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What changed in Lazard, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Lazard, Inc.'s 2023 and 2024 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 2024 report.

+397 added−385 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-23)

Top changes in Lazard, Inc.'s 2024 10-K

397 paragraphs added · 385 removed · 312 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

69 edited+10 added−12 removed61 unchanged
Biggest changeIn 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.
Biggest changeIn addition to the investments made as part of this strategy, we believe that our Financial Advisory business may benefit from current external market factors, including: • the demand for independent, sophisticated, customized financial advice; • the large amount of undeployed committed capital in the global financial system, particularly with financial sponsors; • financial sponsors’ drive to monetize aging portfolio assets and raise new funds; • a more favorable regulatory environment, especially in the U.S.; • improved macroeconomic conditions and stable economic outlook; • increased CEO confidence ascertained through global client interactions, along with positive market sentiment; and • strategic market and industry catalysts; including technology and generative AI, the biotech revolution, ongoing expansion in energy demand and efforts to derisk supply chains.
Asset Management Our Asset Management business 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.
Asset Management Our Asset Management business 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 wealth clients.
Orszag served as the Director of the Office of Management and Budget in the Obama Administration from January 2009 to July 2010, and was the Director of the Congressional Budget Office from January 2007 to December 2008. Mr. Orszag is a member of the Board of Directors of the Peterson Institute for International Economics, the Mt.
Orszag served as the Director of the Office of Management and Budget in the Obama Administration from January 2009 to July 2010, and was the Director of the Congressional Budget Office from January 2007 to December 2008. Mr. Orszag is a member of the Board of Directors of the Peterson Institute for International Economics and the Mt.
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.
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, Milan, Montreal, Nantes, Paris, Riyadh, San Francisco, Seoul, Singapore, Sydney, Tokyo, Toronto, Vienna and Zurich.
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.
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 8 boutique financial advisory firms.
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.
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.
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.
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, Milan, Montreal, Nantes, Paris, Riyadh, San Francisco, Seoul, Singapore, Sydney, Tokyo, Toronto, Vienna and Zurich.
Similar rules and regulations exist in other jurisdictions in which we operate. In addition, we are required to comply with economic sanctions and embargo programs administered by the U.S. Treasury’s Office of Foreign Assets Control and by similar governmental agencies and other authorities worldwide.
Similar rules and regulations exist in other jurisdictions in which we operate. In addition, we are required to comply with economic sanctions and embargo programs administered by the U.S. Treasury’s Office of Foreign 10 Assets Control and by similar governmental agencies and other authorities worldwide.
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.
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-Australia Global Ex-U.S.
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.
LLC (“LFNY”), through which we conduct all 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.
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
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.
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.
In Financial Advisory, while we believe our independent 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 products, including loans, insurance, foreign exchange, hedging, research, brokerage and underwriting services, which may enhance their competitive position.
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.
Competition The financial services industry, and all of the businesses in which we operate, 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.
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.
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, 56 Ms. Soto became Chief Operating Officer of Lazard, Inc. and Lazard Group in October 2023.
As such, LFNY is subject to regulations governing most aspects of the securities business, including regulations regarding minimum capital retention requirements, record-keeping and reporting procedures, relationships with customers, experience and training requirements for certain employees and business procedures with firms that are not members of certain regulatory bodies.
As such, LFNY is subject to regulations governing most aspects of the securities business, including regulations regarding minimum capital retention requirements, record-keeping and reporting procedures, relationships with clients, experience and training requirements for certain employees and business procedures with firms that are not members of certain regulatory bodies.
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.
Our Financial Advisory business offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of advisory services including mergers and acquisitions (“M&A”) advisory, capital markets advisory, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters.
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.
Weideman served as Associate Counsel to the President at the White House and as a litigator at Williams & Connolly. 12 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.
Many of our global equity analysts, located in our worldwide offices, are organized around global industry sectors. 6 Investment Strategies Our Asset Management business provides equity, fixed income, cash management and alternative investment strategies to our clients, paying close attention to our clients’ varying and expanding investment needs.
Many of our global equity analysts, located in our worldwide offices, are organized around global industry sectors. 5 Investment Strategies Our Asset Management business provides equity, fixed income, cash management and alternative investment strategies to our clients, paying close attention to our clients’ varying and expanding investment needs.
Lazard Asset Management Securities LLC (“LAM Securities”), a subsidiary of Lazard Asset Management LLC (“LAM LLC”), is registered as a broker-dealer with the SEC and FINRA and in all 50 U.S. states, the District of Columbia and Puerto Rico.
Lazard Asset Management Securities LLC (“LAM Securities”), a subsidiary of Lazard Asset Management LLC (“LAM LLC”), is registered as a limited-purpose broker-dealer with the SEC and FINRA and in all 50 U.S. states, the District of Columbia and Puerto Rico.
Such requirements relate to, among other things, the relationship between an advisor and its advisory clients, as well as general anti-fraud prohibitions. LAM LLC serves as an investment advisor to several U.S. mutual funds which are registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
Such requirements relate to, among other things, the relationship between an advisor and its advisory clients, general anti-fraud prohibitions, and conflicts of interest. LAM LLC serves as an investment advisor to several U.S. mutual funds which are registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
We continue to build our Financial Advisory business by fostering long-term, senior-level relationships with existing and new clients as their independent advisor on strategic transactions and other matters.
We continue to build our Financial Advisory business by fostering long-term relationships with existing and new clients as their independent advisor on strategic transactions and other matters.
Our human capital efforts are overseen by our Board of Directors, with a focus on enhancing our workplace environment which in turn, attracts a diversity of perspectives and exceptional talent.
Our human capital efforts are overseen by our Board of Directors, with a focus on enhancing our workplace environment which, in turn, attracts a variety of perspectives and exceptional talent.
These boutique firms frequently compete, among other factors, on the basis of their independent financial advice, and their activities also could result in pricing and other competitive pressure in our businesses. In some circumstances, our competitors may offer financial products or services that we do not offer, such as low-cost passive or private investment vehicles.
These boutique firms frequently compete, among other factors, on the basis of their independent financial advice, and their activities also could result in pricing and other competitive pressure in our businesses. In Asset Management, our competitors may offer financial products or services that we do not offer, such as low-cost passive or private investment vehicles.
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.
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, and a broad array of wellness programs.
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.
Global Ex-Emerging Markets Thematic Robotics Health Gender Diversity Quantitative Climate 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 U.S. Large Capitalization Small Capitalization Multi-Capitalization Sustainable Quantitative Small Capitalization Quantitative Large Capitalization U.K.
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.
Weideman, 49 Mr. Weideman became General Counsel of Lazard, Inc. and Lazard Group in October 2023. Prior to joining 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.
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.
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, 2024, we employed 3,263 full-time people.
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.
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 hiring and development of senior professionals who we believe have strong client relationships and industry expertise; • increasing our client engagement activities to further enhance our long-term relationships, and increasing our marketing efforts to develop new client relationships; • increasing our connectivity to private capital; • 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, AI and data science capabilities to enhance our business; and • deploying our intellectual capital, strong client relationships and other assets to generate new revenue streams.
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.
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, 2024, Edgewater had approximately $1.5 billion of AUM and unfunded fee-earning commitments.
(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.
(Large Capitalization) France Large Capitalization Small Capitalization Asia Pacific Australia Japan Emerging Markets Large Capitalization Small Capitalization Quantitative Multi-Asset Managed Volatility Middle East North Africa Middle East North Africa Fixed Income Global Core/Core Plus Total Return Short Duration Convertibles Cash Management Absolute Return Pan-European Core High Yield Cash Management Duration Overlay Convertibles Total Return Green Bonds Eurozone Core/Core Plus Cash Management Corporate Bonds Nordic Scandinavian Short Duration High Yield 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 13, 2024, 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”. 11 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 January 24, 2025, all of whom have been appointed by, and serve at the discretion of, our board of directors.
We also believe that this positioning affords us insight around the globe into key industry, economic, governmental and regulatory issues and developments, which we can bring to bear on behalf of our clients. Services Offered We advise clients on a wide range of strategic and financial issues.
We also believe that this positioning affords us unique global insight into key industry, economic, governmental and regulatory issues and developments, which we can bring to bear on behalf of our clients. Services Offered We advise clients on a wide range of strategic and financial issues.
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.
Our top ten clients accounted for 32% of our total assets under management (“AUM”) as of December 31, 2024, with no client individually contributing more than 10% of our Asset Management segment net revenue.
Many of our affiliates that participate in securities markets are subject to comprehensive regulations that include some form of minimum capital retention requirements and customer protection rules. In the U.S., certain of our subsidiaries are subject to such regulations promulgated by the United States Securities and Exchange Commission (the “SEC”) and/or the Financial Industry Regulatory Authority (“FINRA”).
Many of our affiliates that participate in securities markets are subject to comprehensive regulations that include some form of minimum capital retention requirements and customer protection rules. In the U.S., certain of our subsidiaries are subject to such regulations promulgated by the SEC and/or the Financial Industry Regulatory Authority (“FINRA”).
Managing directors and professionals in our M&A practice are organized to provide advice in the following major industry practice areas: • consumer; • financial institutions; • health care and life sciences; • industrials; • power and energy/infrastructure; • real estate; • technology; and • telecommunications, media and entertainment.
Managing directors and professionals in our M&A practice are organized to provide advice in the following major industry practice areas: • consumer and retail; • financial institutions; • financial sponsors; • health care and life sciences; • industrials; • media, entertainment and sports; • power, energy and infrastructure; • real estate; • technology; and • telecom and digital infrastructure.
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.
Over the past several years, in an effort to strengthen 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 sustainable strategies, quantitative equity strategies, thematically oriented strategies and the upcoming launch of actively managed ETFs; • invested in our technology infrastructure and data science capabilities to enhance our business; and • continued to expand our geographic reach where opportunities arise.
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.
