012, to consider changing the calendar year in which U.S. bonuses are paid in response to proposed tax law changes. We haven’t come to a final decision yet, but please know we are seriously exploring this option and will implement it if it is possible. We truly enjoy the fact that our team has “peace of mind” and “clarity” sooner rather than later, versus many of our competitors who drag out the process for months resulting in endless politics, confusion, noise and stress. The fourth reason we like our November fiscal year-end is because it allows us to really sprint right through the holiday period and establish our start to 2018 in the best manner possible. This point we would like to address a little further.

Yes, this is also that time of year where we start to put behind us what happened in 2017 and begin the battle for 2018. Trading pads are marked at zero, investment banking revenues are all backlog, new research reports are just being thought about, our support team is gearing up for new challenges and the opportunity to add new valuable partners begins. On the one hand, just writing about this is exhausting. On the other hand, if you think about the remarkable people we have at Jefferies, the incredible scope of our products, services and geographic reach, our relationships with our ever-expanding client base, our formidable capital position, our never better brand and, most importantly, our unique culture – it is hard not to be eager to get back at it and continue to build together. Yes, we have problems and issues, and there will always be setbacks, but our firm consistently rises to the challenge, successfully navigates volatility and is constantly capable of adaptation, reinvention, creativity and perseverance. The reason for this is very simple: ALL OF YOU!  You care and act like owners and it is contagious.  You treat our firm and our clients like home and family. This shows and makes all the difference in the world.  While not perfect and with plenty of room for improvement across the board, last year was a solid result of all our hard work.  Thank you!  Today, every one of us is at the starting line together in a tremendous vehicle that is full to the brim with high octane petrol. We truly believe the prospect (not certainty) of our best year ever being right in front of all of us. Nobody is happier than the two of us about starting the race once again with each of you.

Ladies and Gentlemen, Start Your Engines!!!

Rich and Brian

P.S. It is a sprint and it is a marathon!