Q&A with Jefferies' Rich Handler

Good Morning,

With financial markets closed for Martin Luther King Jr. Day, we decided to switch up Exec Sum this fine Monday morning. Last week, we kicked off 2023 with a Q&A session with Jefferies' CEO (and Litquidity athlete) Rich Handler. Today, we're sharing that Q&A with you! This transcript is littered with gems about life, career advancement, leadership, and a Step Brothers quote or two (see Question 19).

We hope you enjoy!

1. Given the client-facing nature of your business and being the CEO of a reputable bank, how do you manage expectations amongst employees and clients?

This is one of the hardest parts of the job. I always try my best to under promise and overdeliver but sometimes the circumstances don't allow. I find being honest, transparent, and open along the way and sharing real time setbacks helps people better understand and accept reality. I also always focus on the long term because that is when success or failure can really be measured. People who focus on the long term always eventually do better than people who are caught up in the short term.

2. How has being the CEO of Jefferies Group affected your life outside of the company?

I think being happy and fulfilled in my job has made my outside life even better. Like everyone, I go through very crappy periods, but I love what I do, and I feel challenged and like I'm making a difference in something I believe in, and that is very motivating. Becoming a CEO just made it harder for me to blame any of the negatives on anyone else. Believe me, my wife, kids, and close friends certainly don't cut me any slack or treat me better because I'm a CEO! And it's *Jefferies, pls fix.

3. What is your advice for a recent college graduate trying to get a job during a recession?

Don't take the environment personally. Sure, it is harder, but this is not a reflection on you or your abilities. You will realize that the world is cyclical and always will be and the sooner you accept that, the better. That said, it means you must work harder to network and broaden your search, so you have as many eggs in as many baskets as possible. Be specific and not generic in your interview sessions, show strong interest and desire, and make yourself the best candidate you are capable of being. You might have to take a position that you think isn't perfect, but it is a toe in the door, that's what is important. It is easier to distinguish yourself in tougher times than better times when all boats float high. Stay positive.

4. What is your leadership philosophy?

I do my best to emulate the kind of person I would want to follow. I am inspired by people who are honest, hardworking, competent, accessible, long-term oriented, passionate, driven, committed, consistent, have a sense of urgency, well-rounded, happy, humble, funny, and know where they want to go.

5. What do you see as the three most important qualities for leaders to have in the future. And how can our society and education system prepare for them?

Integrity, empathy, and vision. I think the more people we bring into functioning societies and provide them with a great education, the more qualified candidates will emerge as future leaders. This is one of the many reasons why diversity and inclusion are so important to all our futures.

6. What is the best way to spend your money?

It is great to have wonderful things, but the best and most satisfying way to spend your money is to smartly help those in need so that they can eventually best help themselves.

7. In what time horizon should young professionals think in? 5 years? 10? 20?

Ideally, everyone would make career decisions thinking 10-20 years out, but that is not realistic. I think the most one can ask juniors to think is 3-5 years and for seniors, 7 years. Those time horizons are understandable and will force you to have the mindset to work through tough stretches, which we all go through. This doesn't mean you should have blind faith and just keep your head down for either of these periods. You need to constantly check in with people to make sure you are on a good track, understand the areas that you need to improve upon, and make yourself aware of all aspects/opportunities within the company you are working. Constantly meeting new people throughout your firm and getting access to clients and making sure you are constantly learning and growing are all critical objectives during these time horizons.

8. Rich, would you advise us, subordinated graduates, to give our points of view to more senior individuals or keep ourselves quiet and grind in silence? As recent hires, we sometimes have different points of view that may be relevant or not at all. What is your take on that?

Everyone who is senior today was junior at some point earlier. Don't be intimidated by any of us. That said, you need to know when to speak up and how to do it. Reading people and timing are two very important skills. Yes, speak up and feel empowered to share your suggestions, but know how and when to do it. And realize, you may be very right, but you also may not have all the facts and you may be very wrong. That is ok. That is how you learn.

9. How should one pace themselves in order to achieve a fulfilling career and hitting their peak at the right time? (first year professional)

Exercise, eating well, sleeping and have a life outside of work are critical to long term success. Starting out, especially in the very early years this will be out of whack, but it doesn't mean you can't force some minimum modicum of balance. You need to do it, or you will burn out and be of no good to yourself or your firm. It can also be tough as you get more senior to find this balance, but the professionals I know who are most successful all have lives outside of work. If they can do it, so can you. But you need to be efficient at work, not care about stupid "face time," and advocate for yourself when you need help.

10. What is one “work smarter not harder” tip for success as a junior in banking?

Many juniors are so eager to please that they don't fully listen to the assignment or ask proper questions upfront, either because they don't want to appear like they don't understand, or they are intimidated for other reasons. Then they just start spinning their wheels and producing product. Often, they could save themselves a lot of time and effort by fully understanding the request and more importantly, the reason for it and all the background and expectations of what the analysis is going to be used for. Sometimes an enormous amount of work is needed, but sometimes less is more. Why not know for sure upfront?

11. If you could change one piece of legislation, what would it be? Asking for a friend.

Perhaps not the answer your friend was looking for, but I would like Roe vs. Wade to stand.

12. How do you cultivate resilience and mental toughness to overcome challenges and setbacks, both personally and professionally?

I think you have to keep everything in perspective and draw your strength from the things that matter most in life, namely health, family, and friendships. If those are ok, it is easier to manage the inevitable setbacks that occur throughout one's career. When health and family are not good, that is when resilience and toughness are truly tested. In all of these situations, that's where you have to dig deeper and rely on your inner character and for those like me who believe, faith. For me it helps to look around the world (and our country) and see all the hardship and pain that most people go through and that serves as a great reminder why I should toughen up and just deal with my problems, which when compared to countless others, aren't even worth complaining about for a moment. I'm not saying that isn’t real and it is always easy, but being aware and giving back to those with much bigger challenges provides me with the clarity that is needed when I'm tired of the fight.

13. How do you manage the decision-making process, seeing as you have a duty to both shareholders, the board and employees, what goes into the decision process, and how do you know what you're planning to do is right?