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 7 development; values inclusion; and encourages its people to engage with each other and their communities.
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.
Many of our managing directors and senior employees come from 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, 2024, our Financial Advisory segment had 194 managing directors and 1,363 other professionals and support staff.
Our U.S. broker-dealer subsidiaries, including LFNY, are subject to the SEC’s uniform net capital rule, Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the net capital rules of FINRA, which may limit our ability to make withdrawals of capital from our broker-dealer subsidiaries.
Our U.S. broker-dealer subsidiaries, including LFNY, are subject to the SEC’s uniform net capital rule, Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the net capital rules of FINRA.
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.
These operations, with 124 managing directors and 1,117 other professionals and support staff as of December 31, 2024, provide our Asset Management business with both a global presence and a local identity.
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.
Item 1. Business Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia.
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.
Core/Core Plus High Yield Short Duration Municipals Cash Management Convertibles Emerging Markets Emerging Debt- Core/Local/Blend/Corporate Cash Management Alternative Global Arbitrage/Relative Value Commodities Sustainable Private Infrastructure Private Equity Fund of Funds Real Assets Fund of Funds Illiquid Credit Fund of Funds European Long/Short Equity U.S. Quantitative Long/Short Equity Non-U.S.
The Investment Company Act regulates, among other things, the relationship between a mutual fund and its investment advisor (and other service providers) and prohibits or severely restricts principal transactions between an advisor and its advisory clients, imposes record-keeping and reporting requirements, disclosure requirements, limitations on trades where a single broker acts as the agent for both the buyer and seller, and limitations on affiliated transactions and joint transactions.
The Investment Company Act regulates, among other things, the relationship between a mutual fund and its investment advisor (and other service providers) and prohibits or severely restricts principal transactions between an advisor and its advisory clients, imposes record-keeping and reporting requirements, disclosure requirements, limitations on trades, and limitations on affiliated transactions and joint transactions.
To develop new client relationships, and to develop new engagements from historical client relationships, we maintain an active dialogue with a large number of clients and potential clients, as well as with their financial and legal advisors, on an ongoing basis.
To develop new client relationships, and to develop new engagements from historical client relationships, we maintain an active dialogue with a large number of clients and potential clients, as well as with their financial and legal advisors, on an ongoing basis. We have gained a significant number of new clients through our business development initiatives.
When we advise clients on the potential acquisition of another company, business or certain assets, our services include evaluating potential acquisition targets, providing valuation analyses, evaluating and proposing financial and structural alternatives and rendering, if appropriate, fairness opinions.
When we advise clients on the potential acquisition of another company, business or certain assets, our services include evaluating potential acquisition targets, providing valuation analyses, evaluating and proposing financial and structural alternatives and rendering, advising on the geopolitical and regulatory landscape as it may affect a transaction, and if appropriate, delivering fairness opinions.
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.
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; • public and private debt and structured equity transactions, such as refinancing, acquisition financing, capital structure optimization, covenant relief and liability management, dividend recapitalization, rescue financing, liquidity enhancement, growth capital, infrastructure financing, project financing and debtor-in-possession financings; • 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.
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.
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 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 9 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.
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.
Approximately 82% of our AUM as of December 31, 2024 was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors, and approximately 18% of our AUM was managed on behalf of individual client relationships, which are principally with family offices and high net worth individuals. 4 The charts below illustrate the mix of our AUM as of December 31, 2024, measured by product platform and by office location.
We strive to cultivate a workforce comprised of people with different backgrounds and experiences, which we believe creates an environment of cognitive diversity that promotes new ideas and innovation.
We strive to cultivate a workforce comprised of people with different backgrounds and experiences, which we believe creates an environment that promotes new ideas and innovation and best serves the complex needs of our clients.
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.
Japan Long/Short Equity Emerging Markets Emerging Debt Total Return Emerging Income 6 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.
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”).
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.
These products are generally offered on a separate account basis, as well as through pooled vehicles. Distribution. We distribute our products through a broad array of marketing channels on a global basis.
In many cases, we also offer both diversified and more concentrated versions of our products. These products are generally offered on a separate account basis, as well as through pooled vehicles. Distribution. We distribute our products through a broad array of marketing channels on a global basis.
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.
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. She holds a CPA license in the State of New York and is a CFA charterholder.
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.
Evan L. Russo, 50 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.
Volunteering through our Work for Good program allows employees to make a positive impact in their communities and share experiences with their colleagues outside of the workplace.
We promote community engagement through our Work for Good initiative, which supports employee initiatives to volunteer with a variety of local charities. Volunteering through our Work for Good program allows employees to make a positive impact in their communities and share experiences with their colleagues outside of the workplace.
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.
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; • environmental, social and governance (“ESG”) factors; and • client-specific guidelines.
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.
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. Strategy Our strategic plan in our Asset Management business is to focus on delivering superior investment performance and client service.
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 operate through two business segments: our Financial Advisory business included 194 managing directors and 1,363 professionals and support staff, and our Asset Management business included 124 managing directors and 1,117 professionals and support staff. Our Corporate segment included 21 managing directors and 444 professionals and support staff.
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.
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.
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 cultivate a commercial and collegial culture that encourages innovative thinking, as our expertise and reputation for excellence starts with our talented employees around the world.
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.
Sinai Medical Center, and is a member of the National Academy of Medicine. Mary Ann Betsch, 46 Ms. Betsch became Chief Financial Officer of Lazard, Inc. and Lazard Group in October 2022. Prior to joining Lazard, Ms. Betsch worked at Citadel, where she helped lead the finance and accounting function since 2018. Ms.
In addition to seeking business centered in the regions described above, we historically have focused in particular on advising clients with respect to cross-border transactions.
In addition to seeking business centered in the regions described above, we historically have focused in particular on advising clients with respect to cross-border transactions. We believe that we are particularly well known for our global reach and network alongside deep local knowledge.
We offer a wide range of resources to support employees and their families’ emotional and financial well-being. We have also made investments in technology that enable remote and hybrid working options. Community. The Company promotes community engagement through our Work for Good initiative, which supports employee initiatives to volunteer with a variety of local charities.
We offer a wide range of resources to support employees and their families’ emotional and financial well-being. We have also made investments in technology that enable remote and hybrid working options. Community. The Company encourages individuals to give back to their communities through volunteering and educational outreach.
We also invest in wellness programs that are broadly inclusive and support varied lifestyles. We further believe that the equity-based portion of our compensation program fosters a greater sense of ownership among our senior employees and aligns their interests with those of our shareholders. Talent Development.
In addition, we believe that the equity-based portion of our compensation program fosters a greater sense of ownership among our senior employees and aligns their interests with those of our shareholders. Talent Development. We seek to hire talented and motivated individuals and prioritize their continued education and training.
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.
In addition, developing internal talent and the lateral recruiting of senior investment banking professionals are also core components of our growth strategy. 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 .
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.
For the year ended December 31, 2024, 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. 1 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.
We believe that the mix of our activities across business segments, geographic regions, industries and investment strategies helps to diversify and stabilize our revenue stream.
We believe that the mix of our activities across business segments, geographic regions, industries and investment strategies helps to diversify and stabilize our revenue stream. Financial Advisory We advise leaders on their most important financial and strategic matters, serving as a trusted advisor whose mission is to ensure the best result for our clients.
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.
Peter Orszag, 56 Mr. Orszag became Chairman of the Board of Directors of Lazard, Inc. and Lazard Group effective January 2025 and Chief Executive Officer and a Director of Lazard, Inc. and Lazard Group in October 2023. He previously served as Chief Executive Officer of Financial Advisory from June 2019 until September 2023.
With origins dating to 1848, we have long specialized in crafting solutions to the complex financial and strategic challenges of a diverse set of clients around the world, including corporations, governments, institutions, partnerships and individuals. Principal Business Lines We focus primarily on two business segments: Financial Advisory and Asset Management.
Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. Principal Business Lines We focus primarily on two business segments: Financial Advisory and Asset Management.
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We focus on solving our clients’ most complex issues, providing advice to key decision-makers, senior management, boards of directors and business owners, as well as governments and governmental agencies, in transactions that typically are of significant strategic and financial importance to them.
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We earned $1 million or more from 344 clients for the year ended December 31, 2024.
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We have gained a significant number of new clients each year through our business development initiatives, through recruiting additional senior investment banking professionals who bring with them client relationships and through referrals from directors, attorneys and other third parties with whom we have relationships.
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References to our website in this Annual Report on Form 10-K (this “Form 10-K”) are provided as a convenience and the information contained on, or available through, our website is not part of this or any other report we file with or furnish to the United States Securities and Exchange Commission (“the “SEC”).
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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.
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In addition, we provide a holistic view on liability management, and we specialize in advising clients, both companies and creditors, on out-of-court restructurings, recapitalizations, and tender and exchange offers, among other solutions.
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We believe that we are particularly well known for our legacy of offering broad teams of professionals who are indigenous to their respective regions, who have long-term client relationships, capabilities and know-how in their respective regions and who will coordinate with our professionals who have global sector expertise.
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Going forward our strategic emphasis in our Financial Advisory business is to focus on investing in high caliber senior hires, alongside the continued development and retention of our talent to grow our business and drive our productivity.
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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.
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We expect to make hires that will strengthen our presence across sectors and geographies expanding our coverage efforts and gaining access to new markets. We expect the number of our managing directors to increase in the future as we grow revenues. We routinely reassess our strategic position and make adjustments accordingly to further enhance our competitive position.
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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.

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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. • 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.
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 or value 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 have in the past, and could again in the future, 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. • Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business. • 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. • If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully. • The financial services industry, and all of the businesses in which we operate, 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, and declines in our Financial Advisory engagements could have a material adverse effect on our business, financial condition and results of operations. • If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue would 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. 14 • 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, dispositions, reorganizations, joint ventures, cooperation agreements or other strategic alternatives that may result in additional risks and uncertainties in our business and could present unforeseen 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. • We are subject to reputational risks that could harm our business. • Our international operations are subject to certain risks, which may affect our revenue. • 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 and regulations 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. • Changes in relevant tax laws or rates, changes in regulations, treaties or the interpretation of these items, or changes in the jurisdictional mix of our earnings 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.
