Corporate Governance Matters

	Robert E. Joyal Director since 2013 Committees ●Compensation ●Nominating and Corporate Governance (chair) ●ESG Oversight Committee	Relevant Skills
		●Audit & Financial Expertise ●Corporate Strategy & Business Development ●Corporate Governance ●Ethics/Social Responsibility Oversight	●Financial Services ●Executive Leadership & Management ●Private Equity ●Risk Oversight ●Expertise in Portfolio Company Related Industry

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Corporate Governance Matters

	Jacob M. Katz Director since 2018 Committees ●Audit (chair) ●Risk and Liquidity Oversight ●Valuation Oversight ●ESG Oversight Committee	Relevant Skills
		●Audit & Financial Expertise ●Corporate Strategy & Business Development ●Corporate Governance ●Ethics/Social Responsibility Oversight ●Financial Services ●International Business & Operations	●Executive Leadership & Management ●Mergers & Acquisitions ●Private Equity ●Risk Oversight ●Expertise in Portfolio Company Related Industry

Corporate Governance Matters

	Michael T. O’Kane Lead Independent Director Director since 2013 Committees ●Compensation ●Nominating and Corporate Governance ●Valuation Oversight (chair)	Relevant Skills
		●Audit & Financial Expertise ●Corporate Governance ●Financial Services ●Executive Leadership & Management	●Private Equity ●Risk Oversight ●Expertise in Portfolio Company Related Industry

Key Qualifications

Mr. O'Kane's years as a director of Jefferies Group from January 2006 through April 2014 and since November 2018 and his managerial and investing experience in the financial sector, particularly in the area of asset management, brings oversight to our merchant and financial services businesses. His additional experience serving on the boards of directors and committees of both public and private companies qualifies him for service on our Board.

Professional Highlights

From 1986 to 2004, Mr. O’Kane served in various capacities for TIAA, first as a Managing Director – Private Placements from 1986 to 1990, then as Managing Director – Structured Finance from 1990 to 1996 and finally as Senior Managing Director – Securities Division from 1996 to 2004, when he was responsible for approximately $120 billion of fixed income and $3.5 billion of private equity assets under management.

Other Engagements

Since August 2005, Mr. O’Kane has also served on the Board of Directors of Assured Guaranty, is currently serving on its Audit Committee, is Chair of its Finance Committee and was previously a member of its Risk Oversight Committee. In addition, Mr. O’Kane served on the Board of Trustees of Scholarship America, a non-profit company engaged in providing scholarships for young students to attend college, from 2001 to 2006. Mr. O’Kane was also the Chief Financial Officer of Motor Coils Manufacturing Company during 1984 and 1985.

Education

Mr. O’Kane received an M.B.A. in Finance from Rutgers Graduate School of Business and an A.B. in Economics from Lafayette College.

2020 Proxy Statement

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Corporate Governance Matters

	Stuart H. Reese Director since 2013 Committees ●Audit ●Risk and Liquidity Oversight	Relevant Skills
		●Audit & Financial Expertise ●Corporate Strategy & Business Development ●Corporate Governance ●Ethics/Social Responsibility Oversight ●Financial Services	●Executive Leadership & Management ●Mergers & Acquisitions ●Risk Oversight ●Expertise in Portfolio Company Related Industry

Key Qualifications

Mr. Reese’s directorship of Jefferies Group since November 2018 and his managerial and investing experience in the insurance and investment management sectors brings oversight to our Merchant Banking and financial services businesses. His additional experience serving on the boards of directors of both public and private companies qualifies him for service on our Board.

Professional Highlights

Mr. Reese has served as Chairman of MassMutual from 2007 through 2010 and as its CEO and President from 2005 through 2009. Prior to 2005, Mr. Reese served as Executive Vice President and Chief Investment Officer of MassMutual. Mr. Reese also held various leadership positions at several MassMutual subsidiaries, serving as Chairman and CEO of Babson Capital Management LLC, Chairman of Cornerstone Real Estate Advisers LLC and as a director of Oppenheimer Acquisition Corporation. Mr. Reese joined MassMutual in 1993, coming from Aetna Life and Casualty Company. Mr. Reese also previously served as director of the Federal Reserve Bank of Boston.

