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What changed in Lazard, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Lazard, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+405 added−406 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-23)

Top changes in Lazard, Inc.'s 2023 10-K

405 paragraphs added · 406 removed · 332 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

62 edited+9 added−15 removed71 unchanged
Biggest changeShe became the Global Chief Operating Officer of Financial Advisory in July 2018 and has served as a Managing Director of Lazard since January 2001. Ms. Soto was previously Chief Operating Officer of Lazard Europe Financial Advisory from January 2006 to July 2018, and Chief Operating Officer of Lazard Paris Financial Advisory from October 2009 to August 2013.
Biggest changeShe previously served as Group Executive, Human Capital and Workplace Innovation, of Lazard, Inc. and Lazard Group in June 2019. She became the Global Chief Operating Officer of Financial Advisory in July 2018 and has served as a Managing Director of Lazard since January 2001. Ms.
We seek to hire talented and motivated individuals and prioritize their continued education and training. The Company works to support the success and growth of its employees through a collaborative and dynamic 360-degree performance management and review cycle. Furthermore, through investments in technology, we have enhanced knowledge management and collaboration tools across our businesses. Inclusion, Diversity, Equity and Allyship.
We seek to hire talented and motivated individuals and prioritize their continued education and training. The Company works to support the success and growth of its employees through a collaborative and dynamic 360-degree performance management and review cycle. Furthermore, through investments in technology, we have enhanced knowledge management and collaboration tools across our businesses. Inclusion, Diversity, Equity and Allyship (“IDEA”).
In February 2018, our Board of Directors formally established its Workplace and Culture Committee to assist and advise management on cultivating and reinforcing a workplace culture that helps attract, motivate and retain talented people; fosters productivity, professional and personal development; values diversity, equity and inclusion; and encourages its people to engage with each other and their communities.
In February 2018, our Board of Directors formally established its Workplace and Culture Committee to assist and advise management on cultivating and 8 reinforcing a workplace culture that helps attract, motivate and retain talented people; fosters productivity, professional and personal development; values diversity, equity and inclusion; and encourages its people to engage with each other and their communities.
Foreign Corrupt Practices Act, for example, generally prohibits offering, promising or giving, or authorizing others to give, anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise gain an unfair business advantage, such as to obtain or retain business.
Foreign Corrupt Practices Act, for example, generally prohibits offering, promising or giving, or authorizing others to give, anything of value, either directly or indirectly, to a 11 non-U.S. government official in order to influence official action or otherwise gain an unfair business advantage, such as to obtain or retain business.
When we advise clients that are contemplating the sale of certain businesses, assets or an entire company, our services include advising on the sale process, providing valuation analyses, assisting in preparing an information memorandum or other appropriate sale materials and rendering, if appropriate, fairness opinions.
When we advise clients that are contemplating the sale of businesses, assets or an entire company, our services include advising on the sale process, providing valuation analyses, assisting in preparing an information memorandum or other appropriate sale materials and rendering, if appropriate, fairness opinions.
In 2013, the Company and the ACPR 11 agreed on terms for the consolidated supervision of LFB and certain other non-Financial Advisory European subsidiaries of the Company (referred to herein, on a combined basis, as the “combined European regulated group”) under such rules.
In 2013, the Company and the ACPR agreed on terms for the consolidated supervision of LFB and certain other non-Financial Advisory European subsidiaries of the Company (referred to herein, on a combined basis, as the “combined European regulated group”) under such rules.
Also posted on our website, and available in print upon request of any Lazard Ltd shareholder to the Investor Relations Department, are charters for the Company’s Audit Committee, Compensation Committee, Nominating & Governance Committee and Workplace and Culture Committee.
Also posted on our website, and available in print upon request of any Lazard shareholder to the Investor Relations Department, are charters for the Company’s Audit Committee, Compensation Committee, Nominating & Governance Committee and Workplace and Culture Committee.
Copies of our Corporate Governance Guidelines and Code of Business Conduct and Ethics governing our directors, officers and employees are also posted on the investor relations section of our website in the corporate governance subsection.
Copies of our Corporate Governance Guidelines and Code of Business Conduct and Ethics governing our directors, officers and employees are also posted on the investor relations section of our website in the corporate governance subsection. 15
Marketing, sales and client service efforts are organized through a global market delivery and service network, with distribution professionals located in cities including New York, Amsterdam, Bordeaux, Boston, Brussels, Chicago, Dubai, Frankfurt, Geneva, Hamburg, Hong Kong, London, Luxembourg, Lyon, Madrid, Melbourne, Milan, Montreal, Nantes, Paris, San Francisco, Seoul, Singapore, Sydney, Tokyo, Toronto and Zurich.
Marketing, sales and client service efforts are organized through a global market delivery and service network, with distribution professionals located in cities including New York, Amsterdam, Bordeaux, Boston, Brussels, Chicago, Dubai, Frankfurt, Geneva, Hamburg, Hong Kong, London, Luxembourg, Lyon, Madrid, Melbourne, Milan, Montreal, Nantes, Paris, Riyadh, San Francisco, Seoul, Singapore, Sydney, Tokyo, Toronto, Vienna and Zurich.
While we believe our independent advisory perspective and global footprint offers a uniquely competitive position, many of our competitors are large, consolidated financial institutions that have the ability to offer a wider range of products, including loans, insurance, foreign exchange, hedging, research, brokerage and underwriting services, which may enhance their competitive position.
While we believe our independent advisory perspective and global footprint offer a uniquely competitive position, many of our competitors are large, consolidated financial institutions that have the ability to offer a wider range of 9 products, including loans, insurance, foreign exchange, hedging, research, brokerage and underwriting services, which may enhance their competitive position.
The Company has several areas of focus to support these objectives: Attracting and Retaining Talent. We offer competitive compensation packages to recruit and retain exceptional talent. We offer a variety of employee benefits, including comprehensive health insurance coverage, flexible retirement and health care savings account plans as well as family planning and support services.
The Company has several areas of focus to support these objectives: Attracting and Retaining Talent. We offer competitive compensation packages to recruit and retain exceptional talent. We offer a variety of employee benefits, including comprehensive health insurance coverage, flexible retirement and healthcare savings account plans as well as family planning and support services.
Competition The financial services industry, and all of the businesses in which we compete, are intensely competitive, and we expect them to remain so. Our competitors are other investment banking and financial advisory firms, broker-dealers, commercial and “universal” banks, insurance companies, investment management firms, hedge fund management firms, alternative investment firms, private banks and other financial institutions.
Competition The financial services industry, and all of the businesses in which we compete, are intensely competitive, and we expect them to remain so. Our competitors are other investment banking and financial advisory firms, broker-dealers, commercial and “universal” banks, insurance companies, traditional asset management firms, hedge fund management firms, alternative investment firms, private banks and other financial institutions.
Our goal in our Asset Management business is to produce 4 superior risk-adjusted investment returns and provide customized investment solutions for our clients through the active management of their portfolios. Our investment teams construct and manage portfolios using various techniques and investment philosophies, including traditional fundamental research and analysis and quantitative tools.
Our goal in our Asset Management business is to produce superior risk-adjusted investment returns and provide customized investment solutions for our clients through the active management of their assets. Our investment teams construct and manage portfolios using various techniques and investment philosophies, including traditional fundamental research and analysis and quantitative tools.
Our Asset Management business maintains offices in New York, Amsterdam, Bordeaux, Boston, Brussels, Chicago, Dubai, Dublin, Frankfurt, Geneva, Hamburg, Hong Kong, London, Luxembourg, Lyon, Madrid, Melbourne, Milan, Montreal, Nantes, Paris, San Francisco, Seoul, Singapore, Sydney, Tokyo, Toronto and Zurich.
Our Asset Management business maintains offices in New York, Amsterdam, Bordeaux, Boston, Brussels, Chicago, Dubai, Dublin, Frankfurt, Geneva, Hamburg, Hong Kong, London, Luxembourg, Lyon, Madrid, Melbourne, Milan, Montreal, Nantes, Paris, Riyadh, San Francisco, Seoul, Singapore, Sydney, Tokyo, Toronto, Vienna and Zurich.
With respect to companies in financial distress, we provide services to the company, creditors or other interested parties, which services may include reviewing and analyzing the business, operations, properties, financial condition and prospects of the company, evaluating debt capacity, assisting in the determination of an appropriate capital structure, assisting in structuring and effecting the financial aspects of exchange offers, evaluating financial and strategic alternatives and assisting and participating in negotiations with affected entities or groups.
With respect to companies in financial distress, we provide services to the company, creditors or other interested parties, which may include reviewing and analyzing the business, operations, properties, financial condition and prospects of the company, evaluating debt capacity, assisting in the determination of an appropriate capital structure, assisting in structuring and effecting the financial aspects of amendments to debt documents or exchange offers or refinancings, evaluating financial and strategic alternatives and assisting and participating in negotiations with affected entities or groups.
Japan Long/Short Global Emerging Income Emerging Debt 7 In addition to the primary investment strategies listed above, we also provide other asset management services to our clients, including asset allocation and other investment advisory services, as well as locally customized investment solutions. In many cases, we also offer both diversified and more concentrated versions of our products.
Japan Long/Short Equity Global Emerging Debt Total Return Emerging Income 7 In addition to the primary investment strategies listed above, we also provide other asset management services to our clients, including asset allocation and other investment advisory services, as well as locally customized investment solutions. In many cases, we also offer both diversified and more concentrated versions of our products.
They also may have the ability to support clients with other financial services in an effort to gain market share, which could result in pricing pressure in our business or loss of opportunities for us. At the same time, demand for independent financial advice has created opportunities for new entrants, including a number of boutique financial advisory firms.
They also may have the ability to support clients with other financial services in an effort to gain market share, which could result in pricing pressure in our business or loss of opportunities for us. At the same time, demand for independent financial advice has created opportunities for a number of boutique financial advisory firms.
For the year ended December 31, 2022, the ten largest fee paying clients constituted approximately 19% of our Financial Advisory segment net revenue, with no client individually contributing more than 10% of segment net revenue.
For the year ended December 31, 2023, the ten largest fee paying clients constituted approximately 19% of our Financial Advisory segment net revenue, with no client individually contributing more than 10% of segment net revenue.
Approximately 85% of our AUM as of December 31, 2022 was managed on behalf of institutional clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors, and approximately 15% of our AUM was managed on behalf of individual client relationships, which are principally with family offices and high-net worth individuals.
Approximately 85% of our AUM as of December 31, 2023 was managed on behalf of institutional and intermediary clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, 4 mutual fund sponsors, broker-dealers and registered advisors, and approximately 15% of our AUM was managed on behalf of individual client relationships, which are principally with family offices and high-net worth individuals.
Financial Advisory Our Financial Advisory business offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, restructuring and capital solutions, sovereign advisory, geopolitical advisory, capital raising and placement, and other strategic advisory matters.
Financial Advisory Our Financial Advisory business offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, restructuring and liability management, sovereign advisory, geopolitical advisory and other strategic advisory matters and capital raising and placement.
We compete based on the quality and breadth of our products and innovative solutions we offer, which is derived from our objectivity, differentiated insights and fundamental research orientation.
We compete based on the quality and breadth of our products and innovative solutions we offer, which are derived from our objectivity, differentiated insights and fundamental research orientation.
We offer the following product platform of investment strategies: Global Multi-Regional Local Emerging Markets Equity Global Large Capitalization Small Capitalization Thematic Listed Infrastructure Quantitative Multi-Asset Managed Volatility Real Assets Sustainable Global Ex Global Ex-U.K. Global Ex-Japan Global Ex-Australia Global Ex-U.S.
We offer the following product platform of investment strategies: Global Multi-Regional Local Emerging Markets Equity Global Large Capitalization Small Capitalization Thematic Listed Infrastructure Quantitative Multi-Asset Managed Volatility Real Assets Sustainable Sustainable Agriculture Global Ex Global Ex-Australia Global Ex-U.S.
See Item 1A, “Risk Factors—Other Business Risks—Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses.” 12 Executive Officers of the Registrant Set forth below are the name, age, present title, principal occupation and certain biographical information for each of our executive officers as of February 14, 2023, all of whom have been appointed by, and serve at the discretion of, our board of directors.
See Item 1A, “Risk Factors—Other Business Risks—Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses”. 12 Executive Officers of the Registrant Set forth below are the name, age, present title, principal occupation and certain biographical information for each of our executive officers as of February 13, 2024, all of whom have been appointed by, and serve at the discretion of, our board of directors.
In addition to the investments made as part of this strategy, we believe that our Financial Advisory business may benefit from external market factors, including: • demand for independent, sophisticated financial advice; • recapitalization and related activities in developed and emerging markets; • high corporate cash balances; • attractive equity valuations, favorable credit conditions and generally positive market sentiment; • favorable levels of cross-border M&A and large capitalization M&A, two of our areas of historical specialization; • strategic market and industry catalysts, including energy transition, technology disruption, and infrastructure investment; and • possible M&A activity that may result from tax, regulatory and similar reform.
In addition to the investments made as part of this strategy, we believe that our Financial Advisory business may benefit from external market factors, including: • demand for independent, sophisticated financial advice; • recapitalization and related activities in developed and emerging markets; • high corporate cash balances; • attractive equity valuations, stable credit conditions and generally positive market sentiment; • favorable levels of cross-border M&A and large capitalization M&A, two of our areas of historical specialization; • strategic market and industry catalysts, including energy transition, technology disruption, life sciences evolution and infrastructure investment; and • favorable tax, regulatory and similar reform.
Generally, our employees are not subject to collective bargaining agreements, exce pt that our employees in some offices, including France and Italy, are covered by national, industry-wide collective bargaining agreements. We believe that we have good relations with our employees.
Generally, our employees are not subject to collective bargaining agreements, except that our employees in some offices, including France and Italy, are covered by national, industry-wide collective bargaining agreements. We believe that we have good relations with our employees.
The charts below illustrate the mix of our AUM as of December 31, 2022, measured by broad product strategy and by office location.
The charts below illustrate the mix of our AUM as of December 31, 2023, measured by broad product strategy and by office location.
We believe that we have been pioneers in offering financial advisory services on an international basis, with the establishment of our New York, Paris and London offices dating back to the nineteenth century.
We believe that we have been pioneers in offering international Financial Advisory services, with the establishment of our New York, Paris and London offices dating back to the nineteenth century.
Many of our managing directors and senior employees come from diverse backgrounds, such as senior leadership positions in corporations, government, law and strategic consulting, which we believe enhances our ability to offer sophisticated advice and customized solutions to our clients. As of December 31, 2022, our Financial Advisory segment had 212 managing directors and 1,463 other professionals and support staff.
Many of our managing directors and senior employees come from diverse backgrounds, such as senior leadership positions in corporations, government, law and strategic consulting, which we believe enhances our ability to offer sophisticated advice and customized solutions to our clients. As of December 31, 2023, our Financial Advisory segment had 210 managing directors and 1,393 other professionals and support staff.
At the same time, we lose clients each year as a result of the sale or merger of a client, a change in a client’s senior management, competition from other investment banks and other causes. We earned $1 million or more from 304 clients for the year ended December 31, 2022.
At the same time, we lose clients each year as a result of the sale, merger or restructuring of a client, a change in a client’s senior management, competition from other investment banks and other causes. 1 We earned $1 million or more from 299 clients for the year ended December 31, 2023.
Core/Core Plus High Yield Short Duration Municipals Cash Management Convertibles Non-U.S. U.K. Global Emerging Debt Emerging Corporate Alternative Global Arbitrage/Relative Value Commodities Sustainable Private Infrastructure European Long/Short Equity U.S. Quantitative Long/Short Equity Long/Short Credit Non-U.S.
Core/Core Plus High Yield Short Duration Municipals Cash Management Convertibles Global Emerging Debt- Core/Local/Blend/Corporate Alternative Global Arbitrage/Relative Value Commodities Sustainable Private Infrastructure European Long/Short Equity U.S. Quantitative Long/Short Equity Non-U.S.
We also have become a leading firm in managing mutual funds, sub-advisory funds and separately managed accounts for many of the world’s largest broker-dealers, insurance companies, registered advisors and other financial intermediaries.
We are a leading firm in managing mutual funds, sub-advisory funds and separately managed accounts for many of the world’s largest broker-dealers, insurance companies, registered advisors and other financial intermediaries.
