Lazard Inc
For the period ended May 9, 2024. Filed Mar 21, 2024.
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May 9, 2024 · Filed Mar 21, 2024
Contents
Selected 2023 Compensation Program Highlights
This section generally focuses on compensation awarded with respect to 2023 performance, which includes equity-based incentive awards granted in March 2024 and year-end annual cash incentive bonuses paid in February 2024.
2023 was a year of significant transition for Lazard. After nearly fourteen years as Chairman and CEO, Mr. Jacobs became our Executive Chairman on October 1, 2023. At that time, Mr. Orszag, who previously served as the CEO of Financial Advisory, assumed the role as CEO of the Company. Ms. Soto took on a new role as COO of the Company. Additionally, Mr. Russo and Ms. Betsch served their first full years in their roles as CEO of Asset Management and CFO, respectively. In conjunction with these changes, Mr. Orszag set out the Lazard 2030 plan, which includes a series of ambitious long-term growth objectives and initiatives. We believe the Company successfully executed on all of these changes, which makes us well positioned for future growth.
Compensation decisions for our NEOs in 2023 reflect our continued commitment to prudent compensation practices throughout our organization and acknowledge the challenging performance year while recognizing the strong leadership of our NEOs in taking action to position Lazard to achieve its long-term growth objectives beginning in 2024. The Committee also aimed to make compensation decisions that would create direct alignment between our key leaders and our shareholders and retain our key leaders to continue to execute on our growth strategy.
Changes in our current CEO’s awarded compensation from year to year align with changes in our revenue and operating income, demonstrating that our compensation outcomes are linked to company performance.
| • | Performance-based compensation represented approximately 92% of 2023 total compensation (comprising salary and annual cash incentive and long-term incentive compensation awards) for our CEO, Mr. Orszag, and approximately 88% of 2023 total compensation for our other NEOs, on average.(1) As further discussed under “2023 Compensation for Each of Our NEOs—Compensation Process,” our Compensation Committee granted this compensation after evaluating each such NEO’s performance in light of the significant changes at the Company and our financial results, including our achievement of the goals described above and each such NEO’s individual contributions and actions to position the Company for growth in 2024. |
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| • | In respect of 2023, 75% or more of our incentive-based compensation for our NEOs was delivered in equity-based awards, creating direct alignment between a significant portion of our NEOs’ compensation and the shareholder experience and supporting retention by subjecting all of our NEOs’ incentive compensation to multi-year service requirements. The equity-based incentive awards for our NEOs (other than Ms. Soto) were granted in the form of profits interest participation rights (“PIPRs”) in March 2024, or RSUs (to Ms. Soto) in February 2024, which, in each case, vest three years after the grant date, contingent upon the satisfaction of service and other vesting conditions, and, in the case of PIPRs, the achievement of a condition (the “Minimum Value Condition”), based on an amount of economic appreciation in the assets of Lazard Group. We delivered the remainder of performance-based incentive compensation awarded in respect of 2023 in the form of annual cash incentive bonuses in February 2024, which, to provide a significant long-term retention incentive, are subject to repayment in full in connection with a termination of employment for “cause” or resignation without “good reason” on or prior to March 1, 2027, subject to certain exceptions. |
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| • | As demonstrated by our compensation practices in 2023, we remain committed to our goals regarding firm-wide compensation expense. We have maintained discipline in respect of compensation costs and applied a consistent compensation deferral policy for our NEOs and other employees, which for 2023 resulted in approximately 75% or more of awarded incentive compensation for our NEOs being delivered in equity-based incentive awards that are subject to a three-year service vesting condition and year-end cash incentive bonuses, which remain subject to potential repayment in full as set forth above. |
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