We have to balance the needs of the employees, clients, shareholders, bondholders, and the Board. In the short term, there are plenty of conflicts in trying to please any one of these groups. However, if just one of them is not satisfied, the others will all eventually have a problem which is why you need balance. By focusing on the long term and making compromises along the way so each group will feel heard, appreciated, respected, and rewarded, you can build a company. Fortunately, they all align in the long term on what is most important: happy and motivated career-oriented employee-partners, successful execution in solving important problems and appropriate return on capital with the right risk profile. When employees, clients, shareholders, and bondholders are happy, the Board smiles. Then they all ask, "Now what are you going to do for us?" I love it.

14. What is the smartest (best) way to get into the financial & economic world from a somewhat young age (15y to be exact)?

Read everything related to finance, business, companies, research reports, financial filings, etc... The internet has leveled the field and knowledge is available for all. You are ahead of the game if at 15 you have a sincere interest in all of this. Do your very best in school. Take extracurriculars that you are passionate about, and talk with your parents, your friends' parents, and anyone else you respect and can learn from about what they do. Most importantly, have smart and safe fun at 15 with your friends but also be brave in high school. It can be a tough period, but it will be an important part of who you are when you get older. Good for you for writing in!

15. How do you manage always wanting to accomplish more / doing better and being happy with what you’ve done. When is enough?

I don't know of a bell that goes off that says time is over for your career, and I don't work based on reaching a certain amount of net worth so I can declare victory. The most successful people I know have a passion for what they do and are motivated by helping to create and build something that makes them proud. They also greatly enjoy and value the people they work with, and the team orientation is such that nobody ever wants to let the others down. That said, you must reflect along the way and appreciate and enjoy what you have already accomplished. And I do. The truth is that every time I pause to think about how fortunate we are, it motivates me to work on all the things that we can do better and the opportunities ahead that are now within reach because of all our hard work to date. I guess when I stop feeling that way, it will be enough.

16. Should I stick to one job and give it my best for several years or jump to new opportunities?

The way you asked this question makes me wonder if you are really committed to what you are doing and are passionate about it, or if you are just punching a ticket and passing time. Lots of people have jobs. In my opinion, the more fortunate ones are the few that have careers that are meaningful and personally rewarding. You need to decide what is important in your life. It's fine to just have a job that puts food on the table and money in the bank and then switch whenever a better opportunity comes along. No judgement there – it's better to know yourself, and it's ok to decide the sacrifices that come with truly caring about a true career are not worth it. Just don't be surprised that this attitude will have costs associated with it down the road and make sure you anticipate the likely outcome properly.

17. How to survive CEO and management changes as a young executive leader?

Tough one. I think the best way is to always focus on what is best for your clients, co-workers and company and live your life every day that way and avoid getting caught up in super senior politics as much as possible. If you do that, no matter what happens at the very top, your human capital will be optimized, and you will be incredibly valuable internally and externally. Change at the top can bring great uncertainty, but it can also bring opportunity. Don't make a quick "knee jerk" reaction because other people are being emotional. Meet the people and do the work for yourself. People who are good actors every day and have sterling reputations inside and outside the firm will always do well in the long term. And even new management will most likely come to that conclusion. If not, their loss. Good luck.

18. What Makes a Great CEO?

That is not a question for me to answer. The people in the company, clients, shareholders, and the Board decide what makes a great CEO. What I do know is that if you think you are in charge of that answer, you are probably not going to be a very good CEO.

19. After making eight figures and losing it all what advice do you have on rebuilding?

If you made it trading crypto, you weren't as smart as you thought you were when you made it, nor dumb as you may feel now that it is gone. As Dale Doback says, "Look, we can bicker about this all night, what's done is done, Dad. Are you guys gonna invest or not?" Seriously, the first thing you should do is not torture yourself over it anymore. If you can allow yourself to get over it and just focus on the lessons learned, it will be more valuable than the 8 figures you lost. Diversification, humility, and the understanding that net worth does not equal self-esteem are some easy lessons that come to mind, even though I don't know you. You clearly are capable of focusing and prioritizing opportunities. I would devote all of my time to the next one and be cognizant of all the previous lessons and just get to it. It's the start of a new year so no better time to forgive yourself, be thankful for all that you have besides the money and start climbing the mountain again. This time, perhaps hike a little more carefully and pick a mountain with a base that has more substance to it (I'm not saying all crypto is bad). Good luck! R

20. What advice would you give to your younger self in earlier 20s and advice to college students?

I wrote two lists for my 4 kids that I put out on the internet for anyone who wanted to read them: 1. 100 things I wish I knew before I went to college and 2. 100 things I wish I knew after I graduated college and entered the real world. You can Google them or look through my Twitter or Insta highlights to see the lists.

21. Do you consider climbing up the ladder in the finance industry a better option than entrepreneurship?

It's more important to do what you enjoy and are passionate about. You can be an entrepreneur at any company if you want to. If you act like an owner, it doesn't matter if you started the company. If you keep acting every day like an owner, eventually you may even become one.

22. Did you f*** up on-cycle PE recruiting and that’s why you’re still in banking lol?

Worse than that. Apollo started the day I joined Jefferies in 1990. I did the valuation work for their purchase of the First Executive portfolio which turned out being the first investment they made and the foundation of their firm. They paid me $500k at Jefferies for the work and it was so much money, I thought I was a genius. Turns out, not so much :)

23. How do you think about risk in a manner to keep driving forward, but also to not be caught flat footed when situations turn?

The most important thing in being part of the leadership of a company is to understand the privilege you have for your position and the responsibility on your shoulders to never betray the trust that your co-workers and stakeholders have in you to protect everyone from significant harm. Companies are fragile and get sick and sometimes die. Arrogance manifests itself in excessive risk and the streets are littered with much bigger companies than Jefferies that disappeared almost overnight because of hubris. Some were lucky enough to get bailed out by the government or taxpayers, but we never counted on that largess for ourselves. That said, we are in the risk business and have to make hard choices every single day. We are allowed to make many mistakes in this regard, as long as we don't repeat the ones we made, and we never allow ourselves to make one(s) that could jeopardize all. And it takes a team to stay out of trouble. People must be empowered to share bad news quickly and no matter what, the messenger can never be penalized. Also, the people allowed to take risk must act like owners themselves. That's why culture and trust is everything. I could answer this question for another hour.

