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Compensation Plans
 12 Months Ended
Nov. 30, 2022
Compensation Related Costs [Abstract]  
Compensation Plans Compensation Plans
Equity Compensation Plan. Our 2003 Incentive Compensation Plan, as Amended and Restated ("Incentive Plan"), allowed awards in the form of incentive stock options (within the meaning of Section 422 of the Internal Revenue Code), nonqualified stock options, stock appreciation rights, restricted stock, unrestricted stock, performance awards, restricted stock units (“RSUs”), dividend equivalents or other share-based awards. We also have the 1999 Directors' Stock Compensation Plan, as Amended and Restated July 25, 2013 (the "Directors' Plan"), which provided for equity awards to our non-employee directors.
On March 25, 2021, a new Equity Compensation Plan (the "ECP") was approved by shareholders. The ECP replaced the Incentive Plan and Directors' Plan; no further awards will be granted under the replaced plans. The ECP is an omnibus plan authorizing a variety of equity award types, as well as cash incentive awards, to be used for employees, non-employee directors and other service providers. At November 30, 2022, 4,489,965 shares remain available for new grants under the ECP.
Restricted stock awards are grants of our common shares that require service as a condition of vesting. RSUs give a participant the right to receive shares if service or performance conditions are met, and which may specify an additional deferral period allowing a participant to hold an interest tied to common stock on a tax deferred basis. Prior to settlement, RSUs carry no voting or dividend rights associated with the stock ownership, but dividend equivalents are accrued to the extent there are dividends declared on the underlying common shares as cash amounts or as deemed reinvestments in additional RSUs.
Restricted stock and RSUs may be granted to new employees as "sign-on" awards, to existing employees as "retention" awards and to certain executive officers as incentive awards. Sign-on and retention awards are generally subject to annual ratable vesting over a multi-year service period and are amortized as compensation expense on a straight-line basis over the service period. Restricted stock and RSUs granted to certain senior executives may contain market, performance and/or service conditions. Market conditions are incorporated into the grant-date fair value of senior executive awards using a Monte Carlo valuation model. Compensation expense for awards with market conditions is recognized over the service period and is not reversed if the market conditions are not met. Awards with performance conditions are amortized over the service period if, and to the extent, it is determined to be probable that the performance condition will be achieved. If awards are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.
Senior Executive Compensation Plan. The Compensation Committee of our Board of Directors approved an executive compensation plan for our senior executives for compensation year 2020 (the "2020 Plan"). For each senior executive, the Compensation Committee targeted long-term compensation of $22.5 million per year under the 2020 Plan with a target of $16.0 million in long-term equity in the form of RSUs and a target of $6.5 million in cash for both plan years. To receive targeted long-term equity, our senior executives had to achieve 9% growth on a multi-year compounded basis in Jefferies’ total shareholder return ("TSR") and to receive targeted cash, our senior executives had to achieve 9% growth in annual Jefferies' Return on Tangible Deployable Equity ("ROTDE"). If TSR and ROTDE were less than 6%, our senior executives would receive no incentive compensation. If TSR growth rates were greater than 9%, our senior executives were eligible to receive up to 75% additional incentive compensation relative to our peer companies. If ROTDE growth rates were greater than 9%, our senior executives were eligible to receive up to 75% additional incentive compensation on an interpolated basis, up to 12% growth rates.
In December 2020, the Compensation Committee of our Board of Directors granted our senior executives nonqualified stock options and stock appreciation rights ("SARs"). The total initial fair value of the stock options and SARs were recorded as expense at the time of the grant, as both awards have no future service requirements. The SARs initially provided for settlement in cash but, at the sole discretion of the Compensation Committee, the awards could be converted irrevocably to a stock-settled award. Accordingly, the SARs were initially determined to be liability-classified share-based awards. In March 2021, the Compensation Committee exercised its discretion and converted the SARs to stock-settled awards, and at which time they became equity-classified share-based awards. As a result, a total of 2,506,266 stock options, with an exercise price of $23.75, were issued to each of our senior executives. The SARs included excess dividend rights, which provide for crediting to the executive a cash amount equal to two times the amount of any quarterly dividend paid in the 9.5 years after grant to the extent the dividend exceeds the quarterly dividend rate in effect at the time of grant for each share underlying the granted SARs (including after conversion to stock options). Beginning in March 2021, the credited amounts are converted to share units at the dividend payment date, to be settled by issuance of shares 9.5 years after grant of the SARs. All of the stock options vest in three equal annual tranches beginning December 6, 2021, with a final expiration date of December 5, 2030. For the year ended November 30, 2021, we recorded $48.6 million of total Compensation and benefits expense relating to the stock options and SARs. At both November 30, 2022 and 2021, 5,012,532 of our common shares were designated for the senior executive nonqualified stock options.