Over the past several years, in an effort to improve our Asset Management business’ operations and expand our Asset Management business, we have: • focused on enhancing our investment performance; • improved our investment management platform by adding a number of senior investment professionals, including portfolio managers and analysts; • continued to strengthen our marketing and consultant relations capabilities, including by optimizing our distribution capabilities across client channels in North America; • expanded our product platform, including through the addition of long/short equity strategies, sustainable strategies, quantitative equity strategies, long/short credit capabilities and thematically oriented strategies; • invested in our technology infrastructure and data science capabilities to enhance our business; and • continued to expand the geographic reach of our Asset Management business.
Over the past several years, in an effort to improve our Asset Management business’ operations and expand our Asset Management business, we have: • focused on enhancing our investment performance; • improved our investment management platform by adding a number of senior investment professionals, including portfolio managers and analysts; • continued to strengthen our marketing and consultant relations capabilities, including by optimizing our distribution globally; • expanded our product platform, including through the addition of long/short equity strategies, sustainable strategies, quantitative equity strategies and thematically oriented strategies; • invested in our technology infrastructure and data science capabilities to enhance our business; and • continued to expand our geographic reach where opportunities arise.
Quantitative France France (Large Capitalization) France (Small Capitalization) Asia Pacific Australia Japan Global Large Capitalization Small Capitalization Frontier Equities Quantitative Multi-Asset Managed Volatility Sustainable Middle East North Africa Middle East North Africa Fixed Income and Cash Management Global Core/Core Plus High Yield Short Duration Convertibles Pan-European Core High Yield Cash Management Duration Overlay Convertibles Eurozone Fixed Income Cash Management Corporate Bonds Scandinavian Short Duration U.S.
(Large Capitalization) France Large Capitalization Small Capitalization Asia Pacific Australia Japan Global Large Capitalization Small Capitalization Quantitative Multi-Asset Managed Volatility Middle East North Africa Middle East North Africa Fixed Income and Cash Management Global Core/Core Plus Total Return Short Duration Convertibles Pan-European Core High Yield Cash Management Duration Overlay Convertibles Total Return Eurozone Core/Core Plus Cash Management Corporate Bonds Nordic Scandinavian Short Duration High Yield U.S.
Industries Served We seek to offer our services across most major industry groups, including, in many cases, sub-industry specialties.
Industries Served and Practice Areas We seek to offer our services across most major industry groups, including, in many cases, sub-industry specialties.
Strategy Our focus in our Financial Advisory business is on: • investing in our intellectual capital through senior professionals who we believe have strong client relationships and industry expertise; • increasing our contacts with existing clients to further enhance our long-term relationships and our efforts in developing new client relationships; • developing new client relationships; • expanding the breadth and depth of our industry expertise and selectively adding or reinforcing practice areas, such as our Capital Markets Advisory, Shareholder Advisory, Sovereign Advisory and Geopolitical Advisory groups; • coordinating our industry specialty activities on a global basis and increasing the integration of our industry experts in M&A with our other professionals; • selectively bolstering our existing presence in certain local markets; • broadening our geographic presence by adding new offices where opportunities arise; • investing in our technology infrastructure and data science capabilities to enhance our business; and • deploying our intellectual capital, strong client relationships and other assets to generate new revenue streams.
We endeavor to coordinate the activities of the professionals in these areas with our M&A industry specialists in order to offer clients customized teams of cross-functional expertise spanning both industry and practice area expertise. 3 Strategy Our focus in our Financial Advisory business is on: • investing in our intellectual capital through senior professionals who we believe have strong client relationships and industry expertise; • increasing our contacts with existing clients to further enhance our long-term relationships and our efforts in developing new client relationships; • developing new client relationships; • expanding the breadth and depth of our industry expertise and selectively adding or reinforcing practice areas, such as our Capital Markets Advisory, Shareholder Advisory, Sovereign Advisory and Geopolitical Advisory groups; • coordinating our industry specialty activities on a global basis and increasing the integration of our industry experts in M&A with our other professionals; • selectively bolstering our existing presence in certain local markets; • broadening our geographic presence by adding new offices where opportunities arise; • investing in our technology infrastructure and data science capabilities to enhance our business; and • deploying our intellectual capital, strong client relationships and other assets to generate new revenue streams.
Thematic Robotics Health Gender Diversity Demographics Climate Circular Economy Pan-European Large Capitalization Small Capitalization Multi-Capitalization Value Quantitative Eurozone Large Capitalization Small Capitalization Continental European Small Capitalization Multi Capitalization Eurozone Euro-Trend (Thematic) Asian Asia Ex-Japan Quantitative Europe, Australasia and Far East Large Capitalization Small Capitalization Multi-Capitalization Quantitative Sustainable U.S. Large Capitalization Small/Mid Capitalization Multi-Capitalization Sustainable Quantitative Small Capitalization U.K. U.K.
Global Ex-Emerging Markets Thematic Robotics Health Gender Diversity Demographics Climate Circular Economy Pan-European Large Capitalization Small Capitalization Multi-Capitalization Value Quantitative Eurozone Large Capitalization Small Capitalization Thematic Continental European Small Capitalization Multi Capitalization Eurozone Asian Asia Ex-Japan Quantitative Europe, Australasia and Far East Large Capitalization Small Capitalization Multi-Capitalization Quantitative Sustainable U.S. Large Capitalization Small Capitalization Multi-Capitalization Sustainable Quantitative Small Capitalization U.K.
Human Capital We believe that our people are our most important asset. Their talent, integrity and engagement have shaped our success in the past, and they are instrumental to our ability to achieve sustainable growth and deliver value for our shareholders in the future. We strive to create a culture that fosters excellence, collaboration, innovation, empowerment, inclusion and engagement.
Their talent, integrity and engagement have shaped our success in the past, and they are instrumental to our ability to achieve sustainable growth and deliver value for our shareholders in the future. We strive to create a culture that fosters excellence, collaboration, innovation, empowerment, inclusion and engagement.
Certain U.K. subsidiaries of Lazard Group, including Lazard & Co., Limited (“LCL”), Lazard Fund Managers Limited and Lazard Asset Management Limited, which we refer to in this Annual Report on Form 10-K (this “Form 10-K”) as the “U.K. subsidiaries,” are authorized and regulated by the Financial Conduct Authority (the “FCA”), and are subject to various rules and regulations made by the FCA under the authorities conferred upon it by the Financial Services and Markets Act 2000, as amended by the Financial Services Act 2012.
Failure to comply with these requirements may result in monetary, regulatory and, in certain cases, criminal penalties. 10 Certain U.K. subsidiaries of Lazard Group, including Lazard & Co., Limited (“LCL”), Lazard Fund Managers Limited and Lazard Asset Management Limited, which we refer to in this Annual Report on Form 10-K (this “Form 10-K”) as the “U.K. subsidiaries,” are authorized and regulated by the Financial Conduct Authority (the “FCA”), and are subject to various rules and regulations made by the FCA under the authorities conferred upon it by the Financial Services and Markets Act 2000, as amended by the Financial Services Act 2012.
These operations, with 120 managing directors and 1,105 other professionals and support staff as of December 31, 2022, provide our Asset Management business with both a global presence and a local identity.
These operations, with 114 managing directors and 1,107 other professionals and support staff as of December 31, 2023, provide our Asset Management business with both a global presence and a local identity.
When we assist clients in connection with shareholder advisory and corporate preparedness matters, our services may include reviewing and analyzing the business and financial condition of the company, providing insights on the company’s shareholders, assisting in the evaluation of environmental, social and governance (“ESG”) matters, and advising on defense measures and strategic alternatives potentially available to the company.
When we assist clients in connection with shareholder advisory and corporate preparedness matters, our services may include reviewing and analyzing the business, operations, properties, financial condition and prospects of the company, providing insights on the company’s shareholders and advising on defense measures and strategic alternatives potentially available to the company.
In addition to Work for Good, the Company encourages participation in, among others, the Lazard Foundation in the U.S. and Give as You Earn in the U.K., which host additional volunteer opportunities and charitable fundraising events. Employees. As of December 31, 2022, we employed approximately 3,402 full-time people based in 43 cities across 26 countries.
In addition to Work for Good, the Company encourages participation in, among others, the Lazard Foundation in the U.S. and Give as You Earn in the U.K., which host additional volunteer opportunities and charitable fundraising events. Employees. As of December 31, 2023, we employed 3,291 full-time people.
Our top ten clients accounted for 27% of our total assets under management (“AUM”) for the year ended December 31, 2022, with no client individually contributing more than 10% of our Asset Management segment net revenue.
Our top ten clients accounted for 29% of our total assets under management (“AUM”) as of December 31, 2023, with no client individually contributing more than 10% of our Asset Management segment net revenue.
Financial Advisory business, is currently registered as a broker-dealer with the SEC and FINRA, and as a broker-dealer in all 50 U.S. states, the District of Columbia and Puerto Rico.
LLC (“LFNY”), through which we conduct most of our U.S. Financial Advisory business, is currently registered as a broker-dealer with the SEC and FINRA, and as a broker-dealer in all 50 U.S. states, the District of Columbia and Puerto Rico.
Item 1. Business Lazard, one of the world’s preeminent financial advisory and asset management firms, operates from 43 cities across 26 countries in North and South America, Europe, Asia and Australia.
Item 1. Business Lazard, one of the world’s preeminent financial advisory and asset management firms, operates in North and South America, Europe, the Middle East, Asia and Australia.
Betsch was previously a partner at PwC, where she spent 17 years in a variety of audit and advisory roles serving global investment banks and other financial institutions. She also completed a two-year fellowship program supported by the Federal Reserve Board’s Chief Accountant. Scott D. Hoffman, 60 Mr.
Betsch worked at Citadel, where she helped lead the finance and accounting function since 2018. Ms. Betsch was previously a partner at PwC, where she spent 17 years in a variety of audit and advisory roles serving global investment banks and other financial institutions. She also completed a two-year fellowship program supported by the Federal Reserve Board’s Chief Accountant.
When we assist clients in raising private or public market financing or capital, our services include assisting clients in connection with securing, refinancing or restructuring bank loans or other debt, securing venture capital funding, originating and executing, or participating in, public underwritings and private placements of securities, 2 and originating and executing private placements of partnership and similar interests in alternative investment funds such as leveraged buyout, mezzanine or real estate focused funds.
When we assist clients in raising private or public market financing or capital, our services may include assisting clients in connection with securing, refinancing or restructuring bank loans or other debt, securing venture capital and other financial investor funding, originating and executing, or participating in, public underwritings and private placements of securities, and originating and executing private placements of partnership and similar interests in alternative investment funds such as leveraged buyout, mezzanine or real estate focused funds and single or multi-asset continuation funds. 2 We are at the forefront of providing independent advice to governments and governmental agencies in connection with economic developments.
In addition to our M&A and Restructuring and Capital Solutions practices, we also maintain specialties in the following distinct practice areas within our Financial Advisory business: • government and sovereign advisory; • capital structure debt and equity advisory; • shareholder and corporate preparedness advisory; • fundraising and arranging liquidity for third-party alternative investment funds; • corporate finance and other services, including private placements, underwritten offerings related to our Financial Advisory business and transactions involving the exchange or issuance of securities; and • geopolitical advisory. 3 We endeavor to coordinate the activities of the professionals in these areas with our M&A industry specialists in order to offer clients customized teams of cross-functional expertise spanning both industry and practice area expertise.
In addition to our M&A and Restructuring and Liability Management practices, we also maintain specialties in the following distinct practice areas within our Financial Advisory business: • government and sovereign advisory; • capital structure debt and equity advisory; • shareholder and corporate preparedness advisory; • fundraising and arranging liquidity for third-party alternative investment funds; • corporate finance and other services, including private placements, underwritten offerings related to our Financial Advisory business and transactions involving the exchange or issuance of securities; and • geopolitical advisory.
Russo worked for Goldman, Sachs & Co. in the Investment Banking Division, and prior to that, for Barclays Capital. Mr. Russo began his career as an attorney at Milbank, Tweed, Hadley & McCloy. 13 Alexandra Soto, 5 3 Ms. Soto became Group Executive, Human Capital and Workplace Innovation, of Lazard Ltd and Lazard Group in June 2019.
Russo worked for Goldman, Sachs & Co. in the Investment Banking Division, and prior to that, for Barclays Capital. Mr. Russo began his career as an attorney at Milbank, Tweed, Hadley & McCloy. Alexandra Soto, 54 Ms. Soto became Chief Operating Officer of Lazard, Inc. and Lazard Group in October 2023.
Additionally, the combined European regulated group, together with certain of our European Financial Advisory entities, is required to perform an annual risk assessment and provide certain other information on a periodic basis, including financial reports and information relating to financial performance, balance sheet data and capital structure.
Under this supervision, the combined European regulated group is required to comply with minimum requirements for regulatory net capital. Additionally, the combined European regulated group, together with certain of our European Financial Advisory entities, is required to perform an annual risk assessment and provide certain other information on a periodic basis.
Kenneth M. Jacobs, 64 Mr. Jacobs has served as Chairman of the Board of Directors and Chief Executive Officer of Lazard Ltd and Lazard Group since November 2009. Mr. Jacobs has served as a Managing Director of Lazard since 1991 and had been a Deputy Chairman of Lazard from January 2002 until November 2009. Mr.
Jacobs has served as a Managing Director of Lazard, Inc. since 1991 and had been a Deputy Chairman of Lazard from January 2002 until November 2009. Mr. Jacobs also served as Chief Executive Officer of Lazard North America from January 2002 until November 2009. Mr. Jacobs initially joined Lazard in 1988. Mr.
We operate through two business segments: our Financial Advisory business included 212 managing directors and 1,463 professionals and support staff, and our Asset Management business included 120 9 managing directors and 1,105 professionals and support staff . Our Corporate segment included 25 managing directors and 477 professionals and support staff.
We operate through two business segments: our Financial Advisory business included 210 managing directors and 1,393 professionals and support staff, and our Asset Management business included 114 managing directors and 1,107 professionals and support staff. Our Corporate segment included 26 managing directors and 441 professionals and support staff.
We routinely reassess our strategic position and may in the future seek acquisitions or other transactions, including the opportunistic hiring of new employees, in order to further enhance our competitive position.
We routinely reassess our strategic position and aim to add capabilities potentially through acquisitions or other transactions, including the opportunistic hiring of new employees, in order to further enhance our competitive position. We engage in selected alternative investments and private equity activities.
Prior to that he was Lazard’s Head of North American Mergers & Acquisitions since July 2018 and Global Co-Head of Healthcare since November 2016. Mr.
He previously served as Chief Executive Officer of Financial Advisory from June 2019 until September 2023. Prior to that he was Lazard’s Head of North American Mergers & Acquisitions since July 2018 and Global Co-Head of Healthcare since November 2016. Mr.
Going forward, our strategic emphasis in our Financial Advisory business is to leverage the investments we have made to grow our business and drive our productivity. We continue to seek to opportunistically attract outstanding individuals to our business. We routinely reassess our strategic position and may in the future seek opportunities to further enhance our competitive position.
Going forward, our strategic emphasis in our Financial Advisory business is to leverage the investments we have made to grow our business and drive our productivity. We continue to seek to opportunistically attract outstanding individuals to our business, and expect the number of Financial Advisory managing directors to increase in the future as part of our initiative to grow revenues.
Sinai Medical Center and New Visions for Public Schools in New York, and is a member of the National Academy of Medicine. Evan L. Russo, 48 Mr. Russo became Chief Executive Officer of Lazard’s Asset Management business in June 2022. He previously served as Chief Financial Officer of Lazard Ltd and Lazard Group from October 2017 until October 2022. Mr.
She holds a CPA license in the State of New York and is a CFA charterholder. Evan L. Russo, 49 Mr. Russo became Chief Executive Officer of Lazard’s Asset Management business in June 2022. He previously served as Chief Financial Officer of Lazard, Inc. and Lazard Group from October 2017 until October 2022. Mr.
We also may advise as to the timing, financing and pricing of a proposed acquisition and assist in negotiating and closing the acquisition. In addition, we may assist in executing an acquisition by acting as a dealer-manager in transactions structured as a tender or exchange offer.
We also may advise as to the timing, financing and pricing of a proposed acquisition and assist in negotiating and closing the acquisition.
In searching for investment opportunities, many of our investment professionals follow an investment process that incorporates several interconnected components that may include: • fundamental analysis; • quantitative analysis; 5 • accounting analysis; • security selection and portfolio construction; • risk management; and • ESG factors.
