DEF: Lazard's Shareholders to Vote on Director Elections, Executive Pay, and Auditor Ratification at 2025 Annual Meeting

Lazard Inc. has released its proxy statement for the 2025 Annual Meeting of Shareholders, outlining key voting matters including the election of directors, an advisory vote on executive compensation, and the ratification of Deloitte & Touche LLP as the independent auditor.

Summary

• Lazard Inc. will hold its Annual Meeting of Shareholders on May 8, 2025, to vote on several key proposals.
• Shareholders will elect two directors, Peter Harrison and Dan Schulman, for three-year terms expiring in 2028.
• An advisory vote will be held regarding the compensation of the company's named executive officers (NEOs).
• The appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2025 will be ratified, and the Board will be authorized to set their remuneration.
• In 2024, Lazard's firm-wide net revenue increased by 21% (18% on an Adjusted basis), with Financial Advisory net revenue up 27% (28% on an Adjusted basis) and Asset Management net revenue up 3% (3% on an Adjusted basis).
• The Lazard 2030 Strategic Plan aims to expand the number of managing directors (MDs) in Financial Advisory by 10-15 net MDs annually and achieve stable growth in asset management while pursuing acquisition opportunities in alternative asset management.
• Average revenue per MD totaled $8.6 million for the full-year 2024, exceeding the 2025 goal of $8.5 million.
• The Board of Directors recommends voting FOR the election of directors, the advisory vote on executive compensation, and the ratification of the auditor appointment.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic growth plans. While there are some challenges and risks mentioned, the overall tone is optimistic and forward-looking.

Positives

• Lazard reported strong 2024 results with a 21% increase in firm-wide net revenue.
• Financial Advisory and Asset Management both experienced revenue growth in 2024.
• The company is on track to achieve its MD growth target as part of the Lazard 2030 Strategic Plan.
• Average revenue per MD exceeded the target, indicating increased productivity.
• Lazard is committed to returning excess capital to shareholders, with $303 million returned in 2024.
• The company has a strong focus on corporate governance and shareholder engagement.
• The Board has a majority vote policy for uncontested elections.
• The company has a compensation clawback policy for executive officers.
• The company has an anti-hedging policy that prohibits employees from short-selling Company securities or entering into a transaction involving a put, call or other derivative or hedge on Company securities.

Negatives

• The company was disappointed in its say-on-pay outcome in 2024.
• Ending Assets under Management decreased 8% from $247 billion to $226 billion.

Risks

• The ability to achieve the goals of the Lazard 2030 Strategic Plan is subject to numerous risks and uncertainties outlined in the 2024 Annual Report.
• The company faces competition to attract and retain high-performing executives and professionals.
• The company has identified two primary risks relating to compensation: (1) that compensation will be insufficient to retain talented individuals; and (2) that compensation strategies might result in unintended incentives.

Future Outlook

The Lazard 2030 Strategic Plan includes ambitious long-term growth objectives and initiatives, including expanding the number of managing directors in Financial Advisory and pursuing acquisition opportunities in the alternative asset management space.

Management Comments

• Lazard reported strong 2024 results as a result of close teamwork across the firm and dedication to our clients, as well as improving business conditions throughout the year.
• The Compensation Committee has no plans to grant additional Stock Price PRPUs (or other special one-time awards) to NEOs; but, in any event, does not intend to do so prior to 2030.

Industry Context

Lazard competes with other financial advisory and asset management firms for clients and talent, and the compensation programs are designed to be competitive within the industry.

Comparison to Industry Standards

• The Compensation Committee reviewed compensation levels for 2023 (the most recent year for which comprehensive data for our peers was available), and indicative trends for 2024.
• CAP reviewed year-end compensation levels for comparable positions at the following financial services firms: Affiliated Managers Group Inc., AllianceBernstein Holding L.P., Artisan Partners Asset Management, Inc., Blackstone Group LP, Evercore Partners Inc., Franklin Resources, Inc., Houlihan Lokey Inc., Invesco Ltd, Janus Henderson Group PLC, Jefferies Financial Group Inc., Moelis & Co., Raymond James Financial, Inc., Piper Sandler Companies, PJT Partners Inc., Stifel Financial Corp., T. Rowe Price Group Inc.

Management Changes

Corporate Governance

Related Party Transactions

• The Company made one payment of approximately $31 million under the Amended and Restated Tax Receivable Agreement in 2024.
• During 2024 and 2023, certain of our executive officers received shares of our common stock in connection with the vesting or settlement of previously granted deferred equity incentive awards.
• In 2024, the Company received $30,532,910 for services provided to The Vanguard Group or its related funds and entities.
• In 2024, the Company paid FMR LLC or its related entities $273,495 in connection with these services and received $553,818 for services provided to FMR LLC or its related entities.

Stakeholder Impact

• Shareholders will have the opportunity to vote on key proposals affecting the company's governance and executive compensation.
• Employees are incentivized through performance-based compensation and equity ownership.
• Clients benefit from the company's focus on teamwork and dedication.
• The company's commitment to corporate sustainability benefits communities and the environment.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will continue to engage with shareholders to gather feedback and improve its programs.
• The company will continue to execute on the Lazard 2030 Strategic Plan.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Executive Compensation, Board of Directors, Director Election, Deloitte & Touche, Auditor Ratification, Lazard 2030 Strategic Plan, Financial Advisory, Asset Management, Corporate Governance, Shareholder Engagement, Peter Orszag, Dan Schulman, Peter Harrison, Compensation Committee