In December 2021, the Compensation Committee of our Board of Directors granted each of our senior executives RSUs with a grant date fair value of $8.2 million and performance stock units (“PSUs”) with a target fair market value of $8.2 million. The RSUs have a three-year cliff vesting schedule. With respect to the PSUs, there is a three-year service period, along with performance period measures of fiscal 2021 through fiscal 2023 performance, the threshold level of Return on Tangible Equity (“ROTE”) was 7.5%, the target level of ROTE was 10%, and the upper end was 15%. Any performance below 7.5% will result in forfeiture of all PSUs; 7.5% ROTE will result in receiving 75% of target PSUs; and 15% ROTE or greater will result in receiving 150% of target PSUs. ROTE performance between 7.5% and 10% and 10% and 15% will be linearly interpolated to determine PSU distribution.
In December 2021, the Board of Directors also granted our senior executives each a special long-term, five-year retention grant, termed the Leadership Continuity Grant, with a grant date fair value of $25.0 million. Our senior executives will gain the benefits of the retention award after an additional three-year holding period following the five-year service period.
The following table details the total activity in restricted stock, inclusive across all plans, during the years ended November 30, 2022, 2021 and 2020 (in thousands, except per share amounts):
Restricted StockWeighted- Average
Grant Date
Fair Value
Balance at November 30, 2019
2,008 $22.04 
Grants115 $13.20 
Forfeited(21)$23.38 
Fulfillment of vesting requirement(619)$19.99 
Balance at November 30, 2020
1,483 $22.19 
Grants337 $30.81 
Forfeited(40)$24.92 
Fulfillment of vesting requirement(196)$23.55 
Balance at November 30, 2021
1,584 $23.78 
Grants1,457 $29.91 
Forfeited— $— 
Fulfillment of vesting requirement(902)$24.03 
Balance at November 30, 2022
2,139 $27.85 

The following table details the activity in total RSUs, inclusive across all plans, during the years ended November 30, 2022, 2021 and 2020 (in thousands, except per share amounts):
Weighted-Average
Grant Date
Fair Value
Future
Service
Required		No Future
Service
Required		Future
Service
Required		No Future
Service
Required
Balance at November 30, 2019
10 15,667 $18.83 $21.35 
Grants14 487 $13.20 $15.73 
Distributions of underlying shares— (88)$— $25.48 
Forfeited— — $— $— 
Fulfillment of service requirement (1)(3)2,477 $18.83 $19.80 
Balance at November 30, 2020
21 18,543 $14.99 $20.97 
Grants80 445 $27.10 $30.03 
Distributions of underlying shares— (1,803)$— $26.32 
Forfeited— — $— $— 
Fulfillment of service requirement (1)(53)8 $25.03 $15.52 
Balance at November 30, 2021
48 17,193 $24.07 $20.64 
Grants2,299 472 $33.75 $28.79 
Distributions of underlying shares— (6,453)$— $14.65 
Forfeited— — $— $— 
Fulfillment of vesting requirement (1)(39)1,443 $24.67 $25.38 
Balance at November 30, 2022
2,308 12,655 $33.70 $24.55 

(1)Fulfillment of vesting requirement during the years ended November 30, 2022, 2021 and 2020, includes 1,433 RSUs, 0 RSUs and 2,474 RSUs, respectively, related to the senior executive compensation plans.
During the years ended November 30, 2022, 2021 and 2020, grants include approximately 550,000, 445,000 and 484,000, respectively, of dividend equivalents declared on RSUs; the weighted-average grant date fair values of the dividend equivalents were approximately $28.78, $30.03 and $15.73, respectively.
In addition, the following table details the activity in RSUs related to the senior executive compensation plan targeted number of shares during the years ended November 30, 2022, 2021 and 2020 (in thousands, except per share amounts):
Target Number of SharesWeighted- Average
Grant Date
Fair Value
Balance at November 30, 2019
6,491 $23.13 
Grants187 $15.19 
Forfeited(15)$19.01 
Fulfillment of vesting requirement(2,474)$19.80 
Balance at November 30, 2020
4,189 $24.75 
Grants74 $29.81 
Forfeited(1,396)$25.31 
Fulfillment of vesting requirement— $— 
Balance at November 30, 2021
2,867 $25.43 
Grants537 $35.44 
Forfeited— $— 
Fulfillment of vesting requirement(1,433)$25.43 
Balance at November 30, 2022
1,971 $28.16 
During the years ended November 30, 2022, 2021 and 2020, grants related to the targeted number of shares include approximately 67,000, 74,000 and 139,000, respectively, of dividend equivalents declared on RSUs; the weighted-average grant date fair values of the dividend equivalents were approximately $28.67, $29.81 and $15.82, respectively. During the year ended November 30, 2020, grants include approximately 48,000 of RSUs issued as a result of superior performance pursuant to the 2016 compensation year award. In December 2022, the Compensation Committee of our Board of Directors approved a total of 934,718 RSUs relating to above target performance earned under the compensation year 2020 Plan.