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.
In addition, we have and may continue to enter into joint ventures and 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.
These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events.
These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements are only predictions based on our current expectations and projections about future events.
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.
These factors include, but are not limited to, the numerous risks and uncertainties outlined in “Risk Factors,” including the following: • adverse general economic conditions or adverse conditions in 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.
Our certificate of incorporation and by-laws contain provisions that may make the merger or acquisition of the Company more difficult, for example: • permitting our Board of Directors to issue one or more series of preferred stock; • providing that any vacancy on the board of directors may be filled only by a majority of the directors then in office or by the sole remaining director; • requiring advance notice for stockholder proposals and nominations; • providing that, subject to certain limitations, (i) the Board of Directors is expressly authorized to adopt, amend and repeal our by-laws and (ii) that our stockholders may only adopt, amend and repeal our by-laws with the approval of at least a majority of the outstanding shares of our capital stock entitled to vote thereon (or, in some cases, a super-majority); • providing that the Board of Directors will be divided into three classes of directors serving staggered three-year terms; • establishing limitations on convening stockholder meetings; • requiring stockholder action by written consent to be unanimous; and • providing for the removal of directors only for cause.
Our certificate of incorporation and by-laws contain provisions that may make the merger or acquisition of the Company more difficult, for example: 29 • permitting our Board of Directors to issue one or more series of preferred stock; • providing that any vacancy on the board of directors may be filled only by a majority of the directors then in office or by the sole remaining director; • requiring advance notice for stockholder proposals and nominations; • providing that, subject to certain limitations, (i) the Board of Directors is expressly authorized to adopt, amend and repeal our by-laws and (ii) that our stockholders may only adopt, amend and repeal our by-laws with the approval of at least a majority of the outstanding shares of our capital stock entitled to vote thereon (or, in some cases, a super-majority); • providing that the Board of Directors will be divided into three classes of directors serving staggered three-year terms; • establishing limitations on convening stockholder meetings; • requiring stockholder action by written consent to be unanimous; and • providing for the removal of directors only for cause.
Geopolitical instability, conflicts and related sanctions that have been or may be imposed may have further global economic and other consequences, including reduced consumer confidence, decreased economic growth, increased inflation and higher interest rates, each of which could adversely affect our performance in both our Financial Advisory and Asset Management businesses resulting from, among other things, decreased M&A activity and downward pressure on assets under management.
Geopolitical instability, conflicts and related sanctions that have been or may be imposed may have further global 16 economic and other consequences, including reduced consumer confidence, decreased economic growth, increased inflation and higher interest rates, each of which could adversely affect our performance in both our Financial Advisory and Asset Management businesses resulting from, among other things, decreased M&A activity and downward pressure on assets under management.
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.
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.
The effect, complexity and scope of any such expanded or new standards, requirements and rules is uncertain and could increase costs of compliance, monitoring and reporting and result in increased potential for litigation, sanctions and other liabilities, all of which could have adverse consequences to our business, financial condition and results of operations.
The effect, complexity and scope of any such expanded or new standards, requirements and rules is uncertain 25 and could increase costs of compliance, monitoring and reporting and result in increased potential for litigation, sanctions and other liabilities, all of which could have adverse consequences to our business, financial condition and results of operations.
Substantial legal liability or significant regulatory or governmental action against us could materially adversely affect our business, financial condition or results of operations and cause significant reputational harm to us, which could seriously harm our business. Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
Substantial legal liability or significant regulatory or governmental action against us could materially adversely affect our business, financial condition or results of operations and cause significant reputational harm to us, which could seriously harm our business. Expectations and regulations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
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, 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. 31 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.
As a result, our engagements with clients are constantly changing, and our Financial Advisory fees could decline quickly due to the factors discussed above. If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue could suffer.
As a result, our engagements with clients are constantly changing, and our Financial Advisory fees could decline quickly due to the factors discussed above. If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue would suffer.
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.
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, many of our competitors have the ability to offer a wide range of products, from loans, deposit-taking and insurance to brokerage, asset management and investment banking services, including products and services which we do not currently offer, which may enhance their competitive position.
In addition, many of our competitors have the ability to offer a wide range of products, from loans, deposit-taking and insurance to brokerage, asset management and investment banking services, including products and services which we do 19 not currently offer, which may enhance their competitive position.
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.
Furthermore, as many 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.
Certain investment teams within our Asset Management business, for example, employ proprietary systems, including 25 quantitative models, in connection with their investment processes. These systems and models are often designed and, with assistance from technology personnel, maintained by employees who are members of those investment teams.
Certain investment teams within our Asset Management business, for example, employ proprietary systems, including quantitative models, in connection with their investment processes. These systems and models are often designed and, with assistance from technology personnel, maintained by employees who are members of those investment teams.
As further discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes” and Note 19 of Notes to Consolidated Financial Statements, the Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “Amended and Restated Tax Receivable Agreement”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to the Trust of a significant portion of the cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of certain tax benefits that are subject to the Amended and Restated Tax Receivable Agreement.
As further discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes” and Note 21 of Notes to Consolidated Financial Statements, the Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “Amended and Restated Tax Receivable Agreement”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to the Trust of a significant portion of the cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of certain tax benefits that are subject to the Amended and Restated Tax Receivable Agreement.
In addition, our profitability would be adversely affected due to our fixed costs and the possibility that we would be unable to reduce our variable costs without reducing revenue or within a timeframe sufficient to offset any decreases in revenue relating to changes in market and economic conditions.
In addition, our profitability would be adversely affected due to our fixed costs and the possibility that we may be unable to reduce our variable costs without reducing revenue or within a timeframe sufficient to offset any decreases in revenue relating to changes in market and economic conditions.
Any failure or interruption of these systems, whether caused by fire, other natural disaster, power or telecommunications failure, geopolitical instability, act of terrorism or war, system modification or upgrade or a delay of any modification or upgrade or otherwise, could materially adversely affect our business.
Any failure or interruption of these systems, whether caused by fire, other natural disaster, power or telecommunications failure, geopolitical instability, act of terrorism or war, system modification or upgrade or a delay of any modification or upgrade or 24 otherwise, could materially adversely affect our business.
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.
In addition, if we act as an 20 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.
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.
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 financial advisors and financial institutions.
Lazard Group depends on its subsidiaries, which conduct the operations of its businesses, for distributions, dividends and other payments to generate the funds necessary to meet its financial obligations, including payments of principal and interest on its indebtedness.
Lazard Group depends on its subsidiaries, which conduct the operations of its businesses, for distributions, dividends and other payments to generate the funds necessary to meet its financial obligations, including payments of principal and 30 interest on its indebtedness.
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.
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.
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.
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, restricted stock awards, performance-based restricted stock units (“PRSUs”), profits interest participation rights (“PIPRs”) or other equity-based awards in a particular year.
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.
Furthermore, we seek to align the interests of our managing directors and other key professional employees with those 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.
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.
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, our client is outbid, adverse market conditions or because the seller’s business is experiencing unexpected operating or financial problems.
In addition, these investments may be adjusted for accounting purposes to fair value at the end of each quarter, and any related gains or losses would affect our results of operations and could increase the volatility of our earnings, even though such fair value fluctuations may have no cash impact.
In addition, these investments are adjusted for accounting purposes to fair value at the end of each quarter, and any related gains or losses would affect our results of operations and could increase the volatility of our earnings, even though such fair value fluctuations may have no cash impact.
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.
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. 33 Item 1B.
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.
For the year ended December 31, 2024, 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.
As a result, there is heightened demand for information related to ESG factors, such as climate change, natural resources, waste reduction, energy, human capital, and risk oversight, including with respect to our supply chain, which expands the nature, scope, and complexity of matters that we are expected to manage, assess, and report.
As a result, there is demand for information related to ESG factors, such as climate change, natural resources, waste reduction, energy, human capital, and risk oversight, including with respect to our supply chain, which expands the scope and complexity of matters that we are expected to assess and report.
Unresolved Staff Comments There are no unresolved written comments that were received from the SEC staff 180 days or more before December 31, 2023 relating to our periodic or current reports under the Exchange Act.
Unresolved Staff Comments There are no unresolved written comments that were received from the SEC staff 180 days or more before December 31, 2024 relating to our periodic or current reports under the Exchange Act.
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.
Forward-looking statements include, but are not limited to, statements about: • financial goals, including ratios of adjusted compensation and benefits expense to adjusted net 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 or other strategic transactions, including the consideration to be paid and the timing of consummation; • potential growth opportunities available to our businesses; 32 • potential impact of investments in our technology infrastructure and data science capabilities; • recruitment and retention of our managing directors and employees; • potential levels of expense, including adjusted compensation and benefits expense, and adjusted 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.
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, 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 financial services industry regarding the recruitment and retention of key professionals, and have experienced both departures from and additions to our professional ranks as a result.
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.
As of December 31, 2024, Lazard Group and its subsidiaries had approximately $1.7 billion in debt outstanding, of which $300 million, $500 million, $500 million and $400 million relate to Lazard Group senior notes that mature in 2027, 2028, 2029 and 2031, respectively. This debt has certain mandated payment obligations, which may constrain our ability to operate our business.
We also make statements about our ESG goals and initiatives through our ESG Corporate Sustainability reporting and our Asset Management Sustainable Investing perspectives, which is available on our public websites. We may not achieve our ESG goals and initiatives. In addition, some stakeholders may disagree with our goals and initiatives.
We make statements about our ESG goals and initiatives through our Corporate Sustainability reporting and our Asset Management Sustainable Investing perspectives, which are available on our public websites. We may not achieve our ESG goals and initiatives. In addition, some stakeholders may disagree with our goals and initiatives.
