Checks and imbalances

24 September 2020 By John Foley Follow @johnsfoley

The U.S. investment bank is hiking pay by 26% after a record quarter. Larger rivals like Goldman Sachs and JPMorgan will find that generosity hard to copy: Investors and regulators are unlikely to smile upon big bonuses, even if their traders think themselves just as deserving.

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Jefferies Group, the investment-banking arm of Jefferies Financial, reported $268 million of earnings in the three months ended Aug. 31, double the level from the preceding three months. Investment-banking and equity-underwriting revenue each hit a record.

It’s the first major Wall Street firm to report results that include July and August, which often makes it a bellwether for the sector’s trading and underwriting performance.

Jefferies Group set aside $1.9 billion for pay, bonuses and other benefits for its 3,893 employees over the first nine months of its financial year. That’s an average of just under $500,000 each, around 53% more than the same period last year.

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