In estimating the fair value of each stock option award on the grant date we use the Black-Scholes option pricing model. The below includes both the options granted in December 2020 and the SARs, fair valued as of the time when the liability settled award was converted to an equity settled option award in March 2021. The following summary presents the weighted-average assumptions used for the senior executive stock options issued during the year ended November 30, 2021:
Year Ended
 November 30, 2021
Risk free interest rate0.8 %
Expected volatility32.9 %
Expected dividend yield2.6 %
Expected life5.8 years
Weighted-average fair value per grant$7.43 

The risk-free interest rate was based on the U.S. Treasury yield for zero-coupon U.S. Treasury notes with maturities approximating each grant's expected life. Expected life assumed options are exercised midway between the vesting date and expiration date. The expected volatility was based on the historical behavior of the Company's stock price using the expected life. Dividend yield was based on our current dividend yield at the time of grant. The fair value of the excess dividend rights was determined by means of a Monte Carlo simulation.
Employee Stock Purchase Plan. An Employee Stock Purchase Plan (the "ESPP") has been implemented under both the prior Incentive Plan and the new ECP. We consider the ESPP to be noncompensatory effective January 1, 2007. The ESPP allows eligible employees to make payroll contributions that are used to acquire shares of our stock, generally at a discounted price.
Deferred Compensation Plan. A Deferred Compensation Plan (the "DCP"), has been implemented under both the prior Incentive Plan and the new ECP. The DCP permits eligible employees to defer compensation which may be deemed invested in our common shares usually at a discount, or directed among other investment vehicles available under the DCP. We often invest directly, as a principal, in investments corresponding to the other investment vehicles, relating to our obligations to perform under the DCP. The compensation deferred by our eligible employees is expensed in the period earned. The change in fair value of our investments in assets corresponding to the specified other investment vehicles are recognized in Principal transactions revenues and changes in the corresponding deferred compensation liability are reflected as Compensation and benefits expense in our Consolidated Statements of Earnings.
Other Stock-Based Plans. In connection with the HomeFed merger in 2019, each HomeFed stock option was converted into an option to purchase two of our common shares. At November 30, 2022, 2021 and 2020, 12,000, 96,000 and 313,000, respectively, of our common shares were designated for the HomeFed stock options.
Profit Sharing Plan. We have a profit sharing plan, covering substantially all employees, which includes a salary reduction feature designed to qualify under Section 401(k) of the Internal Revenue Code.
Restricted Cash Awards. We provide compensation to new and existing employees in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements. We amortize these awards to compensation expense over the relevant service period, which is generally considered to start at the beginning of the annual compensation year.
Compensation Expense. The components of total compensation costs associated with certain of our compensation plans are as follows (in millions):
Year Ended November 30,
202220212020
Components of compensation costs:
Restricted cash awards (1)$196.6 $375.5 $474.3 
Stock options and Stock appreciation rights— 48.7 0.1 
Restricted stock and RSUs (2)43.9 29.5 39.9 
Profit sharing plan10.5 7.8 7.8 
Total compensation costs$251.0 $461.5 $522.1 
(1)Amounts include costs related to the accelerated amortization of certain cash-based awards, which were amended to remove any service requirements for vesting in the awards, which amounted to $0.0 million and $188.3 million for the years ended November 30, 2022 and 2021, respectively.
(2)Total compensation costs associated with restricted stock and RSUs include the amortization of sign-on, retention and senior executive awards, less forfeitures and clawbacks. Additionally, we recognize compensation costs related to the discount provided to employees in electing to defer compensation under the DCP. These compensation costs were approximately $0.5 million, $0.4 million and $0.3 million for the years ended November 30, 2022, 2021 and 2020, respectively.
Remaining unamortized amounts related to certain compensation plans at November 30, 2022 are as follows (dollars in millions):
Remaining Unamortized AmountsWeighted Average Vesting Period
(in Years)
Non-vested share-based awards$124.6 4
Restricted cash awards289.7 3
Total$414.3 
In December 2022, $528.0 million of restricted cash awards related to the 2022 performance year that contain a future service requirement were approved and awarded. Absent actual forfeitures or cancellations or accelerations, the annual compensation cost for these awards will be recognized as follows (in millions):
Year Ended November 30,
202220232024ThereafterTotal
Restricted cash awards$90.4 $106.8 $103.7 $227.1 $528.0