24. What is the best way to begin trading the markets as a career, not just a “side hustle”?

A lot of people think that starting to trade the markets is a smart way to make some extra cash. I don't think it is or at least, I'm not smart enough to just start trading. I liken it to gambling without the free drinks. This always works in unique periods (when things always go up) like until the past year. People usually develop a false sense of invincibility, and the stakes get higher and higher until there is a correction. I've seen this happen to people throughout my career. People don't realize that generally, the market is very efficient, and you are competing for every single penny or tick against the most sophisticated investors on the planet who have teams assessing every company and market. I believe in being able to do bottom-up analysis and understand what I trade. That's why I went to school and studied so hard and why I spent time in banking before I started to trade. That said, I still don't trade my PA and haven't in over 30 years. Partly because of the conflicts of my job and partly because I know it's a losing game, at least for me. Instead, I chose to invest in our company (and myself) and then spend the time helping to build something that while complicated and has constant challenges, is durable and will become ever more valuable in the long term... hopefully. I have invested in Jefferies for every one of the 32 years I've been here. That said, sometimes I look very stupid for this strategy, and I acknowledge others might have better skills than I do in outright (blind) trading.

25. Can Jefferies survive without you as CEO?

100%. We have a great team and breadth all around me. I need Jefferies much more than Jefferies needs me. Please keep this between us and don't tell our Board or Shareholders, but I suspect they might have an inkling.

26. In the era of instant gratification, what continuous techniques should rising professionals use to avoid envy and entitlement, and stay focused on a fulfilling life and long term goals?

Few things make me angrier than people who want their friends to be successful, but not too successful. Envy is a horrible emotion and entitlement is almost just as bad. Success takes a lot of effort, consistency, and time. That is why you have to like what you do and the people you are doing it with. I don't know of any short cuts and of all the people I know that are super successful (and I know a lot of them), they don't know of any short cuts either. Well at least they haven't told me. Maybe they don't want me to be too successful.

27. Rich you’ve said that one of the best skills to have is being an accurate judge of character. Is this a skill that can be acquired or is it natural? How can you improve on this skill?

I think it is innate, but you can work on it. First, you have to honestly care about people and truly want to not only hear, but actively listen to what they are saying. That is one of the most important ways you can truly get to learn about someone. This means you need to be quiet and not be the focus of attention. Minimal interruptions until they are done speaking. For many that is hard to do. You need to ask the right, thoughtful and probing questions in a relaxed and honest manner. It is important to learn people's motivations, fears, goals, historical mistakes, how they made important decisions at critical inflection points, and how they perceive themselves in action. There is a lot to it, but it all comes down to getting people to trust you, never betraying that trust, and having an open and honest conversation about them. This, combined with observing people in action and seeing how they interact with all other types of people can really help you assess the character of almost anyone. It is an art and not a science. If you, do it from a place of integrity and with good intentions, the results can be fantastic for you and the person you are trying to get to know.

28. What’s the best advice you can give someone in their mid 40’s who is looking for a new career in this economy?

Don't fret about "this economy." It has nothing to do with the career you will have in the long term or your success. It is harder during tough times to get the right opportunity, but often easier to make a difference and learn and distinguish yourself. You are in your mid-40's and while still very young, you are at the point where you don't want to waste time by having a bad next step. That means doing your research on the industry, company, and people you next want to work with. You need to understand how you can add value, how your existing skill set will help, and what new skills you will need to learn to supplement yourself, so you have an effective future at your new home. Most important is assessing the people you will be working with and the fundamental business of the new company. If you are excited about both and willing to perhaps take a step back in title or compensation because they are taking a chance on you versus promoting within, you will have the opportunity to begin to build a new career. Give it your 100%. Good luck.

29. If you weren’t a CEO, do you think you’d still follow a path to financial independence? This is a topic never taught in school, sadly.

I was fortunate enough to be financially independent well before becoming a CEO. I always followed a path to do something I enjoyed and was passionate about and was fortunate that the financial rewards aligned because my interest was in business, finance, and entrepreneurship. There are many other more important careers that might not be as rewarding financially but afford other measures of success that many people value beyond dollars.

30. How do you and Martha complement each other, and what should one look for/keep in mind when seeking a life partner? Thank you!

I have said often that the most important decision you can make (and this means for your business career as well) is to choose the right life partner. She and I are very different in so many ways. She is a writer, environmentalist, artist and incredibly spiritual. She reads voraciously and has amazing natural style. While I share none of these special traits, we do have complete alignment in all of the areas that are most important, in my opinion. We both put family first. We both value honesty, friendships, health and giving back. We both allow each other to be independent and pursue our induvial goals. We celebrate each other's victories and support each other with setbacks. I don't want to make this sound like marriage is a constant state of bliss. I drive her nuts often and since she follows me on Instagram, I will only say that one day she may do the same to me. :)

31. What’s a question you wish people would ask you (or something you wish people knew), but they don’t?

Would you like to come hang out with Bruce Springsteen?

32. How do you find a mentor at an established consulting or financial firm?

First look for mentees and start giving back. It doesn't matter how junior you are in life, there is always someone looking up to you in amazement with how you got to where you are. If you spend your time giving back, and are smart, ambitious, humble, trustworthy, consistent, persistent, and loyal, a good mentor will find you.

33. What impresses you about a person, and what do you think is the best indicator for future potential/success (in all areas of life)?

How a person treats somebody that they don't think is in a position to do something helpful for that person.

34. As a CEO, how do you inspire integrity among your employees?

The only way is to do your best to lead by example. People follow what they see, not what they are told. Who you promote within an organization and why, is an extension of this. How you deal (or don't) with people when they prove to be untrustworthy is another data point people will use to determine the firm's priorities and culture.

35. What makes you get out of bed every morning?

I never considered the option that I could sleep in. :)

36. Was Stanford GSB a pivotal point in your life? Why? And if you could go back to that point in time, would you do anything differently?

Yes because of the amazing quality of the people I met there. I am incredibly tight with MANY of my classmates and if I had to do it all over again, I would have pushed myself to bond tighter with even more of them. It was an amazing experience, and I would do it again in a second, if they would still accept me.

