Richard B. Handler

Richard B. "Rich" Handler (born May 23, 1961) is an American businessman, and the chairman and chief executive officer (CEO) of Jefferies Group.[1] Handler is also the CEO of Leucadia.[2]

Early life and education

The son of Alan and Jane Handler, grew up in New Jersey, graduating in 1979 from Pascack Hills High School in Montvale.[3][4] Handler received a BA in economics from the University of Rochester in 1983 and an MBA from Stanford University in 1987.[5] Before graduate school, he worked as an investment banker at First Boston, and afterwards he worked as a junk bond trader for Michael Milken at Drexel Burnham Lambert.[3]

Professional career

Jefferies

Handler joined Jefferies in April 1990 as a salesman and trader[3] and was appointed CEO on January 1, 2001,[6] Chairman in 2002.[3] During his time at Jefferies, between 1990 and 2012, shares compounded annually at 22%.[7] In 2010, Handler received a total CEO compensation of $13.4 million, making him the 72nd best paid CEO according to Forbes.[8]

Jefferies executive committee

In April 2012, Handler and Chairman of the Jefferies Executive Committee Brian Friedman formed the Jefferies Global Senior Advisory Board, which now includes James D. Robinson III, Lord Hollick, Michael Goldstein, Bernard Bourigeaud, Dennis Archer, Sir David Reid,[9] Gilles Pélisson,[10] and G. Richard Wagoner.[11]

Egan-Jones report

In November 2011, ratings company Egan-Jones issued a negative report regarding Jefferies that caused a 20% decline in the Jefferies stock price minutes after the opening bell the following morning.[12] This report was found to contain a number of inaccuracies: Jefferies was accused of having 77% of its shareholder’s equity tied up in the same illiquid sovereign debt securities that had just toppled MF Global, neglecting to mention that the position had been hedged, supposedly offsetting exposure.[13] Chris Kotowski of Oppenheimer & Co. made public statements pointing out additional figures in the Egan-Jones report that were 'so grotesquely wrong they should immediately jump off the page to anyone remotely familiar with the numbers.' This included the false claim that Jefferies revenue had declined 37.8% annually over the previous ‘couple of years.’[14] In fact, Jefferies net revenues actually increased by 154% from 2008 to 2011 according to company filings.[15] The Egan-Jones report was described by Kotowski in his research report from November 23, 2011 titled "Another Hack Attack" as 'flat out wrong',[16] and was followed by what Richard Handler characterized as a multi-week public attack on Jefferies by Sean Egan.[13] Handler and the Jefferies management team responded with unprecedented immediacy and transparency, collapsing 75% of this sovereign debt position in a matter of days to prove the bonds were hedged and highly liquid, sharply reducing the rest of Jefferies balance sheet, and publicly addressing the accusations on an almost daily basis.[17] This aggressive and unconventional response resulted in an eventual rebound in Jefferies share price from the November lows.[13]

Rescue of Knight Capital Group

In August 2012, Handler played a lead role in saving Knight Capital Group after they suffered a $440 million loss due to a 'technology glitch.' Together with Brian Friedman, Handler structured and led the rescue,[18] which included making Jefferies the largest shareholder with an investment of $125 million.[19]

Merger with Leucadia

On November 12, 2012, Jefferies announced its merger with Leucadia, its largest shareholder. At that time, Leucadia common shares were trading at $21.14 per share.[20] As of December 31, 2015, Leucadia shares were trading at $17.39 per share.[21] In March 2013, Jefferies merged with Leucadia,[22] and Handler became CEO of both companies.[23]

Rejecting 2014 bonus

In 2012, Handler's pay package amounted to $19 million, more than that of chief executives at some of the largest banks, such as Jamie Dimon of JPMorgan Chase. In February 2015, however, Handler turned down a $2.2 million bonus after Jefferies experienced a difficult last quarter of 2014. The bank's president, Brian P. Friedman, turned down a bonus in the same amount. Each man's long-term stock compensation for the year 2014 was also reduced by 67,000 shares, worth about $1.5 million.[24]