In searching for investment opportunities, many of our investment professionals follow an investment process that incorporates several interconnected components that may include: • fundamental analysis; • quantitative analysis; • accounting analysis; • security selection and portfolio construction; • risk management; and • environmental, social and governance (“ESG”) factors. 5 In our Asset Management business, we conduct investment research on a global basis to develop market, industry and company-specific insights and evaluate investment opportunities.
The effect of any such changes cannot be predicted and may impact the manner of operation and profitability of our businesses. Our principal U.S. broker-dealer subsidiary, Lazard Frères & Co. LLC (“LFNY”), through which we conduct most of our U.S.
The laws, rules and regulations comprising this framework of regulation and the interpretation and enforcement of existing laws, rules and regulations are continually changing. The effect of any such changes cannot be predicted and may impact the manner of operation and profitability of our businesses. Our principal U.S. broker-dealer subsidiary, Lazard Frères & Co.
Staffing We staff each of our assignments with a team of quality professionals who have appropriate product, industry and geographic expertise.
Lazard’s Sovereign Advisory Group has advised a number of countries and institutions with respect to sovereign debt and other financial matters. Staffing We staff each of our assignments with a team of quality professionals who have appropriate product, industry and geographic expertise.
The SEC, FINRA and other U.S. and non-U.S. regulatory 10 organizations may examine the activities of, and may expel, fine and otherwise discipline us and our employees. The laws, rules and regulations comprising this framework of regulation and the interpretation and enforcement of existing laws, rules and regulations are continually changing.
These local requirements can result in certain competitive disadvantages to us. The SEC, FINRA and other U.S. and non-U.S. regulatory organizations may examine the activities of, and may expel, fine and otherwise discipline us and our employees.
Prior to joining Lazard in June 1993, Ms. Soto worked for Morgan Stanley. She is a member of the Supervisory Board of Metro AG. 14 Where You Can Find Additional Information Lazard Ltd files current, annual and quarterly reports, proxy statements and other information required by the Exchange Act with the SEC.
Weideman served as Associate Counsel to the President at the White House and as a litigator at Williams & Connolly. 14 Where You Can Find Additional Information Lazard files current, annual and quarterly reports, proxy statements and other information required by the Exchange Act with the SEC.
We may also continue to expand our geographic reach where opportunities arise. We engage in selected alternative investments and private equity activities. In 2009, we established a private equity business with The Edgewater Funds (“Edgewater”), a Chicago-based private equity firm, through the acquisition of Edgewater’s management vehicles.
In 2009, we established a private equity business with The Edgewater Funds (“Edgewater”), a Chicago-based private equity firm, through the acquisition of Edgewater’s management vehicles. As of December 31, 2023, Edgewater had approximately $1.6 billion of AUM and unfunded fee-earning commitments.
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We maintain a major local presence in the United States (the “U.S.”), the United Kingdom (the “U.K.”) and France, including a 1 network of regional branch offices in the U.S., as well as a presence in Argentina, Belgium, Brazil, Canada, Chile, China, Colom bia, Germany, Hong Kong, Italy, Japan, Mexico, the Netherlan ds, Panama, Singap ore, Spain, Sweden and the Middle East region.
Added
We maintain a major local presence in the United States (the “U.S.”), the United Kingdom (the “U.K.”) and France, with offices across the world as a part of our global network. For a full list of our current locations, visit www.lazard.com.
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We are at the forefront of providing independent advice to governments and governmental agencies in connection with economic developments. Lazard’s Sovereign Advisory Group has advised a number of countries and institutions with respect to sovereign debt and other financial matters.
Added
Net hiring may also increase compensation expenses. We routinely reassess our strategic position and may in the future seek opportunities to further enhance our competitive position.
Removed
In our Asset Management business, we conduct investment research on a global basis to develop market, industry and company-specific insights and evaluate investment opportunities.
Added
We have historically, and may in the future, invest our own capital alongside that of other investors, in connection with certain of our activities in managing alternative asset and private equity investment vehicles. Human Capital We believe that our people are our most important asset.
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We also believe that our specific investment strategies, global reach, unique brand identity and access to multiple distribution channels may allow us to expand into new investment products, strategies and geographic locations. In addition, we may expand our participation in alternative investment activities through investments in new and successor funds, and through organic growth, acquisitions or otherwise.
Added
Kenneth M. Jacobs, 65 Mr. Jacobs became Executive Chairman at Lazard, Inc. and Lazard Group in October 2023 after previously serving as Chairman of the Board of Directors and Chief Executive Officer of Lazard, Inc. and Lazard Group from November 2009 through September 2023. Mr.
Removed
As of December 31, 2022, Edgewater had approximately $1.0 billion of AUM and unfunded fee-earning commitments. Historically, Lazard also has made selected investments with its own capital, often alongside capital of qualified institutional and individual investors in connection with Lazard’s selected alternative investments and private equity activities.
Added
Jacobs is a member of the Boards of Trustees of the University of Chicago and the Brookings Institution. He is also a Director of the Partnership for New York City, and a member of the Council on Foreign Relations. Peter Orszag, 55 Mr. Orszag became Chief Executive Officer of Lazard, Inc. and Lazard Group in October 2023.
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These investments typically have been organized in funds that make substantial or 8 controlling investments in private or public companies, generally through privately negotiated transactions . While potentially risky and frequently illiquid, such investments, when successful, can yield investors substantial returns on capital and generate attractive management and performance-based incentive fees for the sponsor of such funds.
Added
Sinai Medical Center and New Visions for Public Schools in New York, and is a member of the National Academy of Medicine. Mary Ann Betsch, 45 Ms. Betsch became Chief Financial Officer of Lazard, Inc. and Lazard Group in October 2022. Prior to joining Lazard, Ms.
Removed
These local requirements can result in certain competitive disadvantages to us. In the U.S., the SEC is the federal agency responsible for the administration of the federal securities laws. FINRA is a voluntary, self-regulatory body composed of members, such as our broker-dealer subsidiaries, that have agreed to abide by FINRA’s rules and regulations.
Added
Soto was previously Chief Operating Officer of Lazard Europe Financial Advisory from January 2006 to July 2018, and Chief Operating Officer of Lazard Paris Financial Advisory from October 2009 to August 2013. Prior to joining Lazard in June 1993, Ms. Soto worked for Morgan Stanley. She is a member of the Supervisory Board of Metro AG. Christian A.
Removed
Lazard Middle Market LLC is registered as a broker-dealer with the SEC and FINRA and as a broker-dealer in various U.S. states and territories.
Added
Weideman, 48 Mr. Weideman became General Counsel of Lazard, Inc. and Lazard Group in October 2023. Prior to joining 13 Lazard, Mr. Weideman was global General Counsel and a partner at Apollo Global Management, where he led and managed Apollo's legal, tax, and compliance team. Mr.
Removed
Failure to comply with these requirements may result in monetary, regulatory and, in certain cases, criminal penalties.
Added
Weideman also served in senior roles at the United States Department of the Treasury including as Deputy General Counsel and then Chief of Staff. Prior to the Department of Treasury, Mr.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeYou should carefully consider this summary, together with the more detailed description of each risk factor contained below. • Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the assets we manage in our Asset Management business. • Fluctuations in foreign currency exchange rates could reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM. • Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios. • Our business, financial condition and results of operations could be materially adversely affected by pandemics, including the ongoing COVID-19 pandemic. • Due to the nature of our business, financial results could differ significantly from period to period, which may make it difficult for us to achieve steady earnings growth on a quarterly basis. • Our ability to retain our managing directors and other key professional employees, including maintaining compensation levels at an appropriate level, is critical to the success of our business and failure to do so may materially adversely affect our results of operations and financial position. • The financial services industry, and all of the businesses in which we compete, are intensely competitive. • A substantial portion of our revenue is derived from Financial Advisory fees, which are not long-term contracted sources of revenue and are subject to intense competition. • If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue could suffer. 15 • Certain of our services are dependent on the availability of private capital for deployment in illiquid asset classes. • Potential underwriting activities or advisory roles on capital raises may expose us to risk. • Our investment style in our Asset Management business, including the mix of asset classes and investment strategies comprising our AUM, may underperform or generate less demand than other investment approaches, which may result in significant client or asset departures or a reduction in AUM. • We could lose clients and suffer a decline in our Asset Management revenue and earnings if the investments we choose in our Asset Management business perform poorly, regardless of overall trends in the prices of securities. • Because many of our Asset Management clients can remove the assets we manage on short notice, we may experience unexpected declines in revenue and profitability. • Access to clients through intermediaries and consultants is important to our Asset Management business, and reductions in referrals from such intermediaries or consultants or poor reviews of our products or our organization by such intermediaries or consultants could materially reduce our revenue and impair our ability to attract new clients. • Our Asset Management business relies on non-affiliated third-party service providers. • Certain of our investments are in relatively high-risk, illiquid assets, and we may lose some or all of the principal amount of these investments or fail to realize any profits from these investments for a considerable period of time. • We may pursue new business lines, acquisitions, joint ventures, cooperation agreements or other growth or geographic expansion strategies that may result in additional risks and uncertainties in our business and could present unforeseen integration obstacles or costs. • An inability to access the debt and equity capital markets as a result of our debt obligations, credit ratings or other factors could impair our liquidity, increase our borrowing costs or otherwise adversely affect our financial position or results of operations. • The soundness of third parties, including our clients, as well as financial, governmental and other institutions, could adversely affect us. • Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth. • Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses. • The financial services industry faces substantial litigation and regulatory risks, and we may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or if conflicts of interest should arise. • Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business. • Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm. • A failure in or breach of our information systems or infrastructure, or those of third parties with which we do business, including as a result of cyber attacks, could disrupt our businesses, lead to reputational harm and legal liability or otherwise impact our ability to operate our business. • Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business. • Uncertainty regarding the outcome of future arrangements between the European Union and the United Kingdom may adversely affect our business. 16 • In the event of a change or adverse interpretation of relevant income tax law, regulation or treaty, or a failure to qualify for treaty benefits, our overall tax rate may be substantially higher than the rate used for purposes of our consolidated financial statements. • Tax authorities may challenge our tax computations and classifications, our transfer pricing methods and our application of related policies and methods. • Our subsidiaries may be required to make payments under the Amended and Restated Tax Receivable Agreement.
Biggest changeYou should carefully consider this summary, together with the more detailed description of each risk factor contained below. • Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the assets we manage in our Asset Management business. • Consequences of geopolitical conditions, military conflicts, wars and acts of terrorism could adversely affect our business, financial condition and results of operations. • Fluctuations in foreign currency exchange rates could reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM. • Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios. • Our business, financial condition and results of operations could be materially adversely affected by pandemics. • Due to the nature of our business, financial results could differ significantly from period to period, which may make it difficult for us to achieve steady earnings growth on a quarterly basis. • Our ability to retain and attract managing directors and other key professional employees, including maintaining compensation levels at an appropriate level, is critical to the success of our business and failure to do so may materially adversely affect our results of operations and financial position. • The financial services industry, and all of the businesses in which we compete, are intensely competitive. • A substantial portion of our revenue is derived from Financial Advisory fees, which are not long-term contracted sources of revenue and are subject to intense competition. • If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue could suffer. • Certain of our services are dependent on the availability of private capital for deployment in illiquid asset classes. • Potential underwriting or deal manager activities or advisory roles on capital raises or exchange transactions may expose us to risk. • Our investment style in our Asset Management business, including the mix of asset classes and investment strategies comprising our AUM, may underperform or generate less demand than other investment approaches, which may result in significant client or asset departures or a reduction in AUM. • We could lose clients and suffer a decline in our Asset Management revenue and earnings if the investments we choose in our Asset Management business perform poorly, regardless of overall trends in the prices of securities. • Because many of our Asset Management clients can remove the assets we manage on short notice, we may experience unexpected declines in revenue and profitability. • Access to clients through intermediaries and consultants is important to our Asset Management business, and reductions in referrals from such intermediaries or consultants or poor reviews of our products or our organization by such intermediaries or consultants could materially reduce our revenue and impair our ability to attract new clients. • Our Asset Management business relies on non-affiliated third-party service providers. • Certain of our investments are in relatively high-risk, illiquid assets, and we may lose some or all of the principal amount of these investments or fail to realize any profits from these investments for a considerable period of time. 16 • We may pursue new business lines, acquisitions, joint ventures, cooperation agreements or other growth or geographic expansion strategies that may result in additional risks and uncertainties in our business and could present unforeseen integration obstacles or costs. • An inability to access the debt and equity capital markets as a result of our debt obligations, credit ratings or other factors could impair our liquidity, increase our borrowing costs or otherwise adversely affect our financial position or results of operations. • The soundness of third parties, including our clients, as well as financial, governmental and other institutions, could adversely affect us. • Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth. • Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses. • The financial services industry faces substantial litigation and regulatory risks, and we may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or if conflicts of interest should arise. • Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business. • Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm. • A failure in or breach of our information systems or infrastructure, or those of third parties with which we do business, including as a result of cybersecurity incidents or threats, could disrupt our businesses, lead to reputational harm and legal liability or otherwise impact our ability to operate our business. • Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business. • Uncertainty regarding the outcome of future arrangements between the European Union and the United Kingdom may adversely affect our business. • Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could negatively impact our effective tax rate. • Tax authorities may challenge our tax computations and transfer pricing methods and our application of related policies and methods. • Anti-takeover provisions in our organizational documents and Delaware law could delay or prevent a change in control. • Our subsidiaries may be required to make payments under the Amended and Restated Tax Receivable Agreement.
Poor investment performance could impair our revenue and growth because: • existing clients might withdraw funds from our Asset Management business in favor of better performing products, which would result in lower investment advisory fees; • our incentive fees, which provide us with a set percentage of returns on some alternative investment and private equity funds and other accounts, would decline; • third-party financial intermediaries, rating services, advisors or consultants may rate our products poorly, which may result in client withdrawals and reduced asset flows; or • firms with which we have strategic alliances may terminate such relationships with us, and future strategic alliances may be unavailable.
Poor investment performance could impair our revenue and growth because: • existing clients might withdraw funds from our Asset Management business in favor of better performing products, which would result in lower asset management fees; • our incentive fees, which provide us with a set percentage of returns on some alternative investment and private equity funds and other accounts, would decline; • third-party financial intermediaries, rating services, advisors or consultants may rate our products poorly, which may result in client withdrawals and reduced asset flows; or • firms with which we have strategic alliances may terminate such relationships with us, and future strategic alliances may be unavailable.
Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures or to other investment management firms for a number of reasons, including investment performance relative to the market, prior years or other investment management firms, departures from or changes to the teams that manage our investment products, changes in prevailing interest rates and financial market performance or for no stated reason.
Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures or to other asset management firms for a number of reasons, including investment performance relative to the market, prior years or other asset management firms, departures from or changes to the teams that manage our investment products, changes in prevailing interest rates and financial market performance or for no stated reason.
In addition, we operate in a highly competitive environment where typically there are no long-term contracted sources of revenue. Each revenue-generating engagement typically is separately awarded and negotiated. Furthermore, many businesses do not routinely engage in transactions requiring our services, and as a consequence, 21 our fee paying engagements with many clients are not likely to be predictable.
In addition, we operate in a highly competitive environment where there are typically no long-term contracted sources of revenue. Each revenue-generating engagement typically is separately awarded and negotiated. Furthermore, many businesses do not routinely engage in transactions requiring our services, and as a consequence, our fee paying engagements with many clients are not likely to be predictable.
Furthermore, we seek to align the interests of our managing directors and other key professional employees with that of our shareholders by awarding deferred compensation in the form of equity, and any change in our ability to grant such awards, including as a result of a shareholder vote against any of our equity incentive plans, could have 20 a negative impact on our ability to promote such alignment.
Furthermore, we seek to align the interests of our managing directors and other key professional employees with that of our shareholders by awarding deferred compensation in the form of equity, and any change in our ability to grant such awards, including as a result of a shareholder vote against any of our equity incentive plans, could have a negative impact on our ability to promote such alignment.
In particular, a prolonged growth environment, as we have seen over the last several years, may cause some of our investment strategies to go out of favor with some clients, advisors, consultants or third-party intermediaries. In addition, all of our investment strategies are 22 actively managed strategies which seek to outperform relative to a benchmark or generate an absolute return.
In particular, a prolonged growth environment, as we have seen over the last several years, may cause some of our investment strategies to go out of favor with some clients, advisors, consultants or third-party intermediaries. In addition, all of our investment strategies are actively managed strategies which seek to outperform relative to a benchmark or generate an absolute return.
Risks Related to Economic and Current Conditions Impacting Us and our Business Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the assets we manage in our Asset Management business, which, in each case, could materially reduce our revenue or income and adversely affect our financial position.