Other Engagements

Mr. Reese serves on the Board of Directors of the Lahey Clinic Foundation, a not-for-profit organization affiliated with Lahey Hospital & Medical Center.

Education

Mr. Reese received an M.B.A., with high distinction, at the Amos Tuck School of Business Administration at Dartmouth College and a B.A. in Biology from Gettysburg College.

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Corporate Governance Matters

	Joseph S. Steinberg Chairman Director since 1978 Committees ●None	Relevant Skills
		●Audit & Financial Expertise ●Corporate Strategy & Business Development ●Corporate Governance ●Ethics/Social Responsibility Oversight ●Financial Services ●International Business & Operations	●Executive Leadership & Management ●Mergers & Acquisitions ●Private Equity ●Risk Oversight ●Expertise in Portfolio Company Related Industry

Key Qualifications

As our Chairman and with over 40 years of executive leadership experience with us, Mr. Steinberg has the requisite managerial and investing experience necessary to continue as one of our senior executives. Mr. Steinberg has been a director of Jefferies Group since April 2008 and his extensive experience with our other portfolio companies and investments and experience on the boards of directors and committees of both public and private companies qualify him for service on our Board.

Professional Highlights

Mr. Steinberg has served as a director since December 1978, our Chairman since March 2013 and was our President from January 1979 until March 2013.

Other Engagements

Mr. Steinberg currently serves on the Board of Directors of Crimson Wine Group, Ltd., which was spun off to our shareholders in February 2013.

Previously, he served as our representative as a board member overseeing our investments in HomeFed Corporation and Spectrum Brands Holdings, Inc. through 2019 and as a director of Fidelity & Guaranty Life from 2015 to 2017.

Education

Mr. Steinberg received an M.B.A. from Harvard Business School and an A.B. in Government from New York University.

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Board Skills & Experience and Demographic Matrix

Skills & Experience

Audit & Financial Expertise

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Corporate Strategy & Business Development

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Corporate Governance

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Ethics/Social Responsibility Oversight

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Financial Services (Incl. Asset Management & Investment Banking)

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International Business & Operations

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Executive Leadership & Management

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Mergers & Acquisitions

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Private Equity

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Risk Oversight

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Expertise in Portfolio Company Related Industry

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Demographic Background

Years on Board

6

1

7

6

7

1

7

7

1

7

7

41

Gender

Male

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Female

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Age

At March 3, 2020

67

79

60

68

64

55

58

75

67

74

64

76

Race/Ethnicity

African American/Black

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Asian, Hawaiian, or Pacific Islander

White/Caucasian

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Hispanic/Latino

Native American

Other

Number of Non-Portfolio Company Outside Public Boards

2

1

1

2

0

1

0

2

1

1

0

1

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The Nominating and Corporate Governance Committee is committed to a policy of inclusiveness and seeks members with diverse backgrounds, an understanding of our business and a reputation for integrity. Our director refreshment over the last several years has resulted in a diverse group of independent directors with low average tenure, gender diversity and significant experience. We strive to continue to improve those numbers as we move forward.

Risk Oversight

Our Board of Directors is responsible for the general oversight of risks that affect us. To further strengthen and add more focus to that responsibility, in 2018 our Board formed a new Risk and Liquidity Oversight Committee, which is chaired by Linda Adamany and which has as its members MaryAnne Gilmartin, Jack Katz and Stu Reese. The Risk and Liquidity Oversight Committee oversees Jefferies’ enterprise risk management framework; approves risk management policies; monitors major risk exposures, including among others investment risk, capital risk, funding risk, liquidity risk, new product and business risk, cybersecurity risk, legal and regulatory risk, environmental risk and reputational risk; and oversees management’s controls relating to engaging in risk.