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.
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, 2024, Financial Advisory services accounted for approximately 57% of our consolidated net revenue.
These risks and challenges include potential disruption of our ongoing business and distraction of management, difficulty integrating personnel and financial and other systems, difficulty hiring additional management and other critical personnel and other challenges arising from the increased scope, geographic diversity and complexity of our operations.
These risks and challenges include potential disruption of our ongoing business and distraction of management, difficulty integrating personnel and financial and other systems, difficulty hiring additional management and other critical personnel and other challenges arising from the changes in scope, geographic diversity and complexity of our operations.
We routinely assess our strategic position and may in the future pursue new business lines or seek acquisitions or other transactions or growth strategies to further enhance our competitive position. We have in the past pursued joint ventures and other transactions aimed at expanding the geography and scope of our operations.
We routinely assess our strategic position and may in the future pursue new business lines, seek acquisitions, or evaluate other strategic alternatives to further enhance our competitive position. We have in the past pursued joint ventures and other transactions aimed at expanding the geography and scope of our operations.
Dollar-denominated revenue in our Asset Management business. As of December 31, 2023, AUM with foreign currency exposure represented approximately 64% of our total AUM. Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios.
Dollar-denominated revenue in our Asset Management business. As of December 31, 2024, AUM with foreign currency exposure represented approximately 62% of our total AUM. Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios.
Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, including certain of our executive officers, in proportion to their beneficial interests in the Trust.
Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, which includes certain of our executive officers, in proportion to their beneficial interests in the Trust.
We are in compliance with Section 404 of the Sarbanes-Oxley Act as of December 31, 2023.
We are in compliance with Section 404 of the Sarbanes-Oxley Act as of December 31, 2024.
To the extent that we pursue business opportunities outside of the U.S. and our other principal business locations, including through acquisitions, joint ventures or other geographic expansion of our existing businesses, we may become subject to political, economic, legal, operational, regulatory and other risks that are inherent in operating in a foreign country, including risks of potential price, capital and currency exchange controls, licensing requirements and other regulatory restrictions, as well as the risk of hostile actions against or affecting our business or people.
To the extent that we pursue business opportunities outside of the U.S. and our other principal business locations, including through acquisitions, dispositions, reorganizations, joint ventures or other strategic alternatives, we may become subject to political, economic, legal, operational, regulatory and other risks that are inherent in operating in a foreign country, including risks of potential price, capital and currency exchange controls, licensing requirements and other regulatory restrictions, as well as the risk of hostile actions against or affecting our business or people.
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.
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.
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.
Dollars and, for the year ended December 31, 2024, 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.
As a financial services firm, our businesses are materially affected by conditions in the global financial markets and economic conditions throughout the world. Unfavorable economic and market conditions can adversely affect our financial performance in both the Financial Advisory and Asset Management businesses.
As a financial services firm, our businesses are materially affected by conditions in the global financial markets and economic conditions throughout the world. Unfavorable economic and market conditions have in the past adversely affected and could again in the future adversely affect our financial performance in both the Financial Advisory and Asset Management businesses.
Our ability to remain in compliance with local laws in a particular foreign jurisdiction could adversely affect our businesses and our reputation.
As a result, any impact to our ability to remain in compliance with local laws in a particular foreign jurisdiction could adversely affect our businesses and our reputation.
The future market and economic climate may deteriorate because of many factors, such as a general slowing of economic growth globally or regionally, periods of disruption or volatility in securities markets, volatility and tightening of liquidity in credit markets, volatility or significant realignments in currency markets, increases in interest rates, inflation, corporate or sovereign defaults, natural disasters, pandemics, terrorism or political uncertainty or instability.
The future market and economic climate may deteriorate because of many factors, such as a general slowing of economic growth globally or regionally, periods of disruption or volatility in securities markets, volatility and tightening of liquidity in credit markets, volatility or significant realignments in currency markets, an evolving regulatory environment (and the timing and nature of regulatory reform), increases in interest rates, supply chain disruptions, inflation, corporate or sovereign defaults, natural disasters, pandemics, terrorism or political uncertainty or instability.
In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal” or “continue,” and the negative of these terms and other comparable terminology.
In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” and the negative of these terms and other comparable terminology.
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.
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.
During periods of unfavorable or uncertain market or economic conditions, the volume and value of M&A transactions may decrease, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements. Our results of operations would be adversely affected by any such reduction in the volume or value of M&A transactions.
During periods of unfavorable or uncertain market or economic conditions, the volume and value of M&A transactions may decrease, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements.
In addition, in the U.S., as required by the Investment Company Act, each of our investment advisory contracts with the mutual funds we advise or sub-advise automatically terminates upon its “assignment.” Each of our other investment advisory contracts subject to the provisions of the Investment Advisers Act provide, as required by the Investment Advisers Act, that the contract may not be “assigned” without the consent of the customer.
In addition, the ability to terminate relationships may allow clients to renegotiate reduced fees paid for asset management services. 21 In addition, in the U.S., as required by the Investment Company Act, each of our investment advisory contracts with the mutual funds we advise or sub-advise automatically terminates upon its “assignment.” Each of our other investment advisory contracts subject to the provisions of the Investment Advisers Act provide, as required by the Investment Advisers Act, that the contract may not be “assigned” without the consent of the customer.
In addition, our credit and settlement risk may be exacerbated when the collateral held by us, if any, cannot be fully realized or is liquidated at prices not sufficient to recover the full amount of the loan, credit balance or derivative exposure due to us.
In addition, our credit and settlement risk may be exacerbated when the collateral held by us, if any, cannot be fully realized or is liquidated at prices not sufficient to recover the full amount of the loan, credit balance or derivative exposure due to us. 23 LFG and LFB offer wealth management and banking services to high net worth individuals and families.
All of these provisions are complex and could adversely impact our effective tax rate in future years.
All of these provisions are complex and changes to such provisions or our interpretation of them could adversely impact our effective tax rate in future years.
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.
In addition, our clients and other stakeholders may react unfavorably to our acquisition, disposition, reorganization, growth and joint venture strategies, new business lines, or other strategic alternatives, or 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, disposition, reorganization, 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.
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.
Our effective tax rate is based upon the application of currently enacted income tax laws, regulations and treaties, and upon our non-U.S. subsidiaries’ ability to qualify for benefits under those treaties and those laws, regulations and treaties, and the administrative and judicial interpretations of them are subject to change at any time and such changes may adversely impact our effective tax rate.
Any failure, or perceived failure, to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us or client dissatisfaction and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
Any failure, or perceived failure, to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us or client dissatisfaction and materially adversely affect our business, reputation, results of operations, financial condition and stock price. 27 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.
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.
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.
As such, such vendors and service providers may be more susceptible to interruptions or confidentiality or security breaches than in prior periods. Any failure of or interruption to their systems or any back-up procedures and capabilities as a result of such actions or such growth in demand could materially adversely affect our business, financial condition and results of operations .
Any failure of or interruption to their systems or any back-up procedures and capabilities as a result of such actions or such growth in demand could materially adversely affect our business, financial condition and results of operations .
LFG and LFB offer wealth management and banking services to high net worth individuals and families. In order to support this business, LFB may extend lines of credit to such clients. These loans are fully collateralized, but collateral values could fluctuate over time.
In order to support this business, LFB may extend lines of credit to such clients. These loans are fully collateralized, but collateral values could fluctuate over time.
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.
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.
The impact of the potential changes on us are uncertain and may result in an increase in costs or a reduction of revenue associated with our businesses. See “Business—Regulation” above for a further discussion of the regulatory environment in which we conduct our businesses.
The impact of the potential changes on us are uncertain and may result in an increase in costs or a reduction of revenue associated with our businesses.
The activities of our Financial Advisory business may subject us to the risk of significant legal actions by our clients and third parties, including our clients’ stockholders, under securities or other laws.
In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial advisors has increased. The activities of our Financial Advisory business may subject us to the risk of significant legal actions by our clients and third parties, including our clients’ stockholders, under securities or other laws.
Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth. Our business is highly dependent on communications and information systems, including those of our vendors.
If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results. Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth. Our business is highly dependent on communications and information systems, including those of our vendors.
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.
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. We experience significant fluctuations in quarterly revenue and profits.
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.
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.
For example, the Tax Cuts and Jobs Act of 2017 includes several international provisions applicable to us and the recently enacted Inflation Reduction Act imposes, among other items, an alternative minimum “book” tax on certain large corporations and a new 1% excise tax on net stock repurchases made by certain publicly traded corporations after December 31, 2022.
For example, the Tax Cuts and Jobs Act of 2017 includes several international provisions applicable to us and the Inflation Reduction Act of 2022 imposes, among other items, a 1% excise tax on net stock repurchases made by certain publicly traded corporations which may impact us and consequently, we continue to monitor guidance and regulations on such provisions.
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. We are exposed to fluctuations in foreign currencies, including through advisory fees paid to our Financial Advisory business and management fees paid to our Asset Management business.
Fluctuations in foreign currency exchange rates may also affect the levels of our AUM and our asset management 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.
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.
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.
There can be no assurance that protective measures and policies we have instituted in an effort to reduce the likelihood and severity of such interruptions and breaches, including as a result of cybersecurity incidents or threats, will be adequate. 29 Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business.
Additionally, such home and mobile technology resources could be more susceptible to interruptions and security breaches than our dedicated business resources. There can be no assurance that protective measures and policies we have instituted in an effort to reduce the likelihood and severity of such interruptions and breaches, including as a result of cybersecurity incidents or threats, will be adequate.
We must retain the services of our managing directors and other key professional employees, and strategically recruit and hire new talented employees, to obtain and successfully execute the Financial Advisory and Asset Management engagements that generate substantially all of our revenue.