Risks Related to Economic and Current Conditions Impacting Us and our Business Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the assets we 17 manage in our Asset Management business, which, in each case, could materially reduce our revenue or income and adversely affect our financial position.
Such legal actions may include allegations relating to aiding and abetting breaches of fiduciary duties and to materially false or misleading statements or misrepresentations made in connection with securities and other transactions, including private placements. We may also be exposed to potential liability for the fairness opinions and other advice provided to participants in corporate transactions.
Such legal actions may include allegations relating to aiding and abetting breaches of fiduciary duties and to materially false or misleading statements or misrepresentations made in connection with securities and other transactions, including private placements. We may also be exposed to potential liability for the fairness opinions and other advice provided to participants in transactions.
This, in turn, may adversely affect demand for our strategies or result in fee pressure on our business overall. In combination with poor performance relative to peers, changes in personnel, challenging market environments or other difficulties, the underperformance of our investment style may result in significant client or asset departures or a reduction in AUM.
This, in turn, may adversely affect demand for our strategies or result in fee pressure on our business overall. In combination with poor performance relative to peers, changes in personnel, challenging market environments or other 22 difficulties, the underperformance of our investment style may result in significant client or asset departures or a reduction in AUM.
Our ability to retain our managing directors and other key professional employees, including maintaining compensation levels at an appropriate level, is critical to the success of our business and failure to do so may materially adversely affect our results of operations and financial position. Our people are our most important asset.
Our ability to retain and attract managing directors and other key professional employees, including maintaining compensation levels at an appropriate level, is critical to the success of our business and failure to do so may materially adversely affect our results of operations and financial position. Our people are our most important asset.
Any breach of 29 confidences as a result of employee misconduct may adversely affect our reputation, impair our ability to attract and retain Financial Advisory clients and subject us to liability. Similarly, in our Asset Management business, we have authority over client assets, and we may, from time to time, have custody of such assets.
Any breach of confidences as a result of employee misconduct may adversely affect our reputation, impair our ability to attract and retain Financial Advisory clients and subject us to liability. Similarly, in our Asset Management business, we have authority over client assets, and we may, from time to time, have custody of such assets.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events.
Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events.
In addition, even if such earnings were sufficient, the agreements governing the current and future obligations of Lazard Group’s subsidiaries, regulatory requirements, including regulatory capital requirements, with respect to our broker-dealer and other regulated subsidiaries, foreign exchange controls and a variety of other factors may impede our subsidiaries’ ability to provide Lazard Group with sufficient dividends, distributions or loans to fund its financial obligations, when due. 33 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS We have made statements under the captions “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Form 10-K that are forward-looking statements.
In addition, even if such earnings were sufficient, the agreements governing the current and future obligations of Lazard Group’s subsidiaries, regulatory requirements, including regulatory capital requirements, with respect to our broker-dealer and other regulated subsidiaries, foreign exchange controls and a variety of other factors may impede our subsidiaries’ ability to provide Lazard Group with sufficient dividends, distributions or loans to fund its financial obligations, when due. 32 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS We have made statements under the captions “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Form 10-K that are forward-looking statements.
In addition, we often have discretion to trade client assets on the client’s behalf and must do so acting in the best interests of the client. As a result, we are subject to a number of obligations and standards, and the violation of those obligations or standards may adversely affect our clients and us.
In addition, we often have discretion to trade client assets on the client’s behalf and must do so acting in the best interests of the client. As a result, we are subject to a number of obligations and standards, and the violation of those 28 obligations or standards may adversely affect our clients and us.
Accordingly, a decline in the prices of securities, or in specific geographic markets or sectors that constitute a significant portion of our AUM ( e.g. , our emerging markets strategies), would be expected to cause our revenue and income to decline by causing: • the value of our AUM to decrease, which would result in lower investment advisory fees; • some of our clients to withdraw funds from our Asset Management business due to the uncertainty or volatility in the market, or in favor of investments they perceive as offering greater opportunity or lower risk, which would also result in lower investment advisory fees; • some of our clients or prospective clients to hesitate in allocating assets to our Asset Management business due to the uncertainty or volatility in the market, which would also result in lower investment advisory fees; or • negative absolute performance returns for some accounts that have performance-based incentive fees, which would result in a reduction of revenue from such fees.
Accordingly, a decline in the prices of securities, or in specific geographic markets or sectors that constitute a significant portion of our AUM ( e.g. , our emerging markets strategies), would be expected to cause our revenue and income to decline by causing: • the value of our AUM to decrease, which would result in lower asset management fees; • some of our clients to withdraw funds from our Asset Management business due to the uncertainty or volatility in the market, or in favor of investments they perceive as offering greater opportunity or lower risk, which would also result in lower asset management advisory fees; • some of our clients or prospective clients to hesitate in allocating new assets to our Asset Management business due to the uncertainty or volatility in the market, which would also result in lower asset management fees; or • negative absolute performance returns for some accounts that have performance-based incentive fees, which would result in a reduction of revenue from such fees.
Poor oversight and control or inferior performance or service on the part of the service provider could result in our loss of customers and violations of applicable rules and regulations. Any such failure could adversely affect our ability to effect transactions and to manage our exposure to risk, and thereby adversely affect our results of operations.
Poor oversight and control or inferior performance or service on the part of the service provider could result in our loss of customers and violations of applicable rules and regulations. Any such failure could also adversely affect our ability to effect transactions and to manage our exposure to risk, and thereby adversely affect our results of operations.
We expect to 24 continue to explore new business lines, acquisitions, growth strategies and partnership or strategic alliance opportunities that we believe to be attractive. Acquisitions, growth strategies, joint ventures and new business lines involve a number of risks and present financial, managerial and operational challenges.
We expect to continue to explore new business lines, acquisitions, growth strategies and partnership or strategic alliance opportunities that we believe to be attractive. Acquisitions, growth strategies, joint ventures and new business lines involve a number of risks and present financial, managerial and operational challenges.
This business faces the risk of operational failure of any of our clearing agents, the exchanges, clearing houses or other intermediaries we use to facilitate our securities transactions. We oversee and manage these relationships.
This business faces the risk of 23 operational failure of any of our clearing agents, the exchanges, clearing houses or other intermediaries we use to facilitate our securities transactions. We oversee and manage these relationships.
As of December 31, 2022, Lazard Group and its subsidiaries had approximately $1.7 billion in debt outstanding, of which $400 million, $300 million, $500 million and $500 million relate to Lazard Group senior notes that mature in 2025, 2027, 2028 and 2029, respectively. This debt has certain mandated payment obligations, which may constrain our ability to operate our business.
As of December 31, 2023, Lazard Group and its subsidiaries had approximately $1.7 billion in debt outstanding, of which $400 million, $300 million, $500 million and $500 million relate to Lazard Group senior notes that mature in 2025, 2027, 2028 and 2029, respectively. This debt has certain mandated payment obligations, which may constrain our ability to operate our business.
In addition, our Asset Management revenue is particularly sensitive to fluctuations in our AUM. Asset Management fees are predominantly based on the daily, monthly or quarterly average AUM.
In addition, our Asset Management revenue is particularly sensitive to fluctuations in our AUM. Asset Management fees are predominantly based on the daily, monthly or quarterly AUM.
For example, a client or counterparty could delay or terminate an acquisition transaction because of a failure to agree upon final terms, failure to obtain necessary regulatory consents or board of directors, or acquirer’s or stockholder approval, failure to secure necessary financing, adverse market conditions or because the seller’s business is experiencing unexpected operating or financial problems.
For example, a client or counterparty could delay or terminate an acquisition transaction because of a failure to agree upon final terms, failure to obtain necessary regulatory consents or board of directors, acquirer’s or stockholders’ approval, failure to secure necessary financing, adverse market conditions or because the seller’s business is experiencing unexpected operating or financial problems.
As cyber threats continue to multiply, become more sophisticated, frequent and severe and threaten additional aspects of our businesses, we may also be required to expend additional resources on information security and compliance costs in order to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities or other exposures.
As threats continue to multiply, become more sophisticated, frequent and severe and threaten additional aspects of our businesses, we may also be required to expend additional resources on information security and compliance costs in order to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities or other exposures.
Our financial statements are denominated in U.S. Dollars and, for the year ended December 31, 2022, we received a portion of our consolidated net revenue in other currencies, predominantly in Euros and British Pounds. In addition, we pay a portion of our expenses in such other currencies. The exchange rates of these currencies versus the U.S.
Our financial statements are denominated in U.S. Dollars and, for the year ended December 31, 2023, we received a portion of our consolidated net revenue in other currencies, predominantly in Euros and British Pounds. In addition, we pay a portion of our expenses in such other currencies. The exchange rates of these currencies versus the U.S.
In addition to regulatory scrutiny and potential fines and sanctions, regulators continue to examine different aspects 27 of the asset management industry.
In addition to regulatory scrutiny and potential fines and sanctions, regulators continue to examine different aspects of the asset management industry.
This has reduced our ability to utilize commissions to pay for research services and other soft dollar services in certain European jurisdictions. Similar pressures may come from future changes with in the asset management industry itself, which may further increase our costs related to external research services.
This has reduced our ability to utilize commissions to pay for research services and other soft dollar services in certain European jurisdictions. Similar pressures may come from future changes within the asset management industry itself, which may further increase our costs related to external research services.
For example, disruptions to, and volatility in, the global financial markets as a result of a pandemic such as COVID-19 may result in a decrease in the volume and value of M&A transactions, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements.
For example, disruptions to, and volatility in, the global financial markets as a result of a pandemic may result in a decrease in the volume and value of M&A transactions, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements.
We expect that we will need to review whether to continue to upgrade and expand the capabilities of these systems in the future to avoid disruption of, or constraints on, our operations, and any such system upgrades or expansions could result in significant costs to us.
We expect that we will need to review whether to continue to upgrade and expand the capabilities of these systems, including legacy systems, in the future to avoid disruption of, or constraints on, our operations, and any such system upgrades or expansions could result in significant costs to us.
See “ Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth. ” 30 Similarly, due to the unprecedented number of employees frequently deploying the remote working capabilities of our information systems, including on home networks or through increased use of mobile technologies, we face a heightened risk of operational interruptions and security breaches involving such systems.
See “ Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth.” Similarly, due to the significant number of employees frequently deploying the remote working capabilities of our information systems, including on home networks or through increased use of mobile technologies, we face a heightened risk of operational interruptions and security breaches involving such systems.
Those same market disruptions may result in a decrease in our AUM resulting in lower investment advisory fees for our Asset Management business, may affect our ability to effect transactions for our Asset Management clients and may negatively impact the liquidity of the assets held in our client portfolios.
Those same market disruptions may result in a decrease in our AUM resulting in lower asset management fees for our Asset Management business, may affect our ability to effect transactions for our Asset Management clients and may negatively impact the liquidity of the assets held in our client portfolios.
For the year ended December 31, 2022 , our Asset Management business obtained research and other eligible services through third-party soft dollar arrangements, the total value of which we estimate to be approximately $ 24 million.
For the year ended December 31, 2023, our Asset Management business obtained research and other eligible services through third-party soft dollar arrangements, the total value of which we estimate to be approximately $24 million.
Risks Relating to Our Capital Structure Lazard Ltd is a holding company and, accordingly, depends upon distributions from Lazard Group to pay dividends and taxes and other expenses. Lazard Ltd is a holding company and has no independent means of generating significant revenue or cash.
Risks Relating to Our Capital Structure Lazard, Inc. is a holding company and, accordingly, depends upon distributions from Lazard Group to pay dividends and taxes and other expenses. Lazard, Inc. is a holding company and has no independent means of generating significant revenue or cash.
Our effective tax rate is based upon the application of currently applicable income tax laws, regulations and treaties, and current judicial and administrative interpretations of those income tax laws, regulations and treaties, and upon our non-U.S. subsidiaries’ ability to qualify for benefits under those treaties.
Our effective tax rate is based upon the application of currently enacted income tax laws, regulations and treaties, and current judicial and administrative interpretations of those income tax laws, regulations and treaties, and upon our non-U.S. subsidiaries’ ability to qualify for benefits under those treaties.
We may also lose clients from time-to-time as a result of , among other reasons, the sale or merger of a client, a change in a client’s senior management or competition from other financial advisors and financial institutions.
We may also lose clients from time-to-time as a result of, among other reasons, the sale, merger or restructuring of a client, a change in a client’s senior management or competition from other 21 financial advisors and financial institutions.
In addition, if we act as an underwriter or financial advisor, we may also be subject to liability for material misstatements or omissions in prospectuses and other offering documents relating to the applicable transactions.
In addition, if we act as an underwriter, deal manager or financial advisor, we may also be subject to liability for material misstatements or omissions in prospectuses and other offering documents relating to the applicable transactions.
For example, the use of “soft dollars,” where a portion of commissions paid to broker-dealers in connection with the execution of client trades also pays for research and other eligible services that are used by investment advisors, has in the last several years been re examined by different regulatory bodies and industry participants.
For example, the use of “soft dollars,” where a portion of commissions paid to broker-dealers in connection with the execution of client trades also pays for research and other eligible services that are used by investment advisors, has in the last several years been reexamined by different regulatory bodies and industry participants.
Forward-looking statements include, but are not limited to, statements about: • financial goals, including ratios of compensation and benefits expense to operating revenue; • ability to deploy surplus cash through dividends, share repurchases and debt repurchases; • ability to offset stockholder dilution through share repurchases; • possible or assumed future results of operations and operating cash flows; • strategies and investment policies; • financing plans and the availability of short-term borrowing; • competitive position; • future acquisitions, including the consideration to be paid and the timing of consummation; • potential growth opportunities available to our businesses; 34 • potential impact of investments in our technology infrastructure and data science capabilities; • recruitment and retention of our managing directors and employees; • potential levels of compensation expense, including awarded compensation and benefits expense and adjusted compensation and benefits expense, and non-compensation expense; • potential operating performance, achievements, productivity improvements, efficiency and cost reduction efforts; • statements regarding ESG goals and initiatives; • likelihood of success and impact of litigation; • expected tax rates, including effective tax rates; • changes in interest and tax rates; • availability of certain tax benefits, including certain potential deductions; • potential impact of certain events or circumstances on our financial statements and operations; • changes in foreign currency exchange rates; • expectations with respect to the economy, the securities markets, the market for mergers, acquisitions, restructuring and other financial advisory activity, the market for asset management activity and other macroeconomic, regional and industry trends; • effects of competition on our business; and • impact of new or future legislation and regulation, including tax laws and regulations, on our business.
Forward-looking statements include, but are not limited to, statements about: • financial goals, including ratios of compensation and benefits expense to operating revenue; • ability to deploy surplus cash through dividends, share repurchases and debt repurchases; • ability to offset stockholder dilution through share repurchases; • possible or assumed future results of operations and operating cash flows; • strategies and investment policies; • financing plans and the availability of short-term borrowing; • competitive position; • future acquisitions, including the consideration to be paid and the timing of consummation; • potential growth opportunities available to our businesses; • potential impact of investments in our technology infrastructure and data science capabilities; • recruitment and retention of our managing directors and employees; 33 • potential levels of compensation expense, including adjusted compensation and benefits expense, and non-compensation expense; • potential operating performance, achievements, productivity improvements, efficiency and cost reduction efforts; • statements regarding ESG goals and initiatives; • likelihood of success and impact of litigation; • ability to realize the anticipated benefits of the Conversion and impact on the trading price of our stock; • expected tax rates, including effective tax rates; • changes in interest and tax rates; • availability of certain tax benefits, including certain potential deductions; • potential impact of certain events or circumstances on our financial statements and operations; • changes in foreign currency exchange rates; • expectations with respect to the economy, the securities markets, the market for mergers, acquisitions, restructuring and other financial advisory activity, the market for asset management activity and other macroeconomic, regional and industry trends; • effects of competition on our business; and • impact of new or future legislation and regulation, including tax laws and regulations, on our business.
In such cases, any indemnification provisions in the applicable underwriting or financial advisory agreement may not be available to us or may not be sufficient to protect us against losses arising from such liability.
In such cases, any indemnification provisions in the applicable underwriting, deal manager or financial advisory agreement may not be available to us or may not be sufficient to protect us against losses arising from such liability.
In addition, if we were to experience a local or regional disaster or other business continuity problem, such as a pandemic or other man-made or natural disaster, our continued success will depend, in part, on the availability of our personnel and office facilities and the proper functioning of and remote accessibility to our computer, telecommunications, transaction processing and other information systems and operations, as well as those of third parties on whom we rely.