Other professional activities

Richard Handler is also Chairman and CEO of the Handler Family Foundation and serves on the Advisory Council of the Stanford University School of Business.[25] For the University of Rochester, Handler serves on the Board of Trustees,[26] as Chairman of the Finance Committee,[25] and as Co-Chairman of the university's Capital Campaign.[27] Handler has donated $25 million for the Jane and Alan Handler Scholarship Fund (named for Handler's parents) for exceptional students from underprivileged backgrounds with the potential for future leadership.[28]

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References
  1. Jefferies Officers and Directors Listing http://investor-relations.jefferies.com/od.aspx?iid=102756
  2. Letter to Shareholders 2/28/14 http://www.leucadia.com/c-p_letters/luk_c-p2013.pdf
  3. Bloomberg Article 12/19/11 http://bloomberg.com/news/2011-12-19/jefferies-s-intensely-private-handler-lifts-firm-s-veil-to-defend-legacy.html
  4. Hanson, Dana. "10 Things You Didn’t Know About Jefferies Financial CEO Richard Handler", MoneyInc.com, February 2019. Accessed October 19, 2019. "Rich Handler was raised in the state of New Jersey. As a teen, he attended the Pascack Hills High School located in Montvale, New Jersey. He graduated in 1979."
  5. Stanford School of Business Bio https://www.gsb.stanford.edu/advisorycouncil/handler.html
  6. Business Wire http://www.thefreelibrary.com/Jefferies+Announces+Leadership+Change%3B+Richard+Handler+Named+CEO,...-a065822953
  7. Jefferies SEC Report 2012 https://www.sec.gov/Archives/edgar/data/1084580/000119312513027253/d438142d10k.htm#tofc438142_18
    1. 72 Richard B Handler; Forbes; April 28, 2010;
  9. Reuters https://www.reuters.com/article/2012/04/16/idUS117101+16-Apr-2012+BW20120416
  10. Jefferies Press Release http://www.jefferies.com/News/PressReleases/201/272
  11. Businessweek http://investing.businessweek.com/research/stocks/people/person.asp?personId=177132&ticker=GM
  12. Crain's New York http://www.crainsnewyork.com/article/20111106/SUB/311069977
  13. DealBook NY Times http://dealbook.nytimes.com/2013/12/03/an-unexpected-apology-stokes-the-embers-of-a-feud/
  14. Businessweek http://www.businessweek.com/news/2011-11-24/jefferies-note-by-egan-jones-flat-out-wrong-kotowski-says.html
  15. Jefferies Financial Performance http://investor-relations.jefferies.com/Cache/1001188886.PDF?Y=&O=PDF&D=&FID=1001188886&T=&IID=102756
  16. Value Plays http://www.valueplays.net/wp-content/uploads/Handler-Richard-Oppenheimer-Another-Hack-Attack-11-23-2011.pdf
  17. Bloomberg on Handler https://www.bloomberg.com/news/2011-12-19/jefferies-s-intensely-private-handler-lifts-firm-s-veil-to-defend-legacy.html
  18. New York Times http://dealbook.nytimes.com/2012/08/06/knight-capital-skirts-collapse-as-investors-offer-lifeline/?_php=true&_type=blogs&_r=0
  19. Fox Business http://markets.m.foxbusiness.com/quickPage.html?page=32642&content=77699041&pageNum=-1
  20. "Merger Between Jefferies And Leucadia Secures The Investment Bank's Future". SeekingAlpha. November 13, 2012. Retrieved January 11, 2016.
  21. "Leucadia National Corporation Historical Prices". Yahoo! Finance. December 31, 2015. Retrieved January 12, 2016.
  22. NY Times Dealbook http://dealbook.nytimes.com/2014/04/02/handler-leucadias-new-chief-takes-pay-cut-in-new-role/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1
  23. Jefferies Press Release http://www.jefferies.com/News/PressReleases/201/304
  24. Popper, Nathanial; Investment Bank’s C.E.O. Turns Down a $2.2 Million Bonus; New York Times; February 4, 2015;
  25. Forbes Profile https://www.forbes.com/profile/richard-handler/
  26. University of Rochester Board of Trustees http://www.rochester.edu/aboutus/trustees.html
  27. University of Rochester Capital Campaign http://campaign.rochester.edu/volunteer-leadership
  28. University of Rochester press release http://www.rochester.edu/news/show.php?id=3758
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