We must retain the services of our managing directors and other key professional employees, and strategically recruit and hire new talented employees, to obtain and successfully execute the Financial Advisory and Asset Management engagements that generate substantially all of our revenue. 18 In general, our industry continues to experience change and be subject to significant competitive pressures with respect to the retention of top talent, which makes it more difficult for us to retain professionals.
Our ability to form new alternative investment funds is subject to a number of uncertainties, including past performance of our funds, market or economic conditions, competition from other fund managers and the ability to negotiate terms with major investors.
Our ability to form new alternative investment funds is subject to a number of uncertainties, including past performance of our funds, market or economic conditions, competition from other fund managers and the ability to negotiate terms with major investors. 22 We may pursue new business lines, acquisitions, dispositions, reorganizations, joint ventures, cooperation agreements or other strategic alternatives that may result in additional risks and uncertainties in our business and could present unforeseen obstacles or costs.
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. In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial advisors has increased.
See “Business—Regulation” above for a further discussion of the regulatory environment in which we conduct our businesses. 26 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.
Our compensation levels, results of operations and financial position may be significantly affected by many factors, including general economic and market conditions, our operating and financial performance, staffing levels and competitive pay conditions. The financial services industry, and all of the businesses in which we compete, are intensely competitive.
Our compensation levels, results of operations and financial position may be significantly affected by many factors, including general economic and market conditions, our operating and financial performance, staffing levels and competitive pay conditions. If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully.
Tax authorities may challenge our tax computations and classifications, our transfer pricing methods and our application of related policies and methods. Our tax returns are subject to audit by U.S. federal, state, local and foreign tax authorities. These authorities may successfully challenge certain tax positions or deductions taken by our subsidiaries.
Our tax returns are subject to audit by U.S. federal, state, local and foreign tax authorities. These authorities may successfully challenge certain tax positions or deductions taken by our subsidiaries. For example, tax authorities may contest intercompany allocations of fee income, management charges or interest charges among affiliates in different tax jurisdictions.
We control Lazard Group through our indirect control of both of the managing members of Lazard Group. Following the Conversion, all of our operating income will be subject to U.S. federal corporate income taxes, which we anticipate will increase our effective tax rate and the amount of cash used to pay taxes.
We control Lazard Group through our indirect control of both of the managing members of Lazard Group. Following the Conversion, all of our operating income is subject to U.S. federal corporate income taxes. In addition, our subsidiaries incur income taxes on the net taxable income of Lazard Group in their respective tax jurisdictions.
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.
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, 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. 15 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 or value 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.
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.
Fluctuations in foreign currency exchange rates have in the past, and could again in the future, 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.
In our Asset Management business, we make investment decisions on behalf of our clients, which could result in substantial losses.
In our Asset Management business, we make investment decisions on behalf of our clients, which could result in substantial losses. Many of our business activities may subject us to the risk of legal actions alleging negligence, misconduct, breach of fiduciary duty or breach of contract.
Many of our business activities may subject us to the risk of legal actions alleging negligence, misconduct, breach of fiduciary duty or breach of contract. 27 We increasingly confront actual and potential conflicts of interest relating to our Financial Advisory business, as well as to the fact that we have both a Financial Advisory business and an Asset Management business.
We increasingly confront actual and potential conflicts of interest relating to our Financial Advisory business, as well as to the fact that we have both a Financial Advisory business and an Asset Management business. Additionally, our pursuit of new business lines or other growth opportunities could result in additional actual or potential conflicts of interest.
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.
We expect to continue to explore new business lines, acquisitions, growth strategies and partnership or strategic alliance opportunities that we believe to be attractive. We may also evaluate strategic alternatives to restructure our business, including dispositions and reorganizations that we believe enhance shareholder value.
If a tax authority were to successfully challenge our positions, it could result in significant additional tax costs or payments under the tax receivable agreement described below. In addition, there are additional transfer pricing and standardized country-by-country reporting requirements being implemented.
While we believe that we have provided the appropriate required reserves, it is possible that a tax authority may disagree with all, or a portion, of the tax benefits claimed. If a tax authority were to successfully challenge our positions, it could result in significant additional tax costs or payments under the tax receivable agreement described below.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Assessment Committee also provides a summary of all incidents that are determined to be immaterial to the Board’s Audit Committee at the next scheduled meeting. 36 For additional information regarding how cybersecurity threats or incidents are reasonably likely to materially affect our business strategy, results of operations or financial condition, see “ Risk Factors—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 ” and “ Risk Factors—Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth .”
Biggest changeFor additional information regarding how cybersecurity threats or incidents are reasonably likely to materially affect our business strategy, results of operations or financial condition, see “ Risk Factors—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 35 impact our ability to operate our business ” and “ Risk Factors—Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth .”
As part of our screening and evaluation processes, we conduct due diligence on our potential vendors, as well as regular assessments of current vendors, regarding compliance with law (including financial regulations, sanctions regimes and data privacy regulations) and cybersecurity standards, including background checks and system tests. 35 Our Chief Information Security Officer (“CISO”) regularly engages independent third parties to assess the performance of our cybersecurity risk management systems and procedures and to help test and identify cybersecurity risks to the Company.
As part of our screening and evaluation processes, we conduct due diligence on our potential vendors, as well as regular assessments of current vendors, regarding compliance with law (including financial regulations, sanctions regimes and data privacy regulations) and cybersecurity standards, including background checks and system tests. 34 Our Chief Information Security Officer (“CISO”) regularly engages independent third parties to assess the performance of our cybersecurity risk management systems and procedures and to help test and identify cybersecurity risks to the Company.
Our CFO reviews with the Audit Committee categories of risk the Company faces, including cybersecurity risks, as well as the likelihood of the occurrence of cybersecurity risks, the potential impact of those risks and the steps management has taken to monitor, mitigate and control such risks.
Management reviews with the Audit Committee categories of risk the Company faces, including cybersecurity risks, as well as the likelihood of the occurrence of cybersecurity risks, the potential impact of those risks and the steps management has taken to monitor, mitigate and control such risks.
A determination that a cybersecurity incident has, or is reasonably likely to have, a material impact on the Company is reported by the Assessment Committee to the CEO and the Board’s Audit Committee without delay.
The Assessment Committee in consultation with third-party experts, as warranted, makes the incident materiality determination consistent with SEC guidance. A determination that a cybersecurity incident has, or is reasonably likely to have, a material impact on the Company is reported by the Assessment Committee to the CEO and the Board’s Audit Committee without delay.
Removed
The Assessment Committee in consultation with third-party experts, as warranted, makes the incident materiality determination consistent with SEC guidance and by considering relevant quantitative and qualitative factors, including without limitation: • the probability of an adverse outcome; • the potential impact on financial results; • the likelihood of litigation or regulatory investigations; and • the potential impact on the Company’s reputation and competitiveness.
Added
The Assessment Committee also provides a summary of all incidents that are determined to be immaterial to the Board’s Audit Committee at the next scheduled meeting.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeItem 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, 2024. 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. 37 Part II
Biggest changeMine Safety Disclosures Not applicable. 36 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, 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.
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, 2024 Share Repurchase Program (1) – $ – – $ 356.2 million Employee Transactions (2) 236 $ 50.43 November 1 – November 30, 2024 Share Repurchase Program (1) 80,679 $ 61.01 80,679 $ 351.2 million Employee Transactions (2) 104 $ 50.90 December 1 – December 31, 2024 Share Repurchase Program (1), (3) 205,896 $ 51.72 205,896 $ 200.0 million Employee Transactions (2) 2,419 $ 57.61 Total Share Repurchase Program (1) 286,575 $ 54.34 286,575 $ 200.0 million Employee Transactions (2) 2,759 $ 56.75 ______________________ (1) The Board of Directors of Lazard authorized the repurchase of common stock as set forth in the table below as of December 31, 2024.
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.
The graph assumes $100 was invested at the close of business on December 31, 2019 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.
Purchases under the share repurchase program may be made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from quarter to quarter due to a variety of factors.
Purchases under the share repurchase program may be made in the open market or through privately negotiated transactions. The rate at which the Company purchases shares in connection with the share repurchase program may vary from period to period due to a variety of factors.
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.
Share Repurchases in the Fourth Quarter of 2024 The following table sets forth information regarding Lazard’s purchases of its common stock on a monthly basis during the fourth quarter of 2024. Share repurchases are recorded on a trade date basis.
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
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] 38
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.
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, 2019 through December 31, 2024, with that of the S&P 500 Index and the S&P Financial Index.
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.
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 24, 2025, there were approximately 17 holders of record of our common stock.
(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.
(2) Under the terms of the 2018 Plan, upon the settlement of RSUs and PRSUs, shares of common stock may be withheld by the Company to meet the minimum statutory tax withholding requirements.
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.
This does not include the number of shareholders that hold shares in “street-name” through banks or broker-dealers. On January 24, 2025, the last reported sales price for our common stock on the New York Stock Exchange was $53.90 per share.
Date Repurchase Authorization Expiration ($ 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”).
Date Repurchase Authorization Expiration ($ in thousands) February 2022 $ 300,000 December 31, 2024 July 2022 $ 500,000 December 31, 2024 July 2024 $ 200,000 December 31, 2026 The Company’s purchases under the share repurchase program over time are used to offset dilution from the shares that have been or will be issued under the Company’s 2018 Incentive Compensation Plan, as amended (the “2018 Plan”).
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.
During the three month period ended December 31, 2024, the Company satisfied such obligations in lieu of issuing (i) 2,759 shares of common stock upon the settlement of 5,836 RSUs. (3) Reflects expiration of $140.6 million share repurchase authorization on December 31, 2024.
Removed
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.
Added
As of December 31, 2024, a total of $200 million of share repurchase 37 authorization remained available under Lazard, Inc.’s share repurchase program which will expire on December 31, 2026.