In addition, if we were to experience a local or regional disaster or other business continuity problem, such as a pandemic or man-made or natural disaster, our continued success would depend, in part, on the availability of our personnel and office facilities and the proper functioning of and remote accessibility to our computers, telecommunications, transaction processing and other information systems and operations, as well as those of third parties on whom we rely.
Multiple levels of government, foreign legislatures and international organizations, such as the Organization for Economic Co-operation and Development (“OECD”) and the European Union, are increasingly focused on tax reform and have proposed and implemented tax legislation and regulations that could affect the taxation of multinational companies.
Multiple levels of government, foreign legislatures and international organizations, such as the Organization for Economic Cooperation and Development (“OECD”) and the European Union, are increasingly focused on tax reform and have proposed and implemented tax legislation and regulations that could affect the taxation of multinational companies.
Although back-up systems are in place, our back-up procedures and capabilities in the event of a failure or interruption may not be adequate. Particularly in our Asset Management business, we rely heavily on our financial, accounting, trading, compliance and other data processing systems and those of our third party vendors or service providers who support these functions.
Although back-up systems are in place, our back-up procedures and capabilities in the event of a failure or interruption may not be adequate. Aspects of our business, including our Asset Management business, rely heavily on our financial, accounting, trading, compliance and other data processing systems and those of our third-party vendors or service providers who support these functions.
Our subsidiaries may be required to make payments under the Amended and Restated Tax Receivable Agreement. The IRS may challenge the tax basis increases upon which payments are based and, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings.
The IRS may challenge the tax basis increases upon which payments are based and, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings.
We historically have earned a substantial portion of our revenue from advisory fees paid to us by our Financial Advisory clients, which usually are payable upon the successful completion of a particular transaction or restructuring. For example, for the year ended December 31, 2022, Financial Advisory services accounted for approximately 60% of our consolidated net revenue.
We historically have earned a substantial portion of our revenue from advisory fees paid to us by our Financial Advisory clients, which usually are payable upon the successful completion of a particular transaction or restructuring. For example, for the year ended December 31, 2023, Financial Advisory services accounted for approximately 55% of our consolidated net revenue.
Any such cyber attack or other security breach, or any disruption of or failure in the physical or logical infrastructure or operating systems that support such information systems or our businesses, could significantly impact our ability to operate our businesses and could result in reputational damage, legal liability, the loss of clients or business opportunities and financial losses that are either not insured against or not fully covered through any insurance maintained by us.
Any such cyber attack or other cybersecurity incident or threat, or any disruption of or failure in the physical or logical infrastructure or operating systems that support such information systems or our businesses, could significantly impact our ability to operate our businesses and could result in reputational damage, legal liability, the loss of clients or business opportunities and financial losses that are either not insured against or not fully covered through any insurance maintained by us.
In addition, the ability to terminate relationships may allow clients to renegotiate for lower fees paid for asset management services.
In addition, the ability to terminate relationships may allow clients to renegotiate reduced fees paid for asset management services.
To the extent that our subsidiaries need funds to pay taxes on their share of Lazard Group’s net taxable income, or if Lazard Ltd needs funds for any other purpose, and Lazard Group is restricted from making such distributions under applicable law or regulation, or is otherwise unable to provide such funds, it could materially adversely affect our business, financial condition or results of operations.
To the extent that our subsidiaries need funds to pay taxes on their share of Lazard Group’s net taxable income, or if Lazard, Inc. needs funds for any other purpose, and Lazard Group is restricted from making such distributions under applicable law or regulation, or is otherwise unable to provide such funds, it could materially adversely affect our business, financial condition, results of operations and/or ability to return capital to our shareholders.
In addition, these arrangements and agreements have a limited duration and expire after a certain period of time. We continue to be subject to intense competition in the financial services industry regarding the recruitment and retention of key professionals, and have experienced departures from and added to our professional ranks as a result.
In addition, these arrangements and agreements may face enforceability challenges and have a limited duration and expire after a certain period of time. We continue to be subject to intense competition in the 20 financial services industry regarding the recruitment and retention of key professionals, and have experienced departures from and added to our professional ranks as a result.
In addition, any changes to the mix of cash and deferred incentive compensation granted to our employees may affect certain financial measures applicable to our business, including ratios of compensation and benefits expense to revenue, and may result in the issuance of increased levels of common stock, par value $0.01 per share, to our employees upon vesting of restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), restricted stock awards (“RSAs”) , profits interest participation rights or other equity-based awards in a particular year.
In addition, any changes to the mix of cash and deferred incentive compensation granted to our employees may affect certain financial measures applicable to our business, including ratios of compensation and benefits expense to revenue, and may result in the issuance of increased levels of common stock to our employees upon vesting of restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), restricted stock awards (“RSAs”), profits interest participation rights (“PIPRs”) or other equity-based awards in a particular year.
We are in compliance with Section 404 of the Sarbanes-Oxley Act as of December 31, 2022.
We are in compliance with Section 404 of the Sarbanes-Oxley Act as of December 31, 2023.
These provisions are complex and could adversely impact our effective tax rate in future years.
All of these provisions are complex and could adversely impact our effective tax rate in future years.
Investors can link to Lazard Ltd, Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-K.
Investors can link to Lazard, Inc., Lazard Group and their operating company websites through http://www.lazard.com. Our websites and social media sites and the information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-K. 34 Item 1B.
These factors include, but are not limited to, the numerous risks and uncertainties outlined in “Risk Factors,” including the following: • a decline in general economic conditions or the global or regional financial markets; • a decline in our revenues, for example due to a decline in overall M&A activity, our share of the M&A market or our AUM; • losses caused by financial or other problems experienced by third parties; • losses due to unidentified or unanticipated risks; • a lack of liquidity, i.e ., ready access to funds, for use in our businesses; and • competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels.
These factors include, but are not limited to, the numerous risks and uncertainties outlined in “Risk Factors,” including the following: • a decline in general economic conditions or the global or regional financial markets; • a decline in our revenues, for example due to a decline in overall M&A activity, our share of the M&A market or our AUM; • losses caused by financial or other problems experienced by third parties; • losses due to unidentified or unanticipated risks; • a lack of liquidity, i.e ., ready access to funds, for use in our businesses; • competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels; and • changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items.
A failure in or breach of our information systems or infrastructure, or those of third parties with which we do business, including as a result of cyber attacks, could disrupt our businesses, lead to reputational harm and legal liability or otherwise impact our ability to operate our business.
A failure in or breach of our information systems or infrastructure, or those of third parties with which we do business, including as a result of cybersecurity incidents or threats, could disrupt our businesses, lead to reputational harm and legal liability or otherwise impact our ability to operate our business.
These fluctuations generally can be attributed to the fact that we earn a substantial portion of our Financial Advisory revenue upon the successful completion of a transaction or a restructuring, the timing of which is uncertain and is not subject to our control.
We experience significant fluctuations in quarterly revenue and profits. These fluctuations generally can be attributed to the fact that we earn a substantial portion of our Financial Advisory revenue upon the successful completion of a transaction or a restructuring, the timing of which is uncertain and is not subject to our control.
To the extent private and public capital focused on illiquid investment opportunities for our clients is limited by the foregoing or other circumstances, our fees generated by these services and, therefore, our results may be adversely affected. Potential underwriting activities or advisory roles on capital raises may expose us to risk.
To the extent private and public capital focused on illiquid investment opportunities is limited by the foregoing or other circumstances, our fees generated by these services and, therefore, our results may be adversely affected. Potential underwriting or deal manager activities or advisory roles on capital raises or exchange transactions may expose us to risk.
Our access to funds also may be impaired if regulatory or governmental authorities take significant action against us or for a variety of other possible reasons. In addition, our borrowing costs and our access to the debt capital markets depend significantly on our credit ratings.
Our access to funds also may be impaired if regulatory or governmental authorities take significant action against us or for a variety of other possible reasons. In addition, our borrowing costs and our access to the debt capital markets depend significantly on market factors, including benchmark interest rates, and our credit ratings.
Such information systems, which frequently include “cloud”-based networks and services, may be subject to unauthorized or fraudulent access, computer viruses or other malicious code or other threats, including “phishing” attempts, that are constantly evolving and that could have a security impact on us.
Such information systems, which frequently include “cloud”-based networks and services, have in the past and may in the future be subject to unauthorized or fraudulent access, computer viruses or other malicious code or other threats, including “phishing” and social engineering attempts, that are constantly evolving and that could have a material security impact on us.
There can be no assurance that we will not suffer material losses relating to cyber attacks on, or other security breaches involving, our information systems, or the information systems of third parties with which we do business, despite taking protective measures to prevent such breaches.
There can be no assurance that we will not suffer material losses relating to cybersecurity incidents or threats, including cyber attacks that exploit vulnerabilities, or other security breaches involving our information and payment systems, or the information systems of third parties with which we do business, despite taking protective measures to prevent such breaches.
The financial services industry is subject to extensive regulation. We are subject to regulation by governmental and self-regulatory organizations in the jurisdictions in which we operate around the world.
We are subject to regulation by governmental and self-regulatory organizations in the jurisdictions in which we operate around the world.
For example, the enactment of all or part of the recommendations set forth or that may be introduced in the OECD project on Base Erosion and Profit Shifting by tax authorities in the countries in which we operate could unfavorably impact our overall tax rate. In addition, the Economic Substance Act came into effect in Bermuda on January 1, 2019.
For example, the enactment of all or part of the recommendations set forth or that may be introduced in the OECD project on Base Erosion and Profit Shifting by tax authorities in the countries in which we operate could unfavorably impact our overall tax rate.
There is currently no certainty on which European Union legacy laws and regulations will be changed going forward and the U.K. may diverge from these laws and regulations and may decide not to adopt rules that correspond to future European Union legislation.
Government the power to amend, repeal or restate the remaining retained EU laws. There is currently no certainty on which retained EU laws and regulations will be changed going forward and the U.K. may diverge from these laws and regulations and may decide not to adopt rules that correspond to future European Union legislation.
In addition, our clients and other stakeholders may react unfavorably to our acquisition, growth and joint venture strategies or new business lines; we may not realize any anticipated benefits from such actions, we may be exposed to additional liabilities of any new business line, acquired business or joint venture; we may be exposed to litigation in connection with a new business line, acquisition, growth or joint venture transaction; and we may not be able to renew on similar terms (or at all) previously successful joint ventures or similar arrangements, any of which could materially adversely affect our business, financial position and results of operations.
In addition, our clients and other stakeholders may react unfavorably to our acquisition, growth and joint venture strategies or new business lines; we may not realize any anticipated benefits from such actions, we may be exposed to additional liabilities of any new business line, acquired business or joint venture; we may be exposed to litigation in connection with a new business line, acquisition, growth or joint venture transaction; and we may not be able to renew on similar terms (or at all) previously successful joint ventures or similar arrangements, any of which could materially adversely affect our business, financial position and results of operations. 24 An inability to access the debt and equity capital markets as a result of our debt obligations, credit ratings or other factors could impair our liquidity, increase our borrowing costs or otherwise adversely affect our financial position or results of operations.
If the IRS successfully challenges the tax 32 b asis increases we receive , under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings .
If the IRS successfully challenges the tax basis increases we receive, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings. 31 Risks Relating to Our Conversion to a U.S.
Additionally, certain of our third party vendors or service providers, which may process or otherwise have access to confidential or sensitive data, may take, have taken or may take further preventative or protective actions in connection with the COVID-19 pandemic, including instituting policies requiring their respective employees who are capable of performing their functions remotely to do so and implementing or expanding back-up procedures and capabilities, and may be experiencing a growing demand for their services.
Additionally, certain of our third-party vendors or service providers, which may process or otherwise have access to confidential or sensitive data, may have instituted policies allowing their respective employees who are capable of performing their functions remotely to do so and implementing or expanding back-up procedures and capabilities, and may be experiencing a growing demand for their services.
The IRS may challenge the tax basis increases upon which payments are based and, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings. • Lazard Ltd is a holding company and, accordingly, depends upon distributions from Lazard Group to pay dividends and taxes and other expenses. • Lazard Group is a holding company and, accordingly, depends on its subsidiaries to make distributions to Lazard Group to enable it to service its obligations under its indebtedness.
The IRS may challenge the tax basis increases upon which payments are based and, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings. • We may fail to realize the anticipated benefits of the Conversion or those benefits may take longer to realize than expected or not offset the costs of the Conversion, which could have a material and adverse impact on the trading price of our common stock. • Lazard, Inc. is a holding company and, accordingly, depends upon distributions from Lazard Group to pay dividends and taxes and other expenses. • Lazard Group is a holding company and, accordingly, depends on its subsidiaries to make distributions to Lazard Group to enable it to service its obligations under its indebtedness.
If a successful cyber attack or other security breach were to occur against us, our customers or other third parties with which we do business, our confidential or proprietary information, or the confidential or proprietary information of our clients or their counterparties, that is stored in, or transmitted through, such information systems could be compromised or misappropriated.
A successful cyber attack or other cybersecurity incident or threat against us, our customers or other third parties with which we do business, our confidential or proprietary information, or the confidential or proprietary information of our clients or their counterparties, that is stored in, or transmitted through, such information systems could result in compromise or misappropriation of such information.
While we generally have experienced a counter-cyclical relationship between our Mergers and Acquisitions practice and our Restructuring practice, this relationship may not continue in the future, and there is no certainty that strength in one practice will offset, or partially offset, weakness in the other. 17 Our Asset Management business also would be expected to generate lower revenue in a market or general economic downturn.
While we generally have experienced a counter-cyclical relationship between our Mergers and Acquisitions practice and our Restructuring practice, this relationship may not continue in the future, and there is no certainty that strength in one practice will offset, or partially offset, weakness in the other.
Furthermore, as employees continue to perform all or a portion of their job functions remotely on a regular basis, there can be no assurance that our measures implemented to protect the confidentiality of our and our clients’ confidential information will be adequate. Any unauthorized disclosure of such information could result in legal action, regulatory sanctions and reputational or financial harm.
Furthermore, as many 19 employees continue to perform all or a portion of their job functions remotely on a regular basis, there can be no assurance that our measures implemented to protect the confidentiality of our and our clients’ confidential information will be adequate.
We intend to continue to cause Lazard Group to make distributions to our subsidiaries in an amount sufficient to cover all applicable taxes payable by us and dividends, if any, declared by us.
In addition, our subsidiaries incur income taxes on the net taxable income of Lazard Group in their respective tax jurisdictions. We intend to continue to cause Lazard Group to make distributions to our subsidiaries in an amount sufficient to cover all applicable taxes payable by us and dividends, if any, declared by us.
In certain circumstances, we may not have complete control over governance, financial reporting, operations, legal and regulatory compliance or other matters relating to such joint ventures, partnerships or entities.
In addition, we have and may continue to enter into joint ventures, partnerships and invest in entities in which we share ownership or management with unaffiliated third parties. In certain circumstances, we may not have complete control over governance, financial reporting, operations, legal and regulatory compliance or other matters relating to such joint ventures, partnerships or entities.
An assignment, actual or constructive, would trigger these termination provisions and could adversely affect our ability to continue managing client accounts. 23 Access to clients through intermediaries and consultants is important to our Asset Management business, and reductions in referrals from such intermediaries or consultants or poor reviews of our products or our organization by such intermediaries or consultants could materially reduce our revenue and impair our ability to attract new clients.
Access to clients through intermediaries and consultants is important to our Asset Management business, and reductions in referrals from such intermediaries or consultants or poor reviews of our products or our organization by such intermediaries or consultants could materially reduce our revenue and impair our ability to attract new clients.
Over certain time periods, we may have a higher concentration of assets in certain strategies. To the extent that this is the case, underperformance, changes in investment personnel or other changes in these strategies, as well as changes in a variety of macroeconomic and other factors, may result in a withdrawal of assets.
Over certain time periods, we may have a higher concentration of assets in certain strategies. To the extent that this is the case, changes in investment personnel or other changes in these strategies may result in significant withdrawals of assets and related declines in our revenues and operating results.
Risks Related to Our Business and Operations Due to the nature of our business, financial results could differ significantly from period to period, which may make it difficult for us to achieve steady earnings growth on a quarterly basis. 19 We experience significant fluctuations in quarterly revenue and profits.