Part of the Board’s risk responsibilities involves approval of certain investments. Our Board must be consulted with and approve potential investments that require expenditure above $150 million. The Board has delegated to any two of Messrs. Handler, Friedman and Steinberg, acting together, approval to make investments below that threshold.

Our Board also fulfills its risk oversight role through the operations of its various committees. Our Board receives periodic reports on each committee’s activities. The Audit Committee has responsibility for risk oversight in connection with its review of our financial reports filed with the SEC. The Audit Committee receives reports from our CFO, our internal audit department and our independent auditors in connection with the review of our quarterly and annual financial statements regarding significant financial transactions, accounting and reporting matters, internal control over financial reporting, critical accounting estimates and management’s exercise of judgment in accounting matters. When reporting on such matters, our independent auditors also provide their assessment of management’s report and conclusions. Our Audit Committee receives reports from our Chief Compliance Officer in accordance with our Whistle Blower Policy. Our Audit Committee also oversees our Related Person Transaction Policy. Additionally, with respect to Jefferies Group, its risk management team continuously monitors its various business groups, the level of risk they are taking and the efficacy of potential risk mitigation strategies and presents such information to Jefferies Group’s senior management and our Board.

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Corporate Governance Matters

Environmental, Social and Governance Matters NEW

We are very pleased to announce that our Board of Directors has formed an Environmental, Social and Governance (“ESG”) Oversight Committee, which is chaired by Barry Alperin and which has as its members Linda Adamany, Frank Borges, MaryAnne Gilmartin, Bob Joyal and Jack Katz. Under the Committee’s guidance, we are conducting a formal ESG assessment, substantially enhancing our ESG disclosures, and establishing ESG roles and responsibilities. The first formal ESG disclosures will be published on our website in April 2020.

Establishing the ESG Oversight Committee demonstrates our continuing commitment to sustainable economic development and recognizes the impact our businesses have on the world. For us to continue to prosper, the value we create and grow for our shareholders must be sustainable. We believe in making a positive difference in the communities in which we live and work, and strive to discharge our corporate social responsibilities from a global perspective and throughout every aspect of our operations. Our Board carefully considers the impact on the environment, people and the communities of which we are a part in deciding how to conduct our business and where and whether to invest our assets.

Lead Director Position and Duties

Mr. O’Kane was appointed by our Board of Directors in February 2017 to serve as our Lead Director.

Director Independence

In accordance with our Corporate Governance Guidelines, available on our website, Jefferies.com, our Board of Directors undertook its annual review of director independence. During this review, our Board considered all transactions and relationships between us and each nominee for director or any member of such person’s immediate family. The purpose of this review is to determine whether any relationship or transaction is considered a “material relationship” that would be inconsistent with a determination that a director is independent.

Our Board affirmatively determined that each of our non-employee director nominees is independent. In making this determination, our Board reviewed the corporate governance rules of the NYSE, the principal exchange on which our shares are traded, and considered commercial, charitable, family and other relationships that directors or members of their immediate family have or have had with us. In addition, for our Audit Committee members, our Board also considered the requirements of Rule 10A-3 under the Exchange Act.

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Corporate Governance Matters

In particular, our Board considered the following relationships: Mr. Reese previously served (prior to 2011) as President and Chief Executive Officer of MassMutual, a holder of our Series A Cumulative Convertible Preferred Stock and a commercial finance joint venture partner with Jefferies Group; and Messrs. Joyal and Reese were associated with each other in connection with their prior employment with MassMutual. Additionally, our Board considered that certain Board members share directorships on unaffiliated, third-party boards.

Our Board has determined that these relationships are not material relationships and therefore do not affect our Board’s determination of independence.

Executive Sessions

Our Board has determined that our independent directors will meet regularly in executive session outside the presence of management. No formal Board action may be taken at any executive session. Our Lead Director presides over each executive session and has the authority to call such meetings.