Item 7. Management's Discussion & Analysis

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

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Biggest changeGAAP measures provide a meaningful and useful basis for comparison between present, historical and future periods, as described above. 46 Year Ended December 31, 2023 2022 2021 ($ in thousands) Operating Revenue: Net revenue $ 2,515,489 $ 2,773,571 $ 3,193,048 Adjustments: Interest expense (a) 77,457 76,528 74,375 Distribution fees, reimbursable deal costs, bad debt expense and other (b) (105,681) (76,229) (85,053) Asset impairment charges 19,129 – – Revenue related to noncontrolling interests (c) (30,190) (49,073) (31,624) (Gains) losses on investments pertaining to LFI (d) (41,463) 44,261 (35,494) Losses associated with cost-saving initiatives, restructuring and closing of certain offices (e) 4,878 – 23,645 Operating revenue (f) $ 2,439,619 $ 2,769,058 $ 3,138,897 ________________________ (a) Interest expense (excluding interest expense incurred by LFB) is added back in determining operating revenue because such expense relates to corporate financing activities and is not considered to be a cost directly related to the revenue of our business.
Biggest changeGAAP basis $ 3,051,837 $ 2,515,489 $ 2,773,571 Adjustments: Revenue related to noncontrolling interests and similar arrangements (a) (29,553) (30,190) (49,073) (Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements (b) (16,176) (41,463) 44,261 Distribution fees, reimbursable deal costs, provision for credit losses and other (c) (90,665) (105,681) (76,229) Interest expense (d) 87,795 77,457 76,528 Asset impairment charges – 19,129 – Losses associated with cost-saving initiatives (e) 587 4,878 – Gain on sale of property (f) (114,271) – – Adjusted net revenue (g) $ 2,889,554 $ 2,439,619 $ 2,769,058 ________________________ (a) Revenue or loss related to the consolidation of noncontrolling interests and similar arrangements are excluded from adjusted net revenue because the Company has no economic interest in such amounts.
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.
Corporate segment net revenue consists primarily of interest income and interest expense, 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”).
The Company makes cash payments for a significant portion of its incentive compensation during the first three months of each calendar year with respect to the prior year’s results.
The Company makes cash payments for a significant portion of its incentive compensation with respect to the prior year’s results during the first three months of each calendar year.
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.
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 risk are hedged using relevant benchmark indices.
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.
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.
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.
We determine the adequacy of the allowance under the current expected credit losses (“CECL”) guidance by (i) applying a charge-off rate based on historical credit loss 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.
Lazard’s involvement with various entities that are VOEs or VIEs primarily arises from LFI investments, seed and other investments in our Asset Management business, and LGAC. Lazard consolidates these entities when it has a controlling financial interest.
Lazard’s involvement with various entities that are VOEs or VIEs primarily arises from LFI investments, seed and other investments in our Asset Management business. Lazard consolidates these entities when it has a controlling financial interest.
At December 31, 2023, total receivables amounted to $762 million, net of an allowance for credit losses of $29 million. As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 74% and 26% of total receivables, respectively.
At December 31, 2023, total receivables amounted to $762 million, net of an allowance for 65 credit losses of $29 million. As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 74% and 26% of total receivables, respectively.
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.
We purchase insurance policies designed to help protect the Company against accidental loss and losses that may significantly affect our financial 66 objectives, personnel, property or our ability to continue to meet our responsibilities to our various stakeholder groups.
Incentive fees on hedge funds are often subject to loss carryforward provisions in which losses incurred by the hedge funds in any year are applied against certain gains realized by the hedge funds in future periods before any incentive fees can be earned.
Incentive fees on hedge funds are often subject to loss carryforward provisions in which losses incurred by the hedge funds in any year are applied against certain gains realized by the hedge funds in future periods before any further incentive fees can be earned.
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.
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 42 reasons, including investment performance, changes in prevailing interest rates and financial market performance.
The Company records incentive fees on traditional products and hedge funds at the end of the relevant performance measurement period, when potential uncertainties regarding the ultimate realizable amounts have been determined. The incentive fee measurement period is generally an annual period (unless an account terminates or redemption occurs during the year).
The Company records incentive fees on traditional products and hedge funds at the end of the relevant performance measurement period, when potential uncertainties regarding the ultimately realizable amounts have been determined. The incentive fee measurement period is generally an annual period (unless an account terminates or redemption occurs during the year).
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”.
A detailed review of our operating results for the year ended December 31, 2023 compared to the year ended December 31, 2022 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Results”.
This adaptability enables Lazard to more effectively deploy its professionals to best advantage based on the often counter-cyclical nature of restructuring as compared to our M&A business. While Lazard measures revenue by practice area, Lazard does not separately measure the costs or profitability of M&A services as compared to restructuring or other services.
This adaptability enables Lazard to more effectively deploy its professionals based on the often counter-cyclical nature of restructuring as compared to our M&A business. While Lazard measures revenue by practice area, Lazard does not separately measure the costs or profitability of M&A services as compared to restructuring or other services.
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.
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, 2024.
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.
In addition, we continue to invest in our Financial Advisory business by selectively hiring talented senior professionals to enhance our capabilities and sector expertise in M&A, public and private capital markets, and restructuring. • 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.
For instance, our results can diverge from industry-wide activity where there are material variances from the level of industry-wide M&A activity in a particular market where Lazard has greater or lesser relative market share, or regarding the relative number of our advisory engagements with respect to larger-sized transactions, and where we are involved in non-public or sovereign advisory assignments. 42 Asset Management The percentage change in major equity market indices (i) at December 31, 2023, as compared to such indices at December 31, 2022, and (ii) at December 31, 2022, as compared to such indices at December 31, 2021, is shown in the table below.
For instance, our results can diverge from industry-wide activity where there are material variances from the level of industry-wide M&A activity in a particular market where Lazard has greater or lesser relative market share, or regarding the relative number of our advisory engagements with respect to larger-sized transactions, and where we are involved in non-public or sovereign advisory assignments. 41 Asset Management The percentage change in major equity market indices (i) at December 31, 2024, as compared to such indices at December 31, 2023, and (ii) at December 31, 2023, as compared to such indices at December 31, 2022, is shown in the table below.
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.
The geographical distribution of Financial Advisory adjusted net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory adjusted net revenue, which are located in the Americas 50 (primarily in the U.S.), 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.
As of December 31, 2023 and 2022, the Company did not consolidate any seed investment entities or LFI investment entities, with the exception of the consolidation of certain LFI funds (see Note 24 of Notes to Consolidated Financial Statements).
As of December 31, 2024 and 2023, the Company did not consolidate any seed investment entities or LFI investment entities, with the exception of the consolidation of certain LFI funds (see Note 24 of Notes to Consolidated Financial Statements).
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.
See Notes 15 and 24 of Notes to Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs. 44 Consolidated Results of Operations Lazard’s consolidated financial statements are presented in U.S. Dollars.
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.
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.
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.
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. 58 Senior Debt The table below sets forth our corporate indebtedness as of December 31, 2024 and 2023.
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.
The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately $0.9 million as of December 31, 2024 and a net increase of approximately $0.2 million as of December 31, 2023 in the carrying value of such investments, including the effect of the hedging transactions.
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.
Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally, 43 lower adjusted net 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.
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.
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 including M&A advisory, capital markets advisory, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic 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 wealth clients.
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.
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.
The allowance for credit losses involves judgment including incorporation of historical loss experience and assessment of risk characteristics of our clients. The bad debt charge-off rate based on historical charge-off experience was an average annual rate estimated using the most recent two years of charge-off data.
The allowance for credit losses involves judgment including the incorporation of historical loss experience and assessment of risk characteristics of our clients. The charge-off rate based on historical credit loss experience is an average annual rate estimated using the most recent two years of charge-off data.
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%.
Based on account balances as of December 31, 2024, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $13 million in the event interest rates were to increase by 1% and decrease by approximately $13 million if rates were to decrease by 1%.
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.
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 Form 10-K. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties.
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.
Dollar would result in a net decrease of approximately $2.0 million in the carrying value of such investments as of both December 31, 2024 and 2023, 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.
As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows have a direct effect on Asset Management net revenue and operating income.
As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows for any reason have a direct effect on Asset Management net revenue and operating income.
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.
Year Ended December 31, 2024 2023 2022 Americas 60 % 55 % 59 % EMEA 39 44 40 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.
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.
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 $271 million and $365 million at December 31, 2024 and 2023, 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.
Interest Rate and Credit Spread Risk—At December 31, 2024 and 2023, 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 $24 million and $18 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.
Foreign Exchange Rate Risk—At December 31, 2024 and 2023, 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 $65 million and $69 million, respectively.
M&A fees can be earned as a retainer, working fee, announcement fee, milestone fee, opinion fee or transaction completion fee. With most fees being paid upon completion of a transaction the timing can be impacted by delays to securing financing, board approvals, regulatory approvals, shareholder votes, changing market conditions or other factors.
M&A fees can be earned as a retainer, working fee, announcement fee, milestone fee, opinion fee or transaction completion fee. Most fees are paid upon completion of a transaction, the timing of which can be impacted by delays due to securing financing, board approvals, regulatory approvals, shareholder votes, changing market conditions or other factors.
The amount of the TRA liability is an undiscounted amount based upon current tax laws and the structure of the Company and various assumptions regarding potential future operating profitability. The assumptions reflected in the estimate involve significant judgment, and if our structure or income assumptions were to change, we could be required to accelerate payments under the TRA.
The amount of the TRA liability is an undiscounted amount based upon current tax laws and the structure of the Company and various assumptions regarding potential future operating profitability. The assumptions reflected in the estimate involve significant judgment, and if our structure or actual income are different than our assumptions, we could be required to accelerate payments under the TRA.
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”).
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 AUM.
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”.
To the extent that such deposits rise or fall, and assuming unchanged asset allocation, this has a 57 corresponding impact on liquidity held at LFB, with the majority of such amounts generally being recorded in “deposits with banks and short-term investments”.