Any unauthorized disclosure of such information could result in legal action, regulatory sanctions and reputational or financial harm. Risks Related to Our Business and Operations Due to the nature of our business, financial results could differ significantly from period to period, which may make it difficult for us to achieve steady earnings growth on a quarterly basis.
For additional information regarding operational risks with respect to our businesses, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operational Risk” below. 26 Risks Related to Legal or Regulatory Factors and Taxation Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses.
Risks Related to Legal or Regulatory Factors and Taxation Extensive regulation of our businesses limits our activities and results in ongoing exposure to the potential for significant penalties, including fines or limitations on our ability to conduct our businesses. The financial services industry is subject to extensive regulation.
In addition, many tax laws and regulations have been modified, or are otherwise under review, in the U.S. and in many other jurisdictions in which we and our clients operate. Actual and proposed changes to these laws and regulations may affect the level of M&A activity, including cross-border M&A activity.
In addition, many tax laws and regulations have been modified, or are otherwise under review, in the U.S. and in many other jurisdictions in which we and our clients operate.
For asset management businesses in general, there have been a number of highly publicized cases involving fraud or other misconduct by employees of asset management firms, as well as industry-wide regulatory inquiries.
Actual and proposed changes to these laws and regulations may affect the level of M&A activity, including cross-border M&A activity. 26 For the asset management businesses in general, there have been a number of highly publicized cases involving fraud or other misconduct by employees of asset management firms, as well as industry-wide regulatory inquiries.
Such events could lead us to experience operational challenges, and our inability to successfully recover could materially disrupt our businesses and cause material financial loss, regulatory actions, reputational harm or legal liability.
Such events could lead us to experience operational challenges, and our inability to successfully recover could materially disrupt our businesses and cause material financial loss, regulatory actions, reputational harm and legal liability. For additional information regarding operational risks with respect to our businesses, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operational Risk” below.
These systems and models are often designed and, with assistance from technology personnel, maintained by employees who are members of those investment teams. If any of the foregoing systems fail to operate properly or are disabled, including for reasons beyond our control, we could suffer financial loss, a disruption of our businesses, liability to clients, regulatory intervention or reputational damage.
If any of the foregoing systems fails to operate properly or is disabled, including for reasons beyond our control, we could suffer material financial loss, a disruption of our businesses, liability to clients, regulatory intervention and reputational damage.
Interim guidance on the application of the CAMT and the excise tax was issued on December 27, 31 2022, but several aspects of the Inflation Reduction Act remain uncertain and the Treasury regulations implementing its provisions are forthcoming.
Some guidance has been issued on the application of the alternative minimum book tax and the excise tax but several aspects of the Tax Cuts and Jobs Act and the Inflation Reduction Act remain uncertain and the Treasury regulations implementing the provisions are forthcoming.
Fluctuations in foreign currency exchange rates may also affect the levels of our AUM and our investment advisory fees. See “Fluctuations in foreign currency exchange rates could reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM” below.
See “Fluctuations in foreign currency exchange rates could reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM” below. 18 Consequences of geopolitical conditions, military conflicts, wars and acts of terrorism could adversely affect our business, financial condition and results of operations.
In the event that the clients are unable to repay their loans and we are unable to realize the collateral for sums that exceed the underlying amount of the loan, we may lose some or all of these amounts. 25 In addition, w e have and may continue to enter into joint ventures, partnerships and invest in entities in which we share ownership or management with unaffiliated third parties.
In the event that the clients are unable to repay their loans and we are unable to realize the collateral for sums that exceed the underlying amount of the loan, we may lose some or all of these amounts.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Square Footage Offices New York City 438,870 square feet of leased space Principal office located at 30 Rockefeller Plaza Paris 187,499 square feet of leased space Principal offices located at 175 Boulevard Haussmann and 25 Rue de Courcelles London 70,889 square feet of leased space Principal office located at 50 Stratton Street
Biggest changeLocation Offices New York City Principal office located at 30 Rockefeller Plaza Paris Principal offices located at 175 Boulevard Haussmann and 25 Rue de Courcelles London Principal office located at 50 Stratton Street
Item 2. Properties Lazard has offices located around the world. The following table lists the principal properties used for the Lazard organization as of December 31, 2022. As a general matter, one or both of our Financial Advisory and Asset Management segments (as well as our Corporate segment) uses the following properties.
Item 2. Properties Lazard has offices located around the world. The following table lists the principal properties used for the Lazard organization as of December 31, 2023. As a general matter, one or both of our Financial Advisory and Asset Management segments (as well as our Corporate segment) uses the following properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 36 Part II
Biggest changeMine Safety Disclosures Not applicable. 37 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 – October 31, 2022 Share Repurchase Program (1) 2,416,918 $ 32.91 2,416,918 $ 302.1 million Employee Transactions (2) - $ - November 1 – November 30, 2022 Share Repurchase Program (1) - $ - - $ 302.1 million Employee Transactions (2) 6,603 $ 35.66 December 1 – December 31, 2022 Share Repurchase Program (1) - $ - - $ 302.1 million Employee Transactions (2) 11,766 $ 36.06 Total Share Repurchase Program (1) 2,416,918 $ 32.91 2,416,918 $ 302.1 million Employee Transactions (2) 18,369 $ 35.92 (1) Since 2021 and through the year ended December 31, 2022, the Board of Directors of Lazard authorized the repurchase of common stock as set forth in the table below.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 – October 31, 2023 Share Repurchase Program (1) – $ – – $ 200.1 million Employee Transactions (2) 9,600 $ 30.43 November 1 – November 30, 2023 Share Repurchase Program (1) – $ – – $ 200.1 million Employee Transactions (2) 2,666 $ 27.65 December 1 – December 31, 2023 Share Repurchase Program (1) – $ – – $ 200.1 million Employee Transactions (2) 7,578 $ 31.53 Total Share Repurchase Program (1) – $ – – $ 200.1 million Employee Transactions (2) 19,844 $ 30.48 ______________________ (1) The Board of Directors of Lazard authorized the repurchase of common stock as set forth in the table below.
The graph assumes $100 was invested at the close of business on December 31, 2017 in each of our common stock, the S&P 500 Index and the S&P Financial Index. It also assumes that dividends were reinvested on the date of payment without payment of any commissions.
The graph assumes $100 was invested at the close of business on December 31, 2018 in each of our common stock, the S&P 500 Index and the S&P Financial Index. It also assumes that dividends were reinvested on the date of payment without payment of any commissions.
(2) Under the terms of the 2008 Plan and the 2018 Plan, upon the settlement of RSUs, PRSUs, deferred stock units (“DSUs”) and delivery of restricted stock, shares of common stock may be withheld by the Company to meet the minimum statutory tax withholding requirements.
(2) Under the terms of the 2018 Plan, upon the settlement of RSUs, PRSUs, deferred stock units (“DSUs”) and delivery of restricted stock, shares of common stock may be withheld by the Company to meet the minimum 38 statutory tax withholding requirements.
Share Repurchases in the Fourth Quarter of 2022 The following table sets forth information regarding Lazard’s purchases of its common stock on a monthly basis during the fourth quarter of 2022. Share repurchases are recorded on a trade date basis.
Share Repurchases in the Fourth Quarter of 2023 The following table sets forth information regarding Lazard’s purchases of its common stock on a monthly basis during the fourth quarter of 2023. Share repurchases are recorded on a trade date basis.
Equity Compensation Plan Information See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information.” Stock Performance The stock performance graph below compares the performance of an investment in our common stock, from December 31, 2017 through December 31, 2022, with that of the S&P 500 Index and the S&P Financial Index.
Equity Compensation Plan Information See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information.” Stock Performance The stock performance graph below compares the performance of an investment in our common stock, from December 31, 2018 through December 31, 2023, with that of the S&P 500 Index and the S&P Financial Index.
During the year ended December 31, 2022, the Company had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.
During the year ended December 31, 2023, Lazard had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on The New York Stock Exchange under the symbol “LAZ.” As of January 27, 2023, there were approximately 20 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on The New York Stock Exchange under the symbol “LAZ.” As of January 26, 2024, there were approximately 18 holders of record of our common stock.
Date Repurchase Authorization Expiration ($ in thousands) April 2021 $ 300,000 December 31, 2022 February 2022 $ 300,000 December 31, 2024 July 2022 $ 500,000 December 31, 2024 37 A significant portion of the Company’s purchases under the share repurchase program are used to offset a portion of the shares that have been or will be issued under Lazard Ltd’s 2008 Incentive Compensation Plan (the “2008 Plan”) and 2018 Incentive Compensation Plan, as amended (the “2018 Plan”).
Date Repurchase Authorization Expiration ($ in thousands) February 2022 $ 300,000 December 31, 2024 July 2022 $ 500,000 December 31, 2024 A significant portion of the Company’s purchases under the share repurchase program are used to offset a portion of the shares that have been or will be issued under the Company’s 2018 Incentive Compensation Plan, as amended (the “2018 Plan”).
The performance shown in the graph represents past performance and should not be considered an indication of future performance. Other Matters None. 38 Item 6. [R eserved] 39
The performance shown in the graph represents past performance and should not be considered an indication of future performance. Other Matters None. Item 6. [Reserved] 39
This does not include the number of shareholders that hold shares in “street-name” through banks or broker-dealers. On January 27, 2023, the last reported sales price for our common stock on the New York Stock Exchange was $40.89 per share.
This does not include the number of shareholders that hold shares in “street-name” through banks or broker-dealers. On January 26, 2024, the last reported sales price for our common stock on the New York Stock Exchange was $39.49 per share.
During the three month period ended December 31, 2022, the Company satisfied such obligations in lieu of issuing (i) 13,334 shares of common stock upon the settlement of 41,049 RSUs and (ii) 5,035 shares of common stock upon the delivery of 14,261 shares of restricted stock.
During the three month period ended December 31, 2023, the Company satisfied such obligations in lieu of issuing (i) 8,861 shares of common stock upon the settlement of 12,134 RSUs and (ii) 10,983 shares of common stock upon the delivery of 24,363 shares of restricted stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSummary of Cash Flows: Year Ended December 31, 2022 2021 2020 ($ in millions) Cash Provided By (Used In): Operating activities: Net income $ 392 $ 543 $ 403 Adjustments to reconcile net income to net cash provided by operating activities (a) 551 623 495 Other operating activities (b) (110 ) (300 ) (322 ) Net cash provided by operating activities 833 866 576 Investing activities (56 ) (39 ) (63 ) Financing activities (c) (1,382 ) 196 (547 ) Effect of exchange rate changes (186 ) (162 ) 147 Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash (791 ) 861 113 Cash and Cash Equivalents and Restricted Cash (d): Beginning of Period 3,430 2,569 2,456 End of Period $ 2,639 $ 3,430 $ 2,569 (a) Consists of the following: Year Ended December 31, 2022 2021 2020 ($ in millions) Depreciation and amortization of property $ 42 $ 38 $ 35 Noncash lease expense 61 74 65 Currency translation adjustment reclassification - 24 - Amortization of deferred expenses and share-based incentive compensation 406 394 347 Deferred tax provision 43 91 47 Amortization of intangible assets related to acquisitions - - 2 Provision (benefit) pursuant to tax receivable agreement (1 ) 2 (1 ) Total $ 551 $ 623 $ 495 (b) Includes net changes in operating assets and liabilities. 56 (c) Consists primarily of purchases of shares of common stock, tax withholdings related to the settlement of vested RSUs, vested RSAs and vested PRSUs, common stock dividends, changes in customer deposits, distributions to noncontrolling interest holders, and in 2021, contributions from redeemable noncontrolling interests and payments of underwriting fees and other offering costs associated with the LGAC IPO.
Biggest changeSee the Consolidated Financial Statements—Consolidated Statements of Cash Flows for further detail. 55 Summary of Cash Flows: Year Ended December 31, 2023 2022 2021 ($ in millions) Cash Provided By (Used In): Operating activities: Net income (loss) $ (57) $ 392 $ 543 Adjustments to reconcile net income to net cash provided by operating activities (a) 463 551 623 Other operating activities (b) (241) (110) (300) Net cash provided by (used in) operating activities 165 833 866 Investing activities (38) (56) (39) Financing activities (c) (1,571) (1,382) 196 Effect of exchange rate changes 30 (186) (162) Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash (1,414) (791) 861 Cash and Cash Equivalents and Restricted Cash (d): Beginning of Period 2,639 3,430 2,569 End of Period $ 1,225 $ 2,639 $ 3,430 ________________________ (a) Consists primarily of amortization of deferred expenses and share-based incentive compensation, noncash lease expenses, depreciation and amortization of property and deferred tax provision (benefit).
Amended and Restated Tax Receivable Agreement The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “TRA”), between Lazard and LTBP Trust (the “Trust”) provides for payments by our subsidiaries to the owners of the Trust, who include certain of our executive officers.
Tax Receivable Agreement The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “TRA”), between Lazard and LTBP Trust (the “Trust”) provides for payments by our subsidiaries to the owners of the Trust, who include certain of our executive officers.
Consolidation The consolidated financial statements include entities in which Lazard has a controlling interest. Lazard determines whether it has a controlling interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”) under U.S. GAAP. • Voting Interest Entities.
Consolidation The consolidated financial statements include entities in which Lazard has a controlling financial interest. Lazard determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”) or a variable interest entity (“VIE”) under U.S. GAAP. • Voting Interest Entities.
Our principal sources of revenue are derived from activities in the following business segments: • Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, restructuring and capital solutions, sovereign advisory, geopolitical advisory, capital raising and placement, and other strategic advisory matters, and • Asset Management, which offers a broad range of global investment solutions and investment and wealth management services in equity and fixed income strategies, asset allocation strategies, alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries and private clients.
Our principal sources of revenue are derived from activities in the following business segments: • Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services regarding strategic and mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, restructuring and liability management, sovereign advisory, geopolitical advisory and other strategic advisory matters and capital raising and placement, and • Asset Management, which offers a broad range of global investment solutions and investment and wealth management services in equity and fixed income strategies, asset allocation strategies, alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries and private clients.
Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance.
Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons, including 43 investment performance, changes in prevailing interest rates and financial market performance.
In addition, some of our tax-paying entities have recorded a valuation allowance on substantially all of their deferred tax assets due to the combined effect of operating losses in certain subsidiaries of these entities as well as foreign taxes that together substantially offset any U.S. tax liability.
In addition, some of our tax-paying entities have recorded a valuation allowance on 60 substantially all of their deferred tax assets due to the combined effect of operating losses in certain subsidiaries of these entities as well as foreign taxes that together substantially offset any U.S. tax liability.
Overall, we continue to focus on the development of our business, including the generation of stable revenue growth, earnings growth and shareholder returns, the evaluation of potential growth opportunities, the investment in new technology to support the development of existing and new business opportunities, the prudent management of our costs and expenses, the efficient use of our assets and the return of capital to our shareholders.
Overall, we continue to focus on the development of our business, including the generation of revenue growth, earnings growth and shareholder returns, the evaluation of potential growth opportunities, the investment in new technology to support the development of existing and new business opportunities, the prudent management of our costs and expenses, the efficient use of our assets and the return of capital to our shareholders.
Lazard Group’s obligations under the Amended and Restated Credit Agreement may be accelerated upon customary events of default, including non-payment of principal or interest, breaches of covenants, cross-defaults to other material debt, a change in control and specified bankruptcy events .
Lazard Group’s obligations under the Second Amended and Restated Credit Agreement may be accelerated upon customary events of default, including non-payment of principal or interest, breaches of covenants, cross-defaults to other material debt, a change in control and specified bankruptcy events.
VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance itself independently and (ii) the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities.
VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance itself independently and (ii) the equity holders have the obligation to absorb 61 losses, the right to receive residual returns and the right to make decisions about the entity’s activities.
Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of assets under management (“AUM”).
Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, sale, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of assets under management (“AUM”).
Corporate net revenue also can fluctuate due to changes in the fair value of debt and equity securities, as well as due to changes in interest and currency exchange rates and in the levels of cash, investments and indebtedness.
Corporate net revenue can fluctuate due to changes in the fair value of debt and equity securities, as well as due to changes in interest and currency exchange rates and the levels of cash, investments and indebtedness.
To the extent material, we consolidate seed and LFI investment entities in which we own a controlling interest, and we would deconsolidate any such entity when we no longer have a controlling interest in such entity.
To the extent material, we consolidate seed and LFI investment entities in which we own a controlling financial interest, and we would deconsolidate any such entity when we no longer have a controlling financial interest in such entity.