37. As an investment banking analyst, how do I explain what I do to non-finance people?

You do all the support work, whatever it takes, to support a team of professionals whose job is to help companies solve their most pressing issues, like how and when to raise money, how to restructure a division or the entire company if they are in trouble or who to acquire or sell themselves to for the benefit of their shareholders. Then you can say sometimes it is glamorous and you're in a meeting with a CEO and CFO of a big company and they are using your analysis to decide what to do and sometimes you are up all night making sure the logos of the companies are the right color, font and are centered on the page.

38. How do you deal with the stress and responsibility of handling impactful decisions?

I ask for as much help as possible from every person at our company who might have a perspective to help with the decision. I encourage as many people as possible to share their honest thoughts without any judgement on my part. Then I will work with my partner or a small group of the leaders most involved in the area, and we will come to the best decision. It is usually consensual and on rare occasion, made by only one or two people. Regardless, once the decision is made it is made and all that matters is what happens next. Usually, it is the right decision and things progress nicely. Sometimes it is the wrong decision, and we must pivot again and make a new decision. When this happens, it is important to not point fingers but learn from the mistake, so it is not repeated. That's it.

39. What does it mean to “be a good person”?

You know. Almost all of us know. It's easy to talk the talk, it's not so easy to consistently walk the walk. Are you accessible, especially to the people that you can do something for versus the ones that you want something from? Do you choose your words carefully when dealing with sensitive situations when people are insecure or vulnerable? Do people come to you for advice because they know they can trust you to keep it confidential and they know what they hear will be your best thoughts to help them without a personal agenda? Do you do the right thing when nobody is looking? Do you tell the truth when it is possible to shade it a little to make yourself look better? Do you give credit to others when due and take your fair share of accountability when mistakes happen? Are you so caught up in your own issues that you are blind to what is going on with others around you who may be in greater pain or need? Do you enjoy other's failures because they make you look better? Do you really understand what empathy is? Are you a good listener or is your mind just racing as soon as the other person starts talking so you can pounce immediately? None of us, including me are always a good person. We all have lapses and that is part of what is called, being human. The question is are you aware of the concept of being a "good person" and are you committed to always striving to be one. Notice I say "good,” not "great." Baby steps for now, at least for me.

40. Best piece(s) of advice you had received early in your career? Would you give this same piece of advice to someone presently (if not what would you change)?

The best piece of advice I ever got in business is when I finally wiggled my way onto the trading floor at Drexel to get a job interview as I was just graduating from Business School. A SUPER senior person told me the best thing I could do if I wanted a job on the trading floor was to go back to working in banking in M&A for 8 years and then re-apply. I thanked him profusely, and as he walked out of the room while I waited for the next person to interview me, I thought, "F that, I'm getting this job now." I did. Don't always listen to advice. Even mine. Sometimes you know better.

41. What is your best advice for delivering bad news, especially when the blame can be laid on you (i.e., financing failed, you need to file for chapter 11, headcount reductions are necessary, etc.)?

Bad news is always best delivered immediately, truthfully, and with compassion and understanding. Bad news always gets worse when you hide it or delay giving it. Immediate escalation, while never fun, always minimizes the extent of the problem. If possible, bad news accompanied by a reasonable action plan to minimize the pain is always appreciated. If you are to blame for the bad news, own it immediately. Never deflect or blame the innocent.

42. How have you developed and changed your relationship-building skills/strategies as you move up the corporate ladder?

I've learned over the years not to be intimidated by anyone as everyone is a real human being with dreams, fears, strengths, weaknesses, insecurities, and complications. The sooner you realize that everyone is just "making it up as they go" and we are all "imposters," the quicker you will be able to just focus on doing the work and presenting smart ideas with confidence to anyone, regardless of wealth, status, or fame.

43. What was the point in your career that brought you closest to defeat, and how did you move beyond it to get here?

We had a short attack on our firm in 2011 by a nefarious group of bandits who were working in cahoots with an incompetent at best, fraudulent at worst, small "rating agency." This happened at a dangerous time in the markets during the sovereign debt market implosion and the bankruptcy of MF Global. We had to aggressively defend ourselves against horrible lies and by virtue of transparency, integrity, and having the truth on our side, we turned the tide and got through it. Our success (where many others failed) was due to the quality and integrity of our team and our willingness to fight to the death to defend ourselves. It was our toughest moment, but one of our defining ones and we are better off as firm today because of it. I talk a little about it in my Instagram highlights under "Short Attack."

44. How would convince analysts to stay more than 2-3 years before moving to PE? It seems banks spend so much time and money hiring and training them just to lose a lot of good ones to PE.

I would pay someone a LOT of money to solve this problem for us. The most frustrating part is I believe it is hurting our leavers as much as it hurts us. It is incredibly difficult, but we are trying desperately to fix this. If any of our strategies were clearly working, I would share them. If any of you care to make suggestions, my "advice wanted” box is wide open. Send your ideas in. It's the least you can do for me answering 99 of your questions! :)

45. Hi Rich - I work in private equity and serve part time in the Army Reserve. I’m worried that this split commitment will inevitably lead to me falling behind peers. Any advice on how to achieve balance and still keep up with the pack?

As long as the people at work are supportive of you splitting your time, my bet is that the experience in the Army Reserve, while completely different from private equity, is incredibly valuable for personal growth and leadership skills. Over time you may need to transition to full-time, but I would have no issue sticking with it as long as you can. Discipline, commitment, dedication, and leadership are all traits that will only make you more valuable and special, no matter what else you do. I bet the management teams that you invest in will gravitate to you as well because of your unique experience and character. If you can juggle both for a while, bravo. And thank you for your service.

46.How do you set, keep yourself accountable to, and prioritize professional and personal goals?

Just thinking about things doesn't work. I find that writing things down makes them real. I have an affinity towards yellow legal pads and using a pen and making lists. Then I constantly review them and am drop dead honest with myself if I am making progress or not. I hold myself accountable. I do constantly tweak and re-evaluate. I also use this method when helping people make hard decisions. Simple lists of pros and cons can make the most complex of problem solve itself. Decision trees also help you get to where you need to go. It is all very basic and pure common sense. Although, many people tell me what seems like easy common sense to some, may look like Swahili to others. Ok boomer.

47. In business, what do you believe to be true which very few others agree with you on?

Life is not zero-sum, nor is business.