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Key Responsibilities

Key Responsibilities

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Key Responsibilities

Key Responsibilities

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Key Responsibilities

Key Responsibilities

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Corporate Governance Matters

Board Practices, Processes and Policies

Corporate Governance Initiatives

Over the last few years, we made multiple corporate governance enhancements to strengthen our Board’s independence, ensure robust risk oversight and bolster alignment, communication and transparency with our shareholders.

Enhancements

New Committee ESG Oversight Committee NEW				Our Board of Directors has formed an ESG Oversight Committee. Under the Committee’s guidance, we are conducting a formal ESG assessment, substantially enhancing our ESG reporting and disclosures, and establishing ESG roles and responsibilities. The first formal ESG reporting and disclosures will be published on our website in April 2020.
Mirrored Boards				In the fourth quarter of 2018, the respective boards of Jefferies and Jefferies Group created mirrored boards – meaning the boards of Jefferies and Jefferies Group are comprised of the same people. Mirroring the boards has resulted in more efficiency as the same highly skilled directors oversee both Jefferies and our largest operating subsidiary, Jefferies Group.
Risk and Liquidity Oversight Committee Valuation Oversight Committee				In 2018, our Board created a Risk and Liquidity Oversight Committee and a Valuation Oversight Committee. The Risk and Liquidity Oversight Committee monitors major risk exposures, including, among others, investment risk, capital risk, funding risk, liquidity risk, cybersecurity risk, new product and business risk, legal and regulatory risk, environmental risk and reputational risk. The Valuation Oversight Committee oversees our semi-annual valuation performed by management and oversees the selection of and results produced by third-party evaluation firms.
Shareholder Proxy Access				We adopted shareholder proxy access that allows our shareholders to include director nominations in our annual Proxy Statement. The features of our by-laws reflect standard market practice, including:
				3% for 3 years		20% of the Board		●Shareholder-submitted nominations that satisfy the requirements in our by-laws are included in our Proxy Statements.
				●Shareholders holding 3% of our outstanding shares for 3 years may nominate candidates		●Shareholders can aggregate up to 20 holders to meet ownership requirement ●Shareholders may nominate at least 2 candidates (or up to 20% of the size of our Board if greater)

Individual Director Assessments				We enhanced our annual Board evaluation process to require individual director assessments, administered by the Chair of the Nominating and Corporate Governance Committee.
CEO and President Stock Ownership Guidelines				We adopted ownership guidelines for our CEO and President which require each to accumulate an ownership position in our equity securities with a value equal to at least 10-times the executive’s salary.
Minimum Holding Periods of Vested Equity				We approved holding periods requiring our CEO and President to hold at least 75% of after-tax shares until the expiration of three years after vesting or until retirement (50% of after-tax shares for all other named executive officers).
CEO and President Evaluations				We enhanced and formalized our Board’s performance evaluation process for our CEO and President.
Corporate Social Responsibility Principles				We reconfirmed our commitment to social responsibility, charging management with implementing a process to evaluate our corporate conduct in light of our published principles.
Shareholder Engagement				We engage in rigorous shareholder outreach to better understand shareholder concerns and determine the best path to constructively respond to them.
Increased Director Stock Ownership Guidelines				We amended our Corporate Governance Guidelines to require each director within five years of joining our Board to accumulate an ownership position in our equity securities with a value equal to five times the director’s annual cash retainer (an increase from three times the director’s annual cash retainer).