Certain market data with respect to our Financial Advisory and Asset Management businesses is included below. 41 Financial Advisory As reflected in the following table, which sets forth global M&A industry statistics, the value and number of all completed transactions, including the subset of completed transactions involving values greater than $500 million, decreased in 2022 as compared to 2021.
Certain market data with respect to our Financial Advisory and Asset Management businesses is included below. 41 Financial Advisory As reflected in the following table, which sets forth global M&A industry statistics, the value and number of all completed transactions, including the subset of completed transactions involving values greater than $500 million, decreased in 2023 as compared to 2022.
The geographical distribution of Financial Advisory net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory net revenue, which are located in the Americas (U.S., Canada, and Latin America), EMEA (primarily in the U.K., France, Germany, Italy and Spain) and the Asia Pacific region and therefore may not be reflective of the geography in which the clients are located.
The geographical distribution of Financial Advisory net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory net revenue, which are located in the Americas (U.S. and 50 Latin America), EMEA (primarily in the U.K., France, Germany, Italy and Spain) and the Asia Pacific region and therefore may not be reflective of the geography in which the clients are located.
Lazard’s Asset Management segment principally includes LAM, LFG and Edgewater. Asset Management net revenue is derived from fees for investment management and advisory services provided to clients.
Lazard’s Asset Management segment principally includes LAM, LFG, LFB and Edgewater. Asset Management net revenue is derived from fees for investment management and advisory services provided to clients.
As a result, the Company recognizes incentive fees earned on our private equity funds when it is probable that a clawback will not occur.
As a result, the Company recognizes incentive fees earned on our private equity funds only when it is probable that a clawback will not occur.
A detailed review of our operating results for the year ended December 31, 2021 compared to the year ended December 31, 2020 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Results”.
A detailed review of our operating results for the year ended December 31, 2022 compared to the year ended December 31, 2021 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Results”.
Government or agency money market funds), (ii) in short-term interest bearing and non-interest bearing accounts at a number of leading banks throughout the world, and (iii) in short-term certificates of deposit from such banks. Cash and cash equivalents are constantly monitored.
Government or agency money market funds), (ii) in short-term interest bearing and non-interest bearing accounts at a number of leading banks throughout the world, and (iii) in short-term certificates of deposit from such banks. Cash and cash equivalents are continuously monitored.
While we have implemented policies and initiatives that we believe will assist us in maintaining ratios within this range, there can be no guarantee that we will continue to maintain such ratios, or that our policies or initiatives will not change, in the future.
While we have implemented policies and initiatives that we believe will assist us in maintaining ratios within this range, there can be no guarantee that we will be able to maintain such ratios, or that our policies or initiatives will not change, in the future.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with Lazard Ltd’s consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K (this “Form 10-K”). This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with Lazard’s consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K (this “Form 10-K”). This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties.
The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $ 3 . 7 million and $ 3 . 0 million in the carrying value of such investments as of December 31, 2022 and 2021 , respectively.
The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $3.0 million and $3.7 million in the carrying value of such investments as of December 31, 2023 and 2022, respectively.
For additional information regarding risks associated with our investments, see Item 1A, “Risk Factors—Other Business Risks—Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios.” Risks Related to Receivables We maintain an allowance for credit losses to provide coverage for expected losses from our receivables.
For additional information regarding risks associated with our investments, see Item 1A, “Risk Factors—Other Business Risks—Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios”. Risks Related to Receivables We maintain an allowance for credit losses to provide coverage for expected losses from our receivables.
Lazard bases these estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, including judgments regarding the carrying values of assets and liabilities, that are not readily apparent from other sources. Actual results may differ from these estimates.
Lazard bases these estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, including judgments regarding the carrying values of assets and liabilities, that are not readily apparent from other sources.
With respect to announced M&A transactions, the value and number of all transactions, including the subset of announced transactions involving values greater than $500 million, decreased in 2022 as compared to 2021.
With respect to announced M&A transactions, the value and number of all transactions, including the subset of announced transactions involving values greater than $500 million, decreased in 2023 as compared to 2022.
Such liabilities are evaluate d periodically as new information becomes available and any changes in the amounts of such liabilities are recorded as adjustments to “income tax expense.” Liabilities for unrecognized tax benefits involve significant judgment and the ultimate resolution of such matters may be materially different from our estimates.
Such liabilities are evaluated periodically as new information becomes available and any changes in the amounts of such liabilities are recorded as adjustments to “income tax expense.” Liabilities for unrecognized tax benefits involve significant judgment and the ultimate resolution of such matters may be materially different from our estimates.
( b ) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and bad debt expense relating to fees that are deemed uncollectible for which an equal amount is excluded for purposes of determining adjusted non-compensation expense.
(b) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and bad debt expenses relating to fees and other receivables that are deemed uncollectible for which an equal amount is excluded for purposes of determining adjusted non-compensation expense.
At December 31, 2022, the Company was in compliance with all of these provisions. We may, to the extent required and subject to restrictions contained in our financing arrangements, use other financing sources, which may cause us to be subject to additional restrictions or covenants. See Note 12 of Notes to Consolidated Financial Statements for additional information regarding senior debt.
At December 31, 2023, the Company was in compliance with all of these provisions. We may, to the extent required and subject to restrictions contained in our financing arrangements, use other financing sources, which may cause us to be subject to additional restrictions or covenants. See Note 13 of Notes to Consolidated Financial Statements for additional information regarding senior debt.
During the year ended December 31, 2022, Lazard Ltd had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.
During the year ended December 31, 2023, Lazard had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.
At December 31, 2022 and 2021 , the Company’s exposure to changes in fair value of such investments was approximately $ 37 million and $ 30 million, respectively.
At December 31, 2023 and 2022, the Company’s exposure to changes in fair value of such investments was approximately $30 million and $37 million, respectively.
We determine the adequacy of the allowance under the current expected credit losses (“CECL”) guidance by (i) applying a bad debt charge-off rate based on historical charge-off experience; (ii) estimating the probability of loss based on our analysis of the client’s creditworthiness and specifically reserve against exposures where we determine the receivables are uncollectible, which may include situations where a fee is in dispute or litigation has 60 commenced; and (iii) performing qualitative assessments to monitor economic risks that may require additional adjustments .
We determine the adequacy of the allowance under the current expected credit losses (“CECL”) guidance by (i) applying a bad debt charge-off rate based on historical charge-off experience; (ii) estimating the probability of loss based on our analysis of the client’s creditworthiness resulting in specific reserves against exposures where we determine the receivables are uncollectible, which may include situations where a fee is in dispute or litigation has commenced; and (iii) performing qualitative assessments to monitor economic risks that may require additional adjustments.
See Item 1A, “Risk Factors” and Note 17 of Notes to Consolidated Financial Statements for additional information related to income taxes.
See Item 1A, “Risk Factors” and Note 19 of Notes to Consolidated Financial Statements for additional information related to income taxes.
Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services and other expenses.
Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services, amortization and other acquisition-related costs and other expenses.
The majority of our investment advisory contracts are generally terminable at any time or on notice of 30 days or less.
Our investment advisory contracts are generally terminable at any time or on notice of 30 days or less.
( b ) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and bad debt expense relating to fees that are deemed uncollectible for which an equal amount is included for purposes of determining operating revenue.
(b) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and bad debt expenses relating to fees and other receivables that are deemed uncollectible for which an equal amount is included for purposes of determining operating revenue.
A review of our operating results for the year ended December 31, 2022 compared to our operating results for the year ended December 31, 2021 appears below.
A review of our operating results for the year ended December 31, 2023 compared to our operating results for the year ended December 31, 2022 appears below.
Based on account balances as of December 31, 2022, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $12 million in the event interest rates were to increase by 1% and decrease by approximately $12 million if rates were to decrease by 1%.
Based on account balances as of December 31, 2023, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $10 million in the event interest rates were to increase by 1% and decrease by approximately $10 million if rates were to decrease by 1%.
Dollar would result in a decrease of approximately $3.0 million and $2.4 million in the carrying value of such investments as of December 31, 2022 and 2021, respectively, including the effect of the hedging transactions. 65 Private Equity—The Company invests in private equity primarily as a part of its co-investment activities and in connection with certain legacy businesses.
Dollar would result in a net decrease of approximately $2.0 million and $3.0 million in the carrying value of such investments as of December 31, 2023 and 2022, respectively, including the effect of the hedging transactions. Private Equity—The Company invests in private equity primarily as a part of its co-investment activities and in connection with certain legacy businesses.
Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under the Lazard Ltd 2018 Incentive Compensation Plan, as amended (the “2018 Plan”) and the Lazard Ltd 2008 Incentive Compensation Plan (the “2008 Plan”) and (b) LFI and other similar deferred compensation arrangements (see Note 15 of Notes to Consolidated Financial Statements), (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments.
Our compensation and benefits expense includes (i) salaries and benefits, (ii) amortization of the relevant portion of previously granted deferred incentive compensation awards, including (a) share-based incentive compensation under Lazard’s 2018 Incentive Compensation Plan, as amended (the “2018 Plan”) and (b) LFI and other similar deferred compensation arrangements (see Note 16 of Notes to Consolidated Financial Statements), (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments.
Corporate segment net revenue consists primarily of investment gains and losses on the Company’s “seed investments” related to our Asset Management business and principal investments in private equity funds, net of hedging activities, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”) and interest income and interest expense.
Corporate segment net revenue consists primarily of investment gains and losses on the Company’s investments to seed strategies in our Asset Management business, net of hedging activities, and principal investments in private equity funds, as well as gains and losses on investments held in connection with Lazard Fund Interests (“LFI”) and interest income and interest expense.
Interest Rate/Credit Spread Risk—At December 31, 2022 and 2021, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was $53 million and $351 million, respectively.
Interest Rate and Credit Spread Risk—At December 31, 2023 and 2022, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was $18 million and $53 million, respectively.
Foreign Exchange Rate Risk—At December 31, 2022 and 2021, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities and, at December 31, 2022, private equity investments, was $63 million and $68 million, respectively.
Foreign Exchange Rate Risk—At December 31, 2023 and 2022, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities and, at December 31, 2023, private equity investments, was $69 million and $63 million, respectively.
In addition, we continue to invest in our Financial Advisory business by selectively hiring talented senior professionals in an effort to enhance our capabilities and sector expertise in M&A, capital structure and public and private capital markets. • Asset Management —Given our diversified investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry despite uncertain global macroeconomic conditions.
In addition, we continue to invest in our Financial Advisory business by selectively hiring talented senior professionals in an effort to enhance our capabilities and sector expertise in M&A, capital structure, restructuring, and public and private capital markets. • Asset Management —Given our diversified, actively managed investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry.
Our goal is to maintain a ratio of awarded compensation and benefits expense to operating revenue and a ratio of adjusted compensation and benefits expense to operating revenue over the cycle in the mid- to high-50s percentage range, while targeting a consistent deferral policy.
Our goal remains to maintain a ratio of adjusted compensation and benefits expense to operating revenue over the cycle in the mid- to high-50s percentage range, while 44 targeting a consistent deferral policy.
The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately $2.0 million and $0.3 million in the carrying value of such investments as of December 31, 2022 and 2021, respectively, including the effect of the hedging transactions.
The Company estimates that a hypothetical 10% adverse change in market prices would result in a net increase of approximately $0.2 million as of December 31, 2023 and a net decrease of approximately $2.0 million as of December 31, 2022 in the carrying value of such investments, including the effect of the hedging transactions.
Year Ended December 31, 2022 2021 2020 Americas 59 % 62 % 67 % EMEA 40 37 31 Asia Pacific 1 1 2 Total 100 % 100 % 100 % The Company’s managing directors and many of its professionals have significant experience, and many of them are able to use this experience to advise on M&A, restructuring and other strategic advisory matters, depending on clients’ needs.
Year Ended December 31, 2023 2022 2021 Americas 55 % 59 % 62 % EMEA 44 40 37 Asia Pacific 1 1 1 Total 100 % 100 % 100 % The Company’s managing directors and many of its professionals have significant experience, and many of them are able to use this experience to advise on a combination of M&A, restructuring and other strategic advisory matters, depending on clients’ needs.
Outstanding as of December 31, 2022 December 31, 2021 Senior Debt Maturity Date Principal Unamortized Debt Costs Carrying Value Principal Unamortized Debt Costs Carrying Value ($ in millions) Lazard Group 2025 Senior Notes 2025 $ 400.0 $ 1.0 $ 399.0 $ 400.0 $ 1.5 $ 398.5 Lazard Group 2027 Senior Notes 2027 300.0 1.6 298.4 300.0 2.0 298.0 Lazard Group 2028 Senior Notes 2028 500.0 4.9 495.1 500.0 5.7 494.3 Lazard Group 2029 Senior Notes 2029 500.0 4.8 495.2 500.0 5.6 494.4 $ 1,700.0 $ 12.3 $ 1,687.7 $ 1,700.0 $ 14.8 $ 1,685.2 58 The indenture and supplemental indentures relating to Lazard Group’s senior notes contain certain covenants (none of which relate to financial condition), events of default and other customary provisions.
Outstanding as of December 31, 2023 December 31, 2022 Senior Debt Maturity Principal Unamortized Debt Costs Carrying Value Principal Unamortized Debt Costs Carrying Value ($ in millions) Lazard Group 2025 Senior Notes 2025 $ 400.0 $ 0.5 $ 399.5 $ 400.0 $ 1.0 $ 399.0 Lazard Group 2027 Senior Notes 2027 300.0 1.3 298.7 300.0 1.6 298.4 Lazard Group 2028 Senior Notes 2028 500.0 4.0 496.0 500.0 4.9 495.1 Lazard Group 2029 Senior Notes 2029 500.0 4.0 496.0 500.0 4.8 495.2 $ 1,700.0 $ 9.8 $ 1,690.2 $ 1,700.0 $ 12.3 $ 1,687.7 The indenture and supplemental indentures relating to Lazard Group’s senior notes contain certain covenants (none of which relate to financial condition), events of default and other customary provisions.
Borrowings under the Amended and Restated Credit Agreement generally will bear interest at LIBOR plus an applicable margin for specific interest periods determined based on Lazard Group’s highest credit rating from an internationally recognized credit agency .
Borrowings under the Second Amended and Restated Credit Agreement generally will bear interest at adjusted term SOFR plus an applicable margin for specific interest periods determined based on Lazard Group’s highest credit rating from an internationally recognized credit agency.
As of December 31, 2022, the Company’s cash and cash equivalents totaled approximately $1,235 million. Substantially all of the Company’s cash and cash equivalents were invested in (i) highly liquid institutional money market funds (a significant majority of which were invested solely in U.S.
As of December 31, 2023, the Company’s cash and cash equivalents totaled approximately $971 million. Substantially all of the Company’s cash and cash equivalents were invested in (i) highly liquid institutional money market funds (a significant majority of which were invested solely in U.S.
The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a decrease of approximately $0.1 million and $0.6 million in the carrying value of such investments as of December 31, 2022 and 2021, respectively, including the effect of the hedging transactions.
The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a net increase of approximately $0.05 million as of December 31, 2023 and a net decrease of approximately $0.1 million as of December 31, 2022 in the carrying value of such investments, including the effect of the hedging transactions.
As of December 31, 2022, approximately 85% of our AUM was managed on behalf of institutional clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors, compared to 87% as of December 31, 2021.
As of both December 31, 2023 and 2022, approximately 85% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors.
See Notes 14 and 22 of Notes to Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs. Consolidated Results of Operations Lazard’s consolidated financial statements are presented in U.S. Dollars.
See Notes 15 45 and 24 of Notes to Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs. Consolidated Results of Operations Lazard’s consolidated financial statements are presented in U.S. Dollars.
As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 75% and 25% of total receivables, respectively. At December 31, 2021, total receivables amounted to $806 million, net of an allowance for credit losses of $34 million.
At December 31, 2022, total receivables amounted to $653 million, net of an allowance for credit losses of $18 million. As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 75% and 25% of total receivables, respectively.
Percentage Changes December 31, 2022 vs. 2021 2021 vs. 2020 MSCI World Index (18 %) 22 % Euro Stoxx (9 %) 24 % MSCI Emerging Market (20 %) (3 %) S&P 500 (18 %) 29 % 42 The fees that we receive for providing investment management and advisory services are primarily driven by the level of AUM and the nature of the AUM product mix.
Percentage Changes December 31, 2023 vs 2022 2022 vs 2021 MSCI World Index 24 % (18 %) Euro Stoxx 23 % (9 %) MSCI Emerging Market 10 % (20 %) S&P 500 26 % (18 %) The fees that we receive for providing investment management and advisory services are primarily driven by the level of AUM and the nature of the AUM product mix.
