UPDATE 3-Jefferies CEO made $45 mln in 2012, including grants

Tue Jan 29, 2013 6:51pm EST

* Handler's total includes $39 mln in grants for 2013-2015

* CEO's pay was $19 mln, excluding future grants

* Jefferies agreed to be bought by Leucadia National in 2012

* Handler due to take reins of the combined company

By Rick Rothacker

Jan 29 (Reuters) - Jefferies Group Inc paid Chief Executive Richard Handler $45.2 million in 2012, making him one of Wall Street's most highly compensated executives, according to a securities filing on Tuesday.

Handler's pay package included $1 million in salary, a $5 million bonus and $39 million in stock grants that would cover 2013 to 2015, according to the filing. The long-term grants vest over time, based on the CEO's performance in those years.

The U.S. Securities and Exchange Commission tallies pay that was expensed during the company's fiscal year to calculate total compensation. Handler made $19 million in 2012 when counting a $1 million salary, a $5 million bonus and a $13 million stock granted under an earlier long-term incentive plan.

Jefferies, which is considerably smaller than the biggest Wall Street firms, handed its CEO a sizable compensation package at a time when some rivals are cutting pay and slashing their staff to reduce expenses in the face of challenging market conditions.

JPMorgan Chase & Co halved Jamie Dimon's bonus after the bank took losses on its "London Whale" trade, reducing his pay to $11.5 million for 2012. Morgan Stanley paid CEO James Gorman $6 million, down about 30 percent excluding long-term incentive compensation.

Goldman Sachs Group Inc CEO Lloyd Blankfein bucked the trend, receiving a more than 50 percent increase in restricted shares as part of his bonus for 2012. [ID: nL1E9CIII4]

Jefferies has been trying to press its advantage as a smaller, more lightly regulated bank by paying employees with more cash. In Tuesday's filing, the mid-size investment bank said it was granting restricted cash instead of restricted stock to employees generally for 2012 in "recognition of the more challenging times faced throughout our industry." Bigger banks have faced shareholder and regulatory pressure to pay employees with more deferred compensation, and paying more bonuses with restricted shares.

Jefferies' shares rose 35 percent in 2012 as the investment bank agreed to sell itself to its largest shareholder, Leucadia National Corp, and financial stocks in general rebounded. Handler is set to take the reigns of the combined company from Leucadia CEO Ian Cumming.

The investment bank had net earnings of $323 million in the year ended November, up from $286 million in the same period in 2011. In comparison, JPMorgan, the largest U.S. bank, had profits of $21.3 billion in 2012.

Handler made $1.2 million in 2011 when Jefferies' stock dropped 48 percent amid questions about its European exposure, according to a tally under SEC guidelines. In 2010, he received $47.3 million, including grants for past and future years.

Handler volunteered to have his 2012 bonus reduced by $3.1 million from the $8.1 million he could have received, according to Tuesday's filing. All of the bonus can be forfeited in the first year for reasons such as leaving the company for a competitor. He received no bonus in 2011.

In September, Jefferies executives said the investment bank aimed to pay less of its revenue to employees over the next two years but will not come down to the 50 percent ratio that many industry peers target.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.