A copy of the “Tax Cuts and Jobs Act,” a 1,097-page Republican tax bill, including 503 pages of legislative text, is arranged for a photograph in Tiskilwa, Illinois, U.S. (Photographer: Daniel Acker/Bloomberg)

Jefferies Is Said to Let Employees Choose When to Receive Bonus

(Bloomberg) -- Jefferies Group is allowing employees to decide when they’ll receive their bonus payment for work performed this year as U.S. companies and workers try to determine how Republicans’ tax changes will affect their wallets.

Chief Executive Officer Richard Handler asked staff whether they wanted to get their bonus check in December or January, according to people with knowledge of the matter. The New York-based investment bank normally awards bonuses in January, said the people, who asked not to be identified discussing pay issues.

The Republican tax bill, which was sent to President Donald Trump on Wednesday, will cap deductions for mortgage interest and state and local taxes that many wealthy Wall Street employees counted on to reduce their taxes. Some bankers and traders may find it more advantageous to have a bigger income in 2017 with existing deductions in place, while others may benefit from next year’s lower tax rates.

Richard Khaleel, a Jefferies spokesman, didn’t immediately respond to messages seeking comment.

Fiscal Year

Jefferies, owned by Leucadia Corp., is one of the few investment banks that operates on a fiscal rather than calendar year, resulting in its books being closed a month earlier that most rivals. That gives the firm the flexibility to weigh paying bonuses earlier.

While larger investment banks likely can’t change when they deliver 2017 cash bonuses, they could move up the delivery of previous years’ awards. On the last day of 2012, Goldman Sachs Group Inc. accelerated delivery of $65 million in stock awards to its executives hours before new tax rates took effect.

Many on Wall Street have been poring over the bill’s details, often with accountants and lawyers, to determine how the rate cuts and loss of deductions will affect them. Based on their circumstances, some Jefferies workers opted to keep their bonus check coming in January, one of the people said.

Jefferies set aside $1.83 billion for employee pay in the fiscal year ended Nov. 30. Divided among the firm’s 3,450 workers, that works out to an average of about $530,000 per employee -- the most since the financial crisis. That number doesn’t represent an individual worker’s actual pay.

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