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Corporate Governance Matters

Earlier Enhancements

Appointment of Lead Director			We created the position of Lead Director and amended our Corporate Governance Guidelines to clearly delineate the Lead Director’s responsibilities.
Majority Voting			We amended our by-laws to require majority voting in connection with uncontested director elections to work in conjunction with our previously adopted director resignation policy.
Board Refreshment			We reconstituted our Board of Directors during 2013 and 2014, and again in 2018, ultimately increasing the number of seats from eight to 12, with a total of 11 new directors since March 2013, 9 of whom are independent.
Clawback Policy			We approved a policy allowing our Compensation Committee to claw back performance-based and discretionary awards if an underlying performance or other metric considered by the Compensation Committee in approving an award is corrected, adjusted or deemed to be false.
Prohibition on Hedging			We imposed a prohibition on the hedging of our shares and other securities by our directors, executives and employees.
Independent Compensation Consultant			Our Compensation Committee retained Mercer (US) Inc. as its independent compensation consultant to review our historical compensation and related practices, examine relevant peer and industry practices and advise the Compensation Committee on how best to structure our performance-based and other compensation programs going forward.

Additional information about changes to our compensation policies and practices is contained in our Compensation Discussion and Analysis section of this Proxy Statement.

Majority Voting and Director Resignation Policy

Our by-laws require that each director in an uncontested election be elected by the affirmative vote of a majority of the votes cast with respect to such director. We previously adopted a director resignation policy, which is incorporated into our Corporate Governance Guidelines. Pursuant to this policy, in an uncontested election of directors, any incumbent director nominee who does not receive the affirmative vote of a majority of the votes cast is required to promptly tender his or her resignation to our Board of Directors. A director nominee will have failed to receive the affirmative vote of a majority of votes cast if the number of "against" votes in respect of such director nominee’s election exceeds the number of votes "for" such director nominee’s election (excluding abstentions and broker non-votes). An election is considered "uncontested" if the number of director nominees does not exceed the number of directors to be elected.

Our Board of Directors will decide, after considering the recommendation of the Nominating and Corporate Governance Committee, whether to accept or reject a tendered resignation. The nominee in question will not participate in the recommendation or decision-making process. Our Board’s explanation of its decision will be publicly disclosed within 90 days from the date of publication of the election results. The Nominating and Corporate Governance Committee and our Board of Directors may consider any factor deemed appropriate during this process.

Anti-Hedging Policy

Our Insider Trading and Anti-Tipping Policy expressly prohibits hedging transactions involving our securities and those of our subsidiaries by our directors, executive officers and all other employees. We believe that hedging against losses in our securities breaks the alignment between our shareholders and our executives that equity grants are intended to build. Our anti-hedging policy also prohibits direct and indirect short selling and derivative transactions involving our securities, other than the exercise of any options or warrants issued by us to our employees or directors.

Related Person Policy and Transactions

Our Board has adopted a written policy for the review, approval and ratification of transactions that involve related persons and potential conflicts of interest. Our Related Person Transaction Policy applies to the following Related Persons: each of our directors and executive officers, any security holder who is known to own more than five percent of our shares, any immediate family member of any of the foregoing persons, any entity of which one of our directors is a director or officer (other than when serving at our request), and any entity of which one of our directors has a substantial financial interest (other than through us).

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Corporate Governance Matters

Under our Related Person Transaction Policy, a covered transaction includes a transaction or arrangement involving a Related Person in which we are a participant or that would require disclosure in our filings with the SEC as a transaction with a Related Person.

Under our Related Person Transaction Policy, Related Persons must disclose to the Audit Committee any potential covered transaction and must disclose all material facts with respect to such interest. All covered transactions will be reviewed by the Audit Committee and, in its discretion, approved or ratified. In determining whether to approve or ratify such a transaction, the Audit Committee will consider the relevant facts and circumstances which may include factors such as the relationship of the Related Person with us, the materiality or significance of the transaction to us and the Related Person, the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to us on an arms-length basis and the impact of the transaction on our business and operation.

Prior to the combination of Jefferies and Jefferies Group in 2013, Jefferies Group invested in private equity funds managed by companies controlled by Mr. Friedman and acquired interests in the profit participation earned from these funds. The management companies (Fund Managers) serve as the investment advisers of the private equity funds (Private Equity Funds) and have varying profit participations and other interests in those funds. Mr. Friedman founded the business of the Fund Managers in 1994 before he became associated with Jefferies Group; and, the Board of Jefferies Group approved these arrangements years prior to consummation of our transaction with Jefferies Group.