48. How can you tell if it's imposter syndrome or you're really not qualified?

You are really not qualified, and you are an imposter. But so am I. Get over it. Nobody cares. You can spend your entire life carrying this burden or you can choose to just get on with it and do your best. A lot of my close friends are complete imposters, and they agree. They are also billionaires.

49. Leaders often undertake bold projects with limited understanding of long-term risks (e.g. the Fed starting QE in 2010). What is your framework for analyzing experiments like this in your business?

There is no textbook, roadmap, or framework for analyzing 9/11, the near financial collapse of 2008-9, the sovereign debt crisis of 2011, Covid19 or the immediate massive quantitative easing to combat it, a major European war and the rapid onslaught of inflation and the reaction of the Fed to quickly and significantly raise rates. Since nobody can anticipate any of this (at least I can't), the better strategy is to be prudent in your leverage, liquidity buffers, and risk concentrations so you can be nimble in responding to whatever massive shock comes your way so you can consistently build your business slowly over the long term. If you do it this way, you can actually play offense when the world is most upside down and that is always when opportunities are most plentiful. Not easy to do.

50. What partner to look for if you plan to stay in finance.

If one of your considerations for a soulmate is to find the best one if you plan on staying in finance, you might want to consider staying single.

51. Does money buy happiness? What has been the most fulfilling milestone of your life?

Wealth brings flexibility and the privilege that the things you spend time on are your choice. I work really hard because I want to, not because I have to. That is an enormous luxury. I don't need to remind myself of this because my wife does that for me. It is wonderful to also have nice things and be able to take amazing vacations with your family. It is also a blessing to be in a position to be able to assist family and friends and give back to wonderful causes and people much less fortunate. That said, I know a lot of very wealthy people who are miserable and many people who just get by financially that are very happy. There are many forms of compensation besides money, and I respect them all. The most fulfilling milestones of my life thus far have been the births of my four amazing children. My wife and I both agree on that one, but it was a lot easier for me to enjoy.

52. What is something that has changed on the work floor (e.g. mentality, culture), when comparing the time you started out at First Boston in the 80s with the present, that you wish you could undo, and why?

It's easy for people to say they miss the "good old days." Most of the ones who say this were incapable of evolving as the world moved on. I can think of twenty things off the top of my head that are better in the industry today than when I was at First Boston and very little that makes me miss that old Wall Street era of arrogance, misogyny and "old boys club" bullying because of "who someone knows" versus "what they know." Very honest answer that may get me in trouble.

53. How do you when it’s time to move on?

For me, it will be when people tell me to move on and they have good reasons why. I don't serve at my pleasure; I serve at everyone else's pleasure.

54. It looks like a hard slog from VP to MD, with uncertain rewards. What’s your advice for someone who wants to grind it out rather than seek other pastures (buyside, corporate, tech)?

Every career requires a lot of time, dedication, and hard work...or in your words, a slog. There are no shortcuts (at least that I am aware of) to quick success. If you like what you do as a VP and are excited about the work that an SVP does and think it would be really great to become an MD and be responsible for the entire deal/relationship/strategy, stick with it. Even if you don't go all the way, each year you learn additional skills and get very valuable experience and grow. All of this can be helpful in other industries, so the time is not wasted if you don't go all the way. That said, if you hate the work and every day is a slog and you are uninspired even with the ultimate goal of having all of the responsibility and upside that comes with being an MD, look around. But look with your eyes wide open as you will most likely find some type of "slog" wherever you look. It's all about attitude. "Slog" is a bad word.

55. What decision of inaction do you most regret and what do you think caused you to not pursue the opportunity or alternative path?

I wanted to integrate our high yield group into Jefferies when I joined in 1990 and start helping to build the entire company right from the start (and get more equity). The partners I originally joined with were older and wealthier and some of them just wanted to make short-term money and then leave. They all wound up leaving fairly quickly and I stayed, but the damage was done internally as our group was viewed as elitist and eager to be separate from Jefferies. It took me 8 years to build back a baseline of trust, and that is when I became CEO. Then it took another 5 years to really become accepted as the firmwide CEO. For 15 years I was "the new guy." I wasted a lot of valuable time but learned a lot of lessons. I too was part of the original problem because I didn't stand up in a stronger way to my original partners. We have brought in countless other groups/teams since, and we are now great at integrating them immediately because we truly are one firm today. I am incredibly proud of this accomplishment, and this is also a reason why I am so excited about our future.

56. How do you ensure that you remain “present” when outside work with friends/family?

What was the question? Just kidding. The answer is you cannot "work" to be present, you really need to "want" to be present. You have to have the inner desire to know what is happening with your children, spouse, and friends. Faking it doesn't work. If you don't sincerely want it, you need to work on yourself and figure out why. Something is wrong and the problem lies with you, not your family, spouse, or friends.

57. What investments have you made (of time not money) that have led to the most personal happiness and career success?

Quality and quantity of time with my wife, children, and friends.

58. As a young visionary I sometimes wonder which sector/s I want to start a startup in. 1. What sectors/markets are you excited for and believe have great future viability? (I won’t take web3 and crypto for an answer) 2. What do you think is the best way to help as many people as possible in our lifetimes (I’m 19)?

First, I like the swagger but let other people call you a visionary. It sounds better when they say it. Second, the future is exciting everywhere including healthcare, entertainment, financial services, energy, consumer, and manufacturing. Technology touches all of these areas and as such, they all are ripe for opportunity. I would focus more on the one that interests you the most versus trying to pick which one will be hottest. As for concerning yourself now with how to help as many people as possible in your lifetime, instead I would focus on just helping one for now and see how it goes. You can start small, learn what it really means and requires, hone your skills, and then think and act bigger. By the way, you need to get yourself in a great spot because it's a lot easier to assist others when you are on stable footing yourself. Good luck and I do appreciate the intentions.

59. What is the most common misconception you see amongst your junior team members regarding the ascension to higher levels of leadership?

The thought that "face time," politics, playing the game, "who you know," etc... are the ways one advances. The reality is that if you are the one that your peers and clients trust and go to for help solving their problems, you will ascend. If you help make everyone around you better and share credit and accept the consequences of failure, you will ascend. If you are consistent, smart, always learning and growing as a person and as a technician, you will ascend. That's how it works, almost all the time. There can be exceptions, but those usually don't stick for long.