Certain Lazard fee and transaction statistics for the Financial Advisory segment are set forth below: Year Ended December 31, 2023 2022 2021 Lazard Statistics: Number of clients with fees greater than $1 million: Financial Advisory 299 304 370 Percentage of total Financial Advisory net revenue from top 10 clients (a) 19 % 19 % 15 % Number of M&A transactions completed with values greater than $500 million (b) 47 91 104 ________________________ (a) No individual client constituted more than 10% of our Financial Advisory segment net revenue in the years ended December 31, 2023, 2022 and 2021.
Certain Lazard fee and transaction statistics for the Financial Advisory segment are set forth below: Year Ended December 31, 2024 2023 2022 Lazard Statistics: Number of clients with fees greater than $1 million: Financial Advisory 344 299 304 Percentage of total Financial Advisory net revenue from top 10 clients (a) 19 % 19 % 19 % Number of M&A transactions completed with values greater than $500 million (b) 80 56 91 ________________________ (a) No individual client constituted more than 10% of our Financial Advisory segment net revenue in the years ended December 31, 2024, 2023 and 2022.
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.
As of December 31, 2024, the Company’s cash and cash equivalents totaled approximately $1,308 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.
LFI investments held in entities in which the Company maintained a controlling financial interest were $144 million in nine entities as of December 31, 2023, as compared to $139 million in nine entities as of December 31, 2022.
LFI investments held in entities in which the Company maintained a controlling financial interest were $93 million in nine entities as of December 31, 2024, as compared to $144 million in nine entities as of December 31, 2023.
Compensation expense in any given period is dependent on many factors, including general economic and market conditions, our actual and forecasted operating and financial performance, staffing levels, estimated forfeiture rates, competitive pay conditions and the nature of revenues earned, as well as the mix between current and deferred compensation.
Compensation expense in any given period is dependent on many factors, including general economic and market conditions, our actual and forecasted operating and financial performance, staffing levels, estimated forfeiture rates, competitive pay conditions and the nature of revenues earned, as well as the mix between current and deferred compensation. See Note 16 of Notes to Consolidated Financial Statements.
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.
The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $2.4 million and $3.0 million in the carrying value of such investments as of December 31, 2024 and 2023, respectively.
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.
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, (iii) a provision for discretionary or guaranteed cash bonuses and profit pools and (iv) when applicable, severance payments and cash retention awards.
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.
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 limit their ability to eliminate residual U.S. tax liability.
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.
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 $0.6 million as of December 31, 2024 and would not result in a net change in the carrying value of such investments as of December 31, 2023, including the effect of the hedging transactions.
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.
As of December 31, 2024, approximately 82% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors compared to 85% as of December 31, 2023.
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.
At December 31, 2024 and 2023, the Company’s exposure to changes in fair value of such investments was approximately $24 million and $30 million, respectively.
The following is a summary of changes in AUM by asset class for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 AUM Beginning Balance Inflows Outflows Net Flows Market Value Appreciation/ (Depreciation) Foreign Exchange Appreciation/ (Depreciation) AUM Ending Balance ($ in millions) Equity $ 167,395 $ 24,545 $ (31,097) $ (6,552) $ 28,125 $ 1,170 $ 190,138 Fixed Income 43,386 9,476 (9,192) 284 3,236 1,201 48,107 Other 5,344 5,233 (2,507) 2,726 290 46 8,406 Total $ 216,125 $ 39,254 $ (42,796) $ (3,542) $ 31,651 $ 2,417 $ 246,651 52 Inflows include approximately $3.9 billion related to a wealth management acquisition.
Year Ended December 31, 2023 AUM Beginning Balance Inflows Outflows Net Flows Market Value Appreciation/ (Depreciation) Foreign Exchange Appreciation/ (Depreciation) AUM Ending Balance ($ in millions) Equity $ 167,395 $ 24,545 $ (31,097) $ (6,552) $ 28,125 $ 1,170 $ 190,138 Fixed Income 43,386 9,476 (9,192) 284 3,236 1,201 48,107 Other 5,344 5,233 (2,507) 2,726 290 46 8,406 Total $ 216,125 $ 39,254 $ (42,796) $ (3,542) $ 31,651 $ 2,417 $ 246,651 Inflows include approximately $3.9 billion related to a wealth management acquisition.
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.
Percentage Changes December 31, 2024 vs 2023 2023 vs 2022 MSCI World Index 19 % 24 % Euro Stoxx 12 % 23 % MSCI Emerging Market 8 % 10 % S&P 500 25 % 26 % 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.
We focus on a ratio of adjusted compensation and benefits expense to operating revenue to manage costs, balancing a view of current market conditions alongside our objective to drive long-term shareholder value.
We focus on a ratio of adjusted compensation and benefits expense to adjusted net revenue to manage costs, balancing a view of current conditions in the market for talent alongside our objective to drive long-term shareholder value.
Net derivative assets amounted to $3 million and $15 million at December 31, 2023 and 2022, respectively, and net derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements amounted to $3 million and $1 million at December 31, 2023 and 2022, respectively.
Net derivative assets amounted to $4 million and $3 million at December 31, 2024 and 2023, respectively, and net derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements amounted to $3 million at both December 31, 2024 and 2023.
(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.
(c) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and provision for credit losses 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.
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.
Seed investments held in entities in which the Company maintained a controlling financial interest were $111 million in ten entities as of December 31, 2024, as compared to $114 million in eleven entities as of December 31, 2023.
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.
Business Summary Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia.
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.
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.
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.
As of December 31, 2024, approximately 18% of our AUM was managed on behalf of individual client relationships compared to 15% as of December 31, 2023. As of December 31, 2024, AUM with foreign currency exposure represented approximately 62% of our total AUM as compared to 64% at December 31, 2023.
Accordingly, Lazard measures performance in its Financial Advisory segment based on overall segment operating revenue and operating income margins. Financial Advisory Results of Operations Year Ended December 31, 2023 versus December 31, 2022 Financial Advisory net revenue decreased $281 million, or 17%, as compared to 2022.
Accordingly, Lazard measures performance in its Financial Advisory segment based on overall segment adjusted net revenue and adjusted operating income margins. Financial Advisory Results of Operations Year Ended December 31, 2024 versus December 31, 2023 Financial Advisory net revenue increased $371 million, or 27%, as compared to 2023.
The net activity in stockholders’ equity during the years ended December 31, 2023 and 2022 is reflected in the table below: Year Ended December 31, 2023 2022 ($ in millions) Stockholders’ Equity - Beginning of Year $ 675 $ 1,078 Increase (decrease) due to: Net income (loss) (a) (69) 378 Other comprehensive income (loss) 6 (72) Amortization of share-based incentive compensation 251 241 Purchase of common stock (102) (692) Settlement of share-based incentive compensation (b) (54) (55) Common stock dividends (173) (182) LFI Consolidated Funds (74) 18 Other - net 22 (39) Stockholders’ Equity - End of Year $ 482 $ 675 ________________________ (a) Excludes net income associated with redeemable noncontrolling interests of $12 million and $14 million in 2023 and 2022, respectively.
The net activity in stockholders’ equity during the years ended December 31, 2024 and 2023 is reflected in the table below: Year Ended December 31, 2024 2023 ($ in millions) Stockholders’ Equity - Beginning of Year $ 482 $ 675 Increase (decrease) due to: Net income (loss) (a) 281 (69) Other comprehensive income (loss) (37) 6 Amortization of share-based incentive compensation 278 251 Purchase of common stock (60) (102) Settlement of share-based incentive compensation (b) (66) (54) Common stock dividends (179) (173) LFI Consolidated Funds – (74) Other - net (14) 22 Stockholders’ Equity - End of Year $ 685 $ 482 ________________________ (a) Excludes net income associated with redeemable noncontrolling interests of $6 million and $12 million in 2024 and 2023, respectively.
Regulatory Capital We actively monitor our regulatory capital base. Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things, that we comply with rules regarding certain minimum capital requirements. These regulatory requirements may restrict the flow of funds to and from affiliates.
Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things, that we comply with rules regarding certain minimum capital requirements. These regulatory requirements may restrict the flow of funds to and from affiliates. See Note 22 of Notes to Consolidated Financial Statements for further information.
See the Consolidated Financial Statements—Consolidated Statements of Cash Flows for further detail. 55 Summary of Cash Flows: Year Ended December 31, 2023 2022 2021 ($ 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).
See the Consolidated Financial Statements—Consolidated Statements of Cash Flows for further detail. 56 Summary of Cash Flows: Year Ended December 31, 2024 2023 2022 ($ in millions) Cash Provided By (Used In): Operating activities: Net income (loss) $ 287 $ (57) $ 392 Adjustments to reconcile net income to net cash provided by operating activities (a) 440 463 551 Other operating activities (b) 16 (241) (110) Net cash provided by operating activities 743 165 833 Investing activities 134 (38) (56) Financing activities (c) (440) (1,571) (1,382) Effect of exchange rate changes (53) 30 (186) Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash 384 (1,414) (791) Cash and Cash Equivalents and Restricted Cash (d): Beginning of Period 1,225 2,639 3,430 End of Period $ 1,609 $ 1,225 $ 2,639 ________________________ (a) Consists primarily of amortization of deferred expenses and share-based incentive compensation, noncash lease expenses, depreciation and amortization of property, gain on sale of owned office building and deferred tax provision (benefit).
Private equity risk is not hedged due to lack of proxy hedging instruments. Fair value and sensitivity measurements presented herein are based on various portfolio exposures at a particular point in time and may not be representative of future results.
Private equity risk is not hedged due to lack of proxy hedging instruments. Fair value and sensitivity measurements presented herein are based on various portfolio exposures at a particular point in time and may not be representative of future results. Risk exposures may change as a result of ongoing portfolio activities and changing market conditions, among other things.
AUM with foreign currency exposure generally declines in value with the strengthening of the U.S. Dollar and increases in value as the U.S. Dollar weakens, with all other factors held constant.