Stockholders’ Equity At December 31, 2022, total stockholders’ equity was $675 million, as compared to $1,078 million and $999 million at December 31, 2021 and 2020, respectively, including $556 million, $975 million and $912 million attributable to Lazard Ltd on the respective dates.
Stockholders’ Equity At December 31, 2023, total stockholders’ equity was $482 million, as compared to $675 million and $1,078 million at December 31, 2022 and 2021, respectively, including $424 million, $556 million and $975 million attributable to Lazard Ltd on the respective dates.
Global restructuring activity during 2022, as measured by the number of corporate defaults, increased as compared to 2021. The number of defaulting issuers was 90 in 2022, according to Moody’s Investors Service, Inc., as compared to 55 in 2021.
Global restructuring activity during 2023, as measured by the number of corporate defaults, increased as compared to 2022. The number of defaulting issuers was 159 in 2023, according to Moody’s Investors Service, Inc., as compared to 157 in 2022.
Changes in the fair value of the derivative liabilities are equally offset by the changes in the fair value of investments which are expected to be delivered upon settlement of LFI 66 awards. Derivative liabilities relating to LFI amounted to $ 3 26 million and $ 3 59 million at December 31, 2022 and 2021 , respectively.
Changes in the fair value of the derivative liabilities are equally offset by the changes in the fair value of investments which are expected to be delivered upon settlement of LFI awards. Derivative liabilities relating to LFI amounted to $365 million and $326 million at December 31, 2023 and 2022, respectively.
See Note 6 of Notes to Consolidated Financial Statements for additional information on the measurement of the fair value of investments. Lazard is subject to market and credit risk on investments held.
See Note 7 of Notes to Consolidated Financial Statements for additional information on the measurement of the fair value of investments. Lazard is subject to market and other risks on investments held.
Liquidity is also affected by the level of deposits and other customer payables, principally at LFB. To the extent that such deposits and other customer payables rise or fall, this has a corresponding impact on liquidity held at LFB, with the majority of such amounts generally being recorded in “deposits with banks and short-term investments”.
To the extent that such deposits rise or fall, this has a corresponding impact on liquidity held at LFB, with the majority of such amounts generally being recorded in “deposits with banks and short-term investments”.
On February 1, 2023, the Board of Directors of Lazard declared a quarterly dividend of $0.50 per share on our common stock. The dividend is payable on February 24, 2023, to stockholders of record on February 13, 2023. See Notes 14 and 15 of Notes to Consolidated Financial Statements for additional information regarding Lazard’s stockholders’ equity and incentive plans, respectively.
On January 31, 2024, the Board of Directors of Lazard declared a quarterly dividend of $0.50 per share on our common stock. The dividend is payable on February 23, 2024, to stockholders of record on February 12, 2024. See Notes 15 and 16 of Notes to Consolidated Financial Statements for additional information regarding Lazard’s stockholders’ equity and incentive plans, respectively.
As long as the lenders’ commitments remain in effect, any loan pursuant to the Amended and Restated Credit Agreement remains outstanding and unpaid or any other amount is due to the lending bank group, the Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group not permit (i) its Consolidated Leverage Ratio (as defined in the Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be greater than 3.25 to 1.00, provided that the Consolidated Leverage Ratio may be greater than 3.25 to 1.00 for two (consecutive or nonconsecutive) quarters so long as it is not greater than 3.50 to 1.00 on the last day of any such quarter, or (ii) its Consolidated Interest Coverage Ratio (as defined in the Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be less than 3.00 to 1.00.
The Second Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group not permit (i) its Consolidated Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be greater than 3.25 to 1.00, provided that the Consolidated Leverage Ratio may be greater than 3.25 to 1.00 for four (consecutive or nonconsecutive) quarters so long as it is not greater than 3.50 to 1.00 on the last day of any such quarter, or (ii) its Consolidated Interest Coverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be less than 3.00 to 1.00.
Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products. 43 The Company earns performance-based incentive fees on various investment products, including traditional products and alternative investment funds, such as hedge funds and private equity funds.
Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.
Seed investments held in entities in which the Company maintained a controlling interest were $112 million in thirteen entities as of December 31, 2022, as compared to $74 million in ten entities as of December 31, 2021.
Seed investments held in entities in which the Company maintained a controlling financial interest were $114 million in eleven entities as of December 31, 2023, as compared to $112 million in thirteen entities as of December 31, 2022.
Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally, lower operating revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal; however, in future periods we may benefit from pressure on compensation costs within the financial services industry.
Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally, lower operating revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal.
See “—Risk Management—Risks Related to Derivatives” for risk management information relating to derivatives. Risk sensitivities include the effects of economic hedging. For equity market price risk, investment portfolios and their corresponding hedges are beta-adjusted to the All-Country World equity index.
See “—Risk Management—Risks Related to Derivatives” for risk management information relating to derivatives. Risk sensitivities include the effects of economic hedging. For equity market price risk, investment portfolios and their corresponding hedges are beta-adjusted to the All-Country World equity index. Interest rate and credit spread risk and foreign exchange rate risks are hedged using relevant benchmark indices.
In addition, we record selected other activities in our Corporate segment, including management of cash, investments, deferred tax assets, outstanding indebtedness, certain contingent obligations and certain assets and liabilities associated with (i) Lazard Group’s Paris-based subsidiary, Lazard Frères Banque SA (“LFB”), and (ii) a special purpose acquisition company sponsored by an affiliate of the Company, Lazard Growth Acquisition Corp.
In addition, we record selected other activities in our Corporate segment, including management of cash, investments, deferred tax assets, outstanding indebtedness, certain contingent obligations and certain assets and liabilities associated with a special purpose acquisition company that was sponsored by an affiliate of the Company, Lazard Growth Acquisition Corp. I (“LGAC”).
Year Ended December 31, 2022 2021 2020 Americas 48 % 48 % 52 % EMEA 41 42 37 Asia Pacific 11 10 11 Total 100 % 100 % 100 % Asset Management Results of Operations Year Ended December 31, 2022 versus December 31, 2021 Asset Management net revenue decreased $220 million, or 15%, as compared to 2021.
Year Ended December 31, 2023 2022 2021 Americas 42 % 48 % 48 % EMEA 46 41 42 Asia Pacific 12 11 10 Total 100 % 100 % 100 % Asset Management Results of Operations Year Ended December 31, 2023 versus December 31, 2022 Asset Management net revenue decreased $53 million, or 4%, as compared to 2022.
See also Notes 13, 15, 16, 17 and 19 of Notes to Consolidated Financial Statements regarding information in connection with commitments, incentive plans, employee benefit plans, income taxes and tax receivable agreement obligations, respectively. Financing Activities The table below sets forth our corporate indebtedness as of December 31, 2022 and 2021.
See also Notes 14, 16, 17, 19, 21 and 22 of Notes to Consolidated Financial Statements regarding information in connection with commitments, incentive plans, employee benefit plans, income taxes, tax receivable agreement obligations and regulatory requirements, respectively. 57 Senior Debt The table below sets forth our corporate indebtedness as of December 31, 2023 and 2022.
Risks Related to Derivatives Lazard enters into forward foreign currency exchange contracts and interest rate swaps to hedge exposures to currency exchange rates and interest rates and uses total return swap contracts on various equity and debt indices to hedge a portion of its market exposure with respect to certain seed investments related to our Asset Management business.
Credit Concentrations The Company monitors its exposures to individual counterparties and diversifies where appropriate to reduce the exposure to concentrations of credit. 64 Risks Related to Derivatives Lazard enters into forward foreign currency exchange contracts and interest rate swaps to hedge exposures to currency exchange rates and interest rates and uses total return swap contracts on various equity and debt indices to hedge a portion of its market exposure with respect to certain investments that seed strategies in our Asset Management business.
Business Summary Lazard, one of the world’s preeminent financial advisory and asset management firms, operates from 43 cities across 26 countries in North and South America, Europe, Asia and Australia.
Business Summary Lazard, one of the world’s preeminent financial advisory and asset management firms, operates in North and South America, Europe, the Middle East, Asia and Australia.
Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers. 52 The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies”): As of December 31, 2022 2021 2020 ($ in millions) AUM by Asset Class: Equity: Emerging Markets $ 21,557 $ 31,227 $ 33,254 Global 46,861 59,516 56,246 Local 47,504 56,310 48,672 Multi-Regional 51,473 73,953 71,560 Total Equity 167,395 221,006 209,732 Fixed Income: Emerging Markets 8,944 12,231 13,651 Global 11,029 14,410 11,962 Local 5,352 6,022 5,600 Multi-Regional 18,061 13,623 12,571 Total Fixed Income 43,386 46,286 43,784 Alternative Investments 3,812 4,203 2,748 Private Equity 1,038 1,290 1,420 Cash Management 494 954 958 Total AUM $ 216,125 $ 273,739 $ 258,642 Total AUM at December 31, 2022 was $216 billion, a decrease of $58 billion, or 21%, as compared to total AUM of $274 billion at December 31, 2021 due to market and foreign exchange depreciation and net outflows.
Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers. 51 The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies”): As of December 31, 2023 2022 2021 ($ in millions) AUM by Asset Class: Equity: Emerging Markets $ 25,288 $ 21,557 $ 31,227 Global 53,528 46,861 59,516 Local 52,208 47,504 56,310 Multi-Regional 59,114 51,473 73,953 Total Equity 190,138 167,395 221,006 Fixed Income: Emerging Markets 9,525 8,944 12,231 Global 10,762 11,029 14,410 Local 6,080 5,352 6,022 Multi-Regional 21,740 18,061 13,623 Total Fixed Income 48,107 43,386 46,286 Alternative Investments 3,330 3,812 4,203 Other Alternative Investments 2,799 – – Private Equity 1,623 1,038 1,290 Cash Management 654 494 954 Total AUM $ 246,651 $ 216,125 $ 273,739 Total AUM at December 31, 2023 was $247 billion, an increase of $31 billion, or 14%, as compared to total AUM of $216 billion at December 31, 2022 due to market and foreign exchange appreciation, partially offset by net outflows.
As of December 31, 2022, approximately 15% of our AUM was managed on behalf of individual client relationships, which was principally with family offices and individuals, compared to approximately 13% as of December 31, 2021. As of both December 31, 2022 and 2021, AUM with foreign currency exposure represented approximately 65% of our total AUM.
As of both December 31, 2023 and 2022, approximately 15% of our AUM was managed on behalf of individual client relationships. As of December 31, 2023, AUM with foreign currency exposure represented approximately 64% of our total AUM as compared to 65% at December 31, 2022.
Our majority ownership in seed investment entities represents a controlling interest, except when we are the general partner in such entities and the third-party investors have the right to replace the general partner.
Generally, when the Company initially invests to seed an investment entity, the Company is the majority owner of the entity. Our majority ownership in seed investment entities represents a controlling financial interest, except when we are the general partner in such entities and the third-party investors have the right to replace the general partner.
The following is a description of Lazard’s critical accounting estimates and judgments used in the preparation of its consolidated financial statements. Revenue Recognition Lazard generates substantially all of its revenue from providing Financial Advisory and Asset Management services to clients. Lazard recognizes revenue in accordance with the criteria in Note 2 of Notes to Consolidated Financial Statements.
Actual results may differ from these estimates. 59 The following is a description of Lazard’s critical accounting estimates and judgments used in the preparation of its consolidated financial statements. Revenue Recognition Lazard generates substantially all of its revenue from providing Financial Advisory and Asset Management services to clients.
Year Ended December 31, 2022 2021 2020 ($ in thousands) Earnings From Operations: Operating revenue $ 2,769,058 $ 3,138,897 $ 2,523,540 Deduct: Adjusted compensation and benefits expense (1,656,838 ) (1,836,227 ) (1,502,123 ) Adjusted non-compensation expense (518,173 ) (471,947 ) (431,898 ) Earnings from operations $ 594,047 $ 830,723 $ 589,519 Earnings from operations, as a % of operating revenue 21.5 % 26.5 % 23.4 % Headcount information is set forth below: As of December 31, 2022 2021 2020 Headcount: Managing Directors: Financial Advisory (a) 212 179 171 Asset Management 120 110 105 Corporate 25 22 21 Total Managing Directors 357 311 297 Other Business Segment Professionals and Support Staff: Financial Advisory (a) 1,463 1,349 1,384 Asset Management 1,105 1,088 1,012 Corporate 477 431 413 Total 3,402 3,179 3,106 49 (a) Financial Advisory headcount reflects that, in addition to customary year-end changes, 20 employees were reclassified in the first quarter of 2022 from professionals to managing directors due to a consolidation of the Lazard Middle Market LLC broker-dealer license.
Year Ended December 31, 2023 2022 2021 ($ in thousands) Earnings From Operations (a): Operating revenue $ 2,439,619 $ 2,769,058 $ 3,138,897 Deduct: Adjusted compensation and benefits expense (1,702,537) (1,656,838) (1,836,227) Adjusted non-compensation expense (571,504) (518,173) (471,947) Earnings from operations $ 165,578 $ 594,047 $ 830,723 Earnings from operations, as a % of operating revenue 6.8 % 21.5 % 26.5 % _________________ (a) Earnings from operations is a non-GAAP measure. 48 Headcount information is set forth below: As of December 31, 2023 2022 2021 Headcount: Managing Directors: Financial Advisory (a) 210 212 179 Asset Management 114 120 110 Corporate 26 25 22 Total Managing Directors 350 357 311 Other Business Segment Professionals and Support Staff: Financial Advisory (a) 1,393 1,463 1,349 Asset Management 1,107 1,105 1,088 Corporate 441 477 431 Total 3,291 3,402 3,179 ________________________ (a) Financial Advisory headcount reflects that, in addition to customary year-end changes, 20 employees were reclassified in the first quarter of 2022 from professionals to managing directors in connection with a consolidation of the Lazard Middle Market LLC broker-dealer license.
Purchases with respect to such program are set forth in the table below: Year Ended December 31: Number of Shares Average Price Per Share 2020 2,912,035 $ 32.70 2021 9,124,295 $ 44.51 2022 19,666,798 $ 35.17 59 As of December 31, 2022, a total of $302 million of share repurchase authorization remained available under Lazard Ltd’s share repurchase program, which authorization will expire on December 31, 2024.
Purchases with respect to such program are set forth in the table below: Year Ended December 31: Number of Shares Purchased Average Price Per Share 2021 9,124,295 $ 44.51 2022 19,666,798 $ 35.17 2023 2,782,662 $ 36.67 As of December 31, 2023, a total of $200 million of share repurchase authorization remaining available under Lazard’s share repurchase program will expire on December 31, 2024.
Operating Results Year Ended December 31, 2022 versus December 31, 2021 The Company reported net income attributable to Lazard Ltd of $358 million, as compared to net income attributable to Lazard Ltd of $528 million in 2021. Net revenue decreased $419 million, or 13%, with operating revenue decreasing $370 million, or 12%, as compared to 2021.
Operating Results Year Ended December 31, 2023 versus December 31, 2022 The Company reported a net loss attributable to Lazard Ltd of $75 million, as compared to net income attributable to Lazard Ltd of $358 million in 2022. Net revenue decreased $258 million, or 9%, with operating revenue decreasing $329 million, or 12%, as compared to 2022.
Taking into account all available information, we cannot determine that it is more likely than not that deferred tax assets held by these entities will be realized.
Taking into account all available information, we cannot determine that it is more likely than not that deferred tax assets held by these entities will be realized. Consequently, we have recorded valuation allowances on deferred tax assets held by these entities as of December 31, 2023.
Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property. We believe that “adjusted non-compensation expense”, a non-GAAP measure, when presented in conjunction with U.S.
Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property.
We purchase insurance policies designed to help protect the Company against accidental loss and losses that may significantly affect our financial objectives, personnel, property or our ability to continue to meet our responsibilities to our various stakeholder groups. See Item 1A, “Risk Factors” above for more information regarding operational risk in our business.
We purchase insurance policies designed to help protect the Company against accidental loss and losses that may significantly affect our financial objectives, personnel, property or our ability to continue to meet our responsibilities to our various stakeholder groups.
( c ) Expenses related to the consolidation of noncontrolling interests are excluded because the Company has no economic interest in such amounts.
(c) Expenses related to the consolidation of noncontrolling interests are excluded because the Company has no economic interest in such amounts. (d) Adjusted non-compensation expense is a non-GAAP measure.

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