60. I’m 41, divorced, $50k in debt, minimal retirement savings, and renting an apartment. Levered to the t***. I need new work clothes, new furniture, and a new outlook on life. I’ve yet to find a solution to this problem.

Focus on what is positive in your life. You seem to have your health and you are able to work. Focus on really getting the job done at work or find a new job that will allow you to start building up some net worth. It will take time and you will have to dedicate yourself to really working hard. You need to cut down all unnecessary expenses asap. You don't need a new suit and you certainly don't need new furniture. You need to start paying down debt. You do need a new outlook but only you can stop the self-pity party and roll up your sleeves. You are still young and even with the economy stumbling, the job market is good. Get to it. Once your head is above water, do some real soul searching on how you got here and make sure you learn from your mistakes. And fix your vocabulary. "T***" doesn't reflect well coming from a 41-year-old dude.

61. How do you recommend negotiating the package for a new job when holding a large amount of unvested equity in the current job?

If the new job wants you badly, they will replace the unvested equity with a like amount of new equity, on a similar vesting schedule. If they are lukewarm on you, you will have to take a discount or perhaps lose it all. If they are lukewarm on you, you should ask yourself why you believe in this new opportunity so badly if they don't sufficiently believe in you.

62. What do you believe has been the key to your success in the financial industry?

Being able to identify great people, surround myself with them and keep them by treating them fairly and empowering them to be the best they can be.

63. At what point in your career should you know what you want to do with your career?

I'm still figuring it out.

64. Would you change jobs if your current workplace has no career progression but amazing mentors (for someone a few years out of college)?

A place with amazing mentors will help you figure out a career progression. If the amazing mentors say there is no career progression, then yes you should probably trust them. But before you do, ask why they stay themselves. Maybe they aren't such amazing mentors after all. Do the work.

65. How have you managed such longevity on Wall Street amidst the ups and the downs and how do you manage the ups and downs?

I never got arrogant or cocky when things were going well, and I never wanted to jump off a cliff when things were horrible. If you want to finish a long race, you need to be able to put things in perspective.

66. There is a lot of focus amongst new graduates on creating “optionality” in your career. To what extent do you believe in that approach versus finding a narrow focus and excelling in that area.

I prefer to focus on learning all I can, building as many internal and external relationships as possible, creating a personal brand that people respect, value, and trust. If you do all that, the optionality will take care of itself. If you just focus on optionality as your main goal, your options will have very short expirations. See what I just did there. :)

67. Have you ever had any friends who, as senior professionals at a bank, have no retirement savings or net worth because they were supporting their parents since they began their career? I don’t really care for my future as much as I do theirs - is there a better way to do this though?

You cannot help anyone if you are not on firm footing yourself. There is a fine line between showing love and support, and disabling people from being able to function themselves. It can start with the very best of intentions, but it will eventually get to a very dark place. No future spouse will put up with this. It can happen with friends, children, parents, or other relatives. When you overly support people, you also rob them of their independence and self-esteem. You won't be able to sustain this support and be OK yourself so eventually something has to give. You (and they) may need therapy to figure out why this is happening. More immediately, you have to taper this off in a manner that allows them to transition but is firm and absolute. Of course, I'm assuming by the way you asked the question that your parents aren't incapable of work. If that is the case, it is quite a bit more complicated. Time to have some tough conversations that need to be followed up with concrete actions. Good luck.

68. What have been some of the most interesting things to come out of conversations with other banking CEOs?

I don't know of any clubhouse where all the other banking CEO's hang out. If there is one, I'm not invited. That's OK with me and no offense to them, but I would rather be with our people, our clients, my family, and my friends. I'm sure they feel the same about me.

69. Everyone told me to study computer programming because the demand for jobs would be endless. I was recruiting at Meta and now there is a hiring freeze and tech stocks are down across the board. How can someone with tech skills apply themselves in the current market / what are the growing sectors right now that I should consider getting into? Thanks so much.

Don't blame your choice of studies on what others told you. You are in charge of your own decisions and while you can listen to others for advice, you are the one who makes the final decision, so own it. There is plenty of demand for good computer programmers away from Meta and if you are going to look at tech stock prices and decide it is hopeless, why should anyone take a chance on you if you don't believe in yourself? Now you are asking me what sectors you should consider instead of doing the work yourself? If you don't see the pattern here, I don't think you will be a very good computer programmer. Sounds like you are setting up to blame me for your next misstep in 3 years. My advice is to go to the bathroom, splash some cold water on your face and start doing a bottom-up analysis of companies, industries and opportunities and decide what interests you. Start networking and speaking to people with real jobs and find out what appeals to you and what doesn't. Then if you need supplemental skills besides computer programming, go figure out how to smartly acquire them. You have a long life ahead of you. Put both hands on the steering wheel and take accountability for where you are going. Good luck!

70. For those who aspire to be leaders one day, what are some brutal or unspoken truths that many people don’t know about?

Everyone in any organization has one best friend that they trust implicitly. That is why there are no kept secrets, ever. The sooner you realize this the better. This way you will only say or do things that you are ok with the world knowing. Then you can be an open, honest, and transparent leader, which is the only way to successfully lead for any extended period.

71. What’s the greatest lesson you’ve learned from a personal failure?

No matter what, somehow the sun seems to always seems to rise the next day.

72. What was the most important job you had before becoming CEO?

Being a father. It's also the most important one after I became a CEO.

73. What led to your decision to leave your firm/employer and to go create value as an entrepreneur/businessman?

Chapter 11.

74. Before winning business (mandate, LP commitment, sourcing investment, etc.), how do you win people’s hearts to become their trusted counterparty/advisor/GP? More importantly, how do you keep their trust and become their “first call” when they need you?