AUM with foreign currency exposure generally declines in value with the strengthening of the U.S. Dollar and increases in value as the U.S.
Compensation and benefits expense increased $290 million, or 17%, as compared to 2022. Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,703 million, an increase of $46 million, or 3%, as compared to $1,657 million in 2022.
Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,903 million, an increase of $201 million, or 12%, as compared to $1,703 million in 2023.
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.
At December 31, 2024, total receivables amounted to $754 million, net of an allowance for credit losses of $32 million. As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 85% and 15% of total receivables, respectively.
Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers. 51 The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies”): As of December 31, 2023 2022 2021 ($ 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 $216 billion at December 31, 2022 due to market and foreign exchange appreciation, partially offset by net outflows.
Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers. 51 The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies”): As of December 31, 2024 2023 2022 ($ in millions) AUM by Asset Class: Equity: Emerging Markets $ 27,926 $ 25,288 $ 21,557 Global 49,058 53,528 46,861 Local 49,750 52,208 47,504 Multi-Regional 48,204 59,114 51,473 Total Equity 174,938 190,138 167,395 Fixed Income: Emerging Markets 6,919 9,525 8,944 Global 11,138 10,762 11,029 Local 5,617 6,080 5,352 Multi-Regional 19,612 21,740 18,061 Total Fixed Income 43,286 48,107 43,386 Alternative Investments 2,917 3,330 3,812 Private Wealth Alternative Investments 3,097 2,799 – Private Equity 1,514 1,623 1,038 Cash Management 569 654 494 Total AUM $ 226,321 $ 246,651 $ 216,125 Total AUM at December 31, 2024 was $226 billion, a decrease of $20 billion, or 8%, as compared to total AUM of $247 billion at December 31, 2023, due to net outflows and foreign exchange depreciation, partially offset by market appreciation.
See also “Critical Accounting Policies and Estimates—Revenue Recognition” above and Note 5 of Notes to Consolidated Financial Statements for additional information regarding receivables. LFG and LFB offer wealth management and banking services to high net worth individuals and families. At December 31, 2023 and 2022, customers and other receivables included $86 million and $129 million, respectively, of LFB loans.
See also “Critical Accounting Policies and Estimates—Revenue Recognition” above and Note 5 of Notes to Consolidated Financial Statements for additional information regarding receivables. LFG and LFB offer wealth management and banking services to high net worth individuals and families.
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.
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 2022 19,666,798 $ 35.17 2023 2,782,662 $ 36.67 2024 1,409,988 $ 42.20 As of December 31, 2024, a total of $200 million of share repurchase authorization remained available under Lazard, Inc.’s share repurchase program which will expire on December 31, 2026.
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.
Stockholders’ Equity At December 31, 2024, total stockholders’ equity was $685 million, as compared to $482 million and $675 million at December 31, 2023 and 2022, respectively, including $636 million, $424 million and $556 million attributable to 59 Lazard, Inc. on the respective dates.
Actual results may differ from these estimates. 59 The following is a description of Lazard’s critical accounting estimates and judgments used in the preparation of its consolidated financial statements. Revenue Recognition Lazard generates substantially all of its revenue from providing Financial Advisory and Asset Management services to clients.
The following is a description of Lazard’s critical accounting estimates and judgments used in the preparation of its consolidated financial statements. Revenue Recognition Lazard generates substantially all of its revenue from providing Financial Advisory and Asset Management services to clients. Lazard recognizes revenue in accordance with the criteria in Note 2 of Notes to Consolidated Financial Statements.
Year Ended December 31, 2023 2022 2021 ($ in thousands) Net Revenue $ 2,515,489 $ 2,773,571 $ 3,193,048 Operating Expenses: Compensation and benefits 1,946,010 1,656,451 1,895,859 Non-compensation 693,330 601,481 571,142 Provision (benefit) pursuant to tax receivable agreement (43,894) (1,209) 2,199 Total operating expenses 2,595,446 2,256,723 2,469,200 Operating Income (Loss) (79,957) 516,848 723,848 Provision (benefit) for income taxes (22,650) 124,365 181,303 Net Income (Loss) (57,307) 392,483 542,545 Less - Net Income (Loss) Attributable to Noncontrolling Interests 18,172 34,966 14,481 Net Income (Loss) Attributable to Lazard Ltd $ (75,479) $ 357,517 $ 528,064 Operating Income (Loss), as a % of net revenue (3.2) % 18.6 % 22.7 % The tables below describe the components of operating revenue, adjusted compensation and benefits expense, adjusted non-compensation expense, earnings from operations and related key ratios, which are non-GAAP measures used by the Company to manage its business.
Year Ended December 31, 2024 2023 2022 ($ in thousands) Net Revenue $ 3,051,837 $ 2,515,489 $ 2,773,571 Operating Expenses: Compensation and benefits 2,003,212 1,946,010 1,656,451 Non-compensation 670,390 693,330 601,481 Benefit pursuant to tax receivable agreement (8,237) (43,894) (1,209) Total operating expenses 2,665,365 2,595,446 2,256,723 Operating Income (Loss) 386,472 (79,957) 516,848 Provision (benefit) for income taxes 99,764 (22,650) 124,365 Net Income (Loss) 286,708 (57,307) 392,483 Less - Net Income Attributable to Noncontrolling Interests 6,796 18,172 34,966 Net Income (Loss) Attributable to Lazard $ 279,912 $ (75,479) $ 357,517 Operating Income (Loss), as a % of net revenue 12.7 % (3.2) % 18.6 % The tables below describe the components of adjusted net revenue, adjusted compensation and benefits expense, adjusted non-compensation expense, adjusted operating income and related key ratios, which are non-GAAP measures used by the Company to manage its business.
For a discussion of regulations relating to us, see Item 1, “Business—Regulation” included in this Form 10-K. Critical Accounting Policies and Estimates The preparation of Lazard’s consolidated financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
Critical Accounting Policies and Estimates The preparation of Lazard’s consolidated financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
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.
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. We use adjusted net revenue, a non-GAAP measure, for comparison of revenues between periods.
Year Ended December 31, 2022 AUM Beginning Balance Inflows Outflows Net Flows Market Value Appreciation/ (Depreciation) Foreign Exchange Appreciation/ (Depreciation) AUM Ending Balance ($ in millions) Equity $ 221,006 $ 23,495 $ (39,319) $ (15,824) $ (30,438) $ (7,349) $ 167,395 Fixed Income 46,286 9,890 (10,488) (598) (688) (1,614) 43,386 Other 6,447 2,645 (3,138) (493) (418) (192) 5,344 Total $ 273,739 $ 36,030 $ (52,945) $ (16,915) $ (31,544) $ (9,155) $ 216,125 Year Ended December 31, 2021 AUM Beginning Balance Inflows Outflows Net Flows Market Value Appreciation/ (Depreciation) Foreign Exchange Appreciation/ (Depreciation) AUM Ending Balance ($ in millions) Equity $ 209,732 $ 27,229 $ (44,372) $ (17,143) $ 34,730 $ (6,313) $ 221,006 Fixed Income 43,784 12,597 (8,517) 4,080 704 (2,282) 46,286 Other 5,126 3,005 (1,515) 1,490 (50) (119) 6,447 Total $ 258,642 $ 42,831 $ (54,404) $ (11,573) $ 35,384 $ (8,714) $ 273,739 Average AUM for the years ended December 31, 2023, 2022 and 2021 for each significant asset class is set forth below.
Year Ended December 31, 2022 AUM Beginning Balance Inflows Outflows Net Flows Market Value Appreciation/ (Depreciation) Foreign Exchange Appreciation/ (Depreciation) AUM Ending Balance ($ in millions) Equity $ 221,006 $ 23,495 $ (39,319) $ (15,824) $ (30,438) $ (7,349) $ 167,395 Fixed Income 46,286 9,890 (10,488) (598) (688) (1,614) 43,386 Other 6,447 2,645 (3,138) (493) (418) (192) 5,344 Total $ 273,739 $ 36,030 $ (52,945) $ (16,915) $ (31,544) $ (9,155) $ 216,125 53 Average AUM for the years ended December 31, 2024, 2023 and 2022 for each significant asset class is set forth below.
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.
As of January 24, 2025, our total outstanding share repurchase authorization was approximately $180 million. During the year ended December 31, 2024, Lazard, Inc. 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.
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.
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 evaluation of other strategic alternatives, the prudent management of our costs and expenses, the efficient use of our assets and the return of capital to our shareholders. 40 Certain industry-wide market data with respect to our Financial Advisory and Asset Management businesses is included below.
The capital markets advisory team advises both public and private issuers on the raising of capital, while the private capital advisory team provides fundraising and secondary advisory services for private equity, private credit, real estate and real assets-focused investment firms.
We also advise on both public and private debt and structured equity transactions, while the private capital advisory team provides fundraising and secondary advisory services for private equity, private credit, real estate and real assets-focused investment firms.
We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments or private equity investments, and make investments to seed our Asset Management strategies.
We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments or private equity investments, and make investments to seed our Asset Management strategies. See “Business Segments” below for discussion of the adjusted operating results of our Financial Advisory, Asset Management and Corporate segments.
(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, distributions to redeemable noncontrolling interests associated with LGAC’s redemption of all its outstanding Class A ordinary shares in 2023, and contributions from redeemable noncontrolling interests and payments of underwriting fees and other offering costs associated with the LGAC IPO in 2021.
(c) Consists primarily of purchases of shares of common stock, tax withholdings related to the settlement of vested RSUs and vested PRSUs, common stock dividends, changes in customer deposits, distributions to noncontrolling interest holders, activity related to borrowings (including in 2024, the issuance of the 2031 Notes and redemption of the 2025 Notes), distributions to redeemable noncontrolling interests associated with LGAC’s redemption of all its outstanding Class A ordinary shares in 2023.

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