As of November 30, 2019, Jefferies Group had committed an aggregate of approximately $146.8 million to the Private Equity Funds, out of which approximately $128.6 million was funded and $7.3 million was terminated. As of November 30, 2019, Jefferies Group had committed an aggregate of $9.8 million to a Fund Manager, out of which approximately $5.8 million was funded and $3.4 million was terminated. As a result of those investments, commitments and profit participations, Jefferies Group received distributions from the Private Equity Funds and Fund Managers in fiscal year 2019 of approximately $4.4 million.

Included in the $841 million in total equity committed to the Private Equity Funds over which Mr. Friedman has control are individual investments of certain of our named executive officers. As a result of their individual commitments, as of November 30, 2019, Mr. Handler had an aggregate invested interest in the total committed capital in these Private Equity Funds of 0.2% and Mr. Friedman had an aggregate invested interest of 7.9%. In addition, Mr. Friedman has a substantial economic interest in the Fund Managers and, directly and indirectly, in the carried interest paid by the Private Equity Funds.

We employ certain former employees of the Fund Managers who continue to partially work for the Fund Managers under an arrangement Jefferies Group originally entered into with Mr. Friedman and a Fund Manager in 2005 and a related agreement we entered into during 2014. In fiscal year 2019, the Fund Manager paid us approximately $0.8 million for the direct and indirect costs attributed to employees’ work performed for the Fund Managers

We employ Thomas E. Tarrant, the brother-in-law of our Chief Executive Officer, as Jefferies Group’s Head of Marketing since 1997, three years before Mr. Handler was appointed CEO of Jefferies Group. For his services during Jefferies Group’s fiscal year 2019, Mr. Tarrant was paid $283,000.

We allow our executives and directors to invest in funds managed by us on the same terms offered to other investors. At November 30, 2019, Messrs. Friedman, Steinberg and Handler had interests worth approximately $3.6 million, $0.4 million and $3.9 million, respectively, in such funds.

In November 2019, Mr. Steinberg, our Chairman and one of our directors, and certain of his family trusts purchased our interests in a hotel and restaurant in Telluride, Colorado that we owned by delivering to us 780,315 shares of our common stock (with a value at the time equal to approximately $16,410,000). As part of the transaction, we contributed $612,924 to the capital account of the sold assets. The foregoing arrangements have been approved by our Board and applicable Committees in accordance with our related person transaction policy.

Engagement of Independent Compensation Consultant

Our Compensation Committee retained Mercer (US) Inc. as an independent compensation consultant to assist the Compensation Committee with conducting a thorough review of our executive compensation practices, including a review of our historical compensation and related practices, an examination of relevant peer and industry practices and recommendations on how best to structure our performance-based and other compensation practices going forward.

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Our Compensation Committee considered whether any conflicts of interest would arise due to its fiscal year 2019 engagement of Mercer. During 2018, we paid Mercer $128,000 for executive and director compensation consulting services and paid Mercer and its affiliates $430,399 for other services. The decisions to use Mercer and its affiliates for these other services are made in the ordinary course of our business and are generally recommended by our business department heads with the approval of management. We view these engagements as unrelated to our Compensation Committee’s engagement of Mercer and we do not require the Compensation Committee or our Board to review each use of Mercer or its affiliates for such purposes. The Compensation Committee also considered that the Mercer consultants providing services to the Compensation Committee do not benefit economically from the provision of the non-executive compensation services and work in a different office separate from the part of Mercer that provides the other services. The Compensation Committee reviewed and analyzed Mercer’s services to and compensation from us prior to its engagement and all other factors deemed relevant and required by SEC rules and concluded that the proposed engagement of Mercer by our Compensation Committee for executive compensation work did not raise a conflict of interest and that Mercer remained independent.