When people and businesses are doing great, it's all but impossible to wiggle into becoming someone's trusted advisor (without doing something very stupid with your capital) because every prior banking relationship is fawning all over the client and there is little room for someone new. However, when someone is in a pickle and the chips are down, the window is wide open to develop a new relationship. This is when most other "advisors" head for the hills as they believe the client made a mistake or misjudged the market and is no longer an enviable, prestigious, or viable client. This is when for most "fair weather" bankers it just requires too much work to "right side" the client and the payoff doesn't seem anywhere in the near horizon. If you roll up your sleeves and truly help the client figure out of their problems and give them honest, intelligent, and non-judgmental advice and then help them execute their way out of the mess, you will have a trusted partner for life. You will then be the first call and stay there unless you take it for granted. Many of my closest clients (who are now friends) started with me this way. People don't forget who helped them when they were down and the others who they thought they could count on but were nowhere to be seen. Aside from distinguishing yourself in this manner, the other rule is to always be honest with the client and tell them what you really believe. You have to care about what helps them, and not you. Sometimes telling a client NOT to do the deal is the right thing. Sometimes telling the client that you are NOT the best to help them in a certain situation is the right thing. Trust must be earned, and it is very fragile. People know if they can trust you and if they can, you are invincible. Never take it for granted or abuse it.

75. How do we better retain and promote women in investment banking? Coming from someone who has worked in the industry since 2006, I kind of want to give up and throw up my hands and say: maybe we should just call it what it is; this is a man’s job. And since no one is willing to change the job to retain experienced women, it will always be a man’s job. Only one of my female friends have made it to MD. Nothing has changed in the last 15 years… am I wrong? Or maybe we don’t care about retaining women? Would love to hear from Rich. Sorry not succinct at all.

This is a really difficult issue. The playing field has been unfair for women and underrepresented minorities for a very long time. That said, the world has finally changed, and progress is definitely being made, but never fast enough.

At the junior levels it is the easiest for firms like Jefferies as we have been consistently educating college students as young as freshmen and sophomores about career opportunities in finance. At Jefferies, we are finally at a 50/50 ratio at the junior level. The next level of attack is retention, which we are keenly focused on as well.

At the most senior level of the Board, the number of seats is relatively small, so a targeted approach aimed at the most qualified candidates has helped us achieve excellent diversity at that level. The middle of the investment bank will take care of itself as the juniors progress, but it will take time.

We have a program called Rising Stars that identifies our most talented future female leaders, and we offer unique training and mentoring programs for them to participate in. We also initiated a program where we pay for women to freeze their eggs so that they can have more flexibility and peace of mind when it comes to fertility. It is at the more senior operating level where Jefferies (and virtually all of our competitors) are extremely lacking and it is glaringly apparent. There are several specific things we are doing to address this, but none represent a quick solution.

Our Jefferies Women's Initiative has done an excellent job promoting awareness and action plans globally around the firm. The two people who chair our MD promotion process happen to be women. Not because they are women, but because they happen to be the most qualified to chair this important process. One of the few benefits of Covid is the ability to have more flexibility by having a hybrid approach when necessary for people to spend some time working from home. This helps women and men who want to spend more time with their families, and people who may be primary care givers for infirm members of their family.

There is a very limited supply of experienced women in our industry because they were excluded for so long. That's why we have targeted programs that work to find women who have left the finance industry to raise families and we seek these people out to determine if they would be a fit with us in a certain area when they decide it is time to return to the workforce.

We have made this issue one that is the responsibility for everyone at Jefferies to help fix. We are not anywhere close to getting this right, but we are making progress and are committed to it. We care about it because we care about having the very best talent at our firm, and when you rule out half the population (or worse when you include underrepresented minorities), there is no way you can have the best people or the best diversity of ideas and perspectives.

You were not succinct in your question, nor am I with the answer. That is because this is a very tough thing to change, but we will not stop trying and we are committed to getting to the right place. Don't give up on the industry. Help us solve it.

76. Do you think being an optimistic person increases your life earnings?

I'm an optimist so how do you think I'm going to answer this question? :)

77. I’m a VP, single male, 30 year old. Trying to figure out if / how long I want to stay in banking and/or what is next. Rich, can I get your advice?

Advice is only as good as the inputs that are given. I would not listen to anyone who answered this question for you based on the information you provided in asking it. My advice based on this is for you to take ownership of your career, do the work, be proactive, ask the right question the right way, and then you can decide for yourself. If you are acting like this, you will just flop around directionless. Hopefully this is just a bad example and not how you are really managing your career. If not, maybe this is a wakeup call. Good luck. R

78. When is it too late to take a big risk or what do you wish you would have done differently at 33 years old?

At 33, I was running a team of 60 people in high yield sales, trading and research and helping to begin building our investment bank from scratch. That was pretty darn risky. Every day I do something that involves risk and that is one of the exciting and challenging parts of my job. It is natural to take fewer big risks as you get older. You are more mature, have a lot of responsibility for others and have more to lose. That said, I don't know anyone senior who is highly successful who doesn't take calculated risks consistently. What is unique about the smart ones is that the gamble is never made with all their chips, and it is never done blindly or dependent on a lucky outcome.

79. Have your executive experiences led you to prefer flat power structures, or traditionally hierarchical C-suites?

Jefferies is incredibly flat, and I believe that is one of our secrets of success. Every one of us are in the trenches working on trades, pitching for new business, raising capital for our clients, solving problems, and serving in partnership with our team. Leaders at Jefferies don't ask anyone to do anything they wouldn't do themselves. There is an open-door policy regardless of tenure or title and we want everyone to be empowered to help us get the job done. Every one of our managers leads by example. It's a lot of work but it creates a vibrant culture and the best results for our clients. Don't get me wrong, we have lots of problems and issues all the time, but we roll up our sleeves and address them real time.

80. What advice would you give to managers and bosses who want to sustainably create an inspiring atmosphere in their companies where employees push themselves to give their best effort while also feeling satisfied, upbeat and motivated?

Lead by example.

81. How do you deal with s*** talkers that make up lies about you that spread it to every area of the business to the point you have ppl calling you to tell you what they heard about you.

Ignoring them and being happy and successful is the best way to inflict torture on haters.

82. I’ve read a lot about incentive structures and how they are integral in both business and life. Can you tell me about your experience with incentive structures/ strategies in the past and how you have optimized these over time?

In the early days, Jefferies was a pure commission shop and that created an incredible entrepreneurial culture and a highly motivated salesforce that sprinted to the office at 4 am in LA. It also was incredibly limiting as the world got more complicated and clients demanded teamwork and multiple products and services, the commission structure was slow and painfully transitioned into a smarter system that rewarded employees based on their performance, their departments' results, and how the firm did. This created the foundation for us to truly get to the next level of service and collaboration, which our clients demanded.

In the early days we paid people partially in stock as we felt that being an owner would promote good behavior. We found that good people do good things even if they don't own stock and bad people do bad things even when they do own stock. We also realized that we were paying people in the currency they valued the least, but it was also the most expensive form of compensation from a shareholder's perspective.

When Bear and Lehman had their issues and people had their jobs and life savings all tied up in the same basket, it was too much for people to process and we decided to change the moment we could to an all-cash compensation system. This is what we did post our merger with Leucadia in 2012. We gave people the right to choose shares, but nobody had it forced upon them. We did have the same vesting schedules, especially for high earners so they would lose some of the cash if they chose to compete with Jefferies, just like they would have lost their unvested shares in the prior system. We think we have the right balance now. This is our current plan, and it works very well for us. Our turnover is incredibly low, and our people have created enormous wealth for themselves (and sleep at night), and our shareholders have minimized dilution. No compensation plan is perfect, but ours works.

83. If I'm an Analyst at your company, how will you as CEO hear my voice?

Email me, DM me, call me or walk into my office on the trading floor. Or respond quickly to one of my random DM's and I will take you to Mr. Chows.

84. Best way to thank your parents / those who helped you achieve everything you have?

All any parent ever wants for thanks from their kids is for them to be happy, healthy, ambitious, fulfilled, appreciated, joyful, challenged, constantly learning, evolving, and to find their right life partner. Then if you want to give Mom and Dad the cherry on top, live nearby, visit, and have happy and healthy kids of your own.

85. What is the most expensive lesson you've learned in your career?

There is no such thing as a slight liquidity crisis.

86. Peter Thiel says bankers make money rearranging capital structures, not building the future—why should I become a banker?

If it wasn't for some good bankers, Peter Theil would not have changed the world and people would just be saying he's a big talker.

87. What would you tell your 22-year-old self if you could go back in time?

You're going to be one lucky dude.

88. Hey Rich, simple question here. When you were just starting out in the workforce, what kept you motivated to grow and further your career?

Paying off the debt from my MBA and being able to afford a place to live.

89. Keys for transition from a “producer” (trader, sales, banker, etc.) to management role?

If you think like an owner or a manager right from the start when you are primarily a line producer, the transition will be a lot easier. That means you have to produce with integrity, purpose, ingenuity, and teamwork. You have to share credit when deserved and think long term about what is best for the client and the firm, and not just for yourself.

90. If you were going back to Stanford GSB for your MBA in 2023, what would you focus on knowing what you know about your experience and the current world we live in?

I wouldn't get in today.

91. How did you meet Mrs. Handler?

36 years ago, I walked into a bar in Mexico (Carlos & Charlies) during Spring Break at Stanford and saw her sitting at a table with other people. I uninvitingly pulled up a chair next to her.

92. What method(s) did you find the most effective to manage your boss(es) before becoming CEO?

I never "managed" anyone. For better or worse, I always gave my honest and unfiltered opinion on what I believed was right at the time. When I did well, I assumed people saw it and when I screwed up, I took ownership for it. If someone else did a great job, I never took credit for it. If my boss was doing something stupid, I would politely say why I disagreed and present what I considered a better alternative. My boss made the call after my suggestions, and I followed instructions well. If you think you can "manage" someone you work for, you are only fooling yourself and upsetting your peers around you. Life is too short. Be direct, straightforward, and real.

93. What is the secret for handling reputational crisis?

Going into the crises with your personal reputation intact is critical because people will give you the benefit of the doubt. Then just being as honest and transparent as possible and if there is in fact an issue, dealing with it properly and promptly. Open communication is critical. Sometimes independent verification is required and that must be handled in a pristine manner beyond reproach. These are always tough times but in the real world, they do happen. When you get to the other side securely, the organization emerges stronger if handled properly. I don't wish these times on my worst enemy.

94. What is the best way for Juniors to take initiative and stand out beyond doing good work?

Stop wondering about taking initiative or talking about it and just start doing it.

95. Venezuelan immigrant who was able to break into JPM at 24yo. First of his family with an opportunity to build and compound wealth from scratch. How would you play your opportunities in a country like the US?

I would follow your own instincts, because they got you incredibly far in a very short period of time. The fact that you accomplished all of this on your own is beyond impressive. Keep learning and growing and who knows, maybe you will run that fine bank one day. When I need advice, I may call you if you don't mind.

96. In investment committee meetings, any advice on how to deal with the most pessimistic and negative person in the executive team? This executive always objects in everything and it is tough to win him/her over even with presenting all the deal facts and scenarios.

That person is the most valuable person in the committee. Don't try to game that person or "win them over." Embrace their concerns like you are investing your very last dollar personally in the situation and have smart answers to the questions. If you don't, then maybe you should be speaking up that the investment isn't worthy. It's not about "selling," it's about getting to the right answer.

97. It may seem somewhat arbitrary but if you could implement one fundamental change into the global financial system, what would it be and why? Is this change theoretically possible? What would the practical steps be to instigate it?

My answer is either sheer brilliance or the stupidest thing I've ever said. I think it would revolutionize the global financial system if blockchain could be utilized to safely and instantaneously settle all trades directly between counterparties. This would eliminate one of the biggest systemic risks in the in finance, counterparty risk. The friction cost savings would be an added benefit and as I type this overly simplistic and possibly ridiculous answer without a clue of the technological possibilities or implications, it seems to make sense to me.

98. If I have the money to start a hedge fund but no experience can I be successful? If so how do I hire the right people?

No, but you will be able to select an awesome new name for a company, overpay for some office space, impress some friends for a while, feel really cool when you go out at night, hire some people who shouldn't be allowed to make any investment decisions, lose all your (or your parents) money, and then go get a job to gain experience.

99. Fundamentals + Confidence = Unlimited Potential? That’s my motto to succeed at anything.

Interesting. My motto is: "Be a good person and don't listen to mottos that oversimplify things."

100. What is the best place to grow these days?

Personally, I would prefer some more hair on the top of my head.

If you want more Rich Handler content, give him a follow on Twitter and Instagram. That's all for today, Exec Sum will be back to its normal schedule tomorrow 🤝

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