Ever since the Lazard board of directors announced some two weeks ago that, after 14 years, Peter Orszag, the well-liked, Obama-era budget chief, would succeed Ken Jacobs as C.E.O. I’ve been waiting to read the bank’s 8K, as one does. After all, this disclosure of a material, unscheduled switcheroo to the S.E.C. is often the best lens through which to gauge the board-level machinations at a public company, offering far more meaningful revelations than the pablum that its phalanx of “comms people” release or leak to the Journal or to the FT. And, in that regard, the new Lazard filing doesn’t disappoint. In fact, it contained a series of surprises about Orszag’s ascension, including a more complex organizational structure, and an apparent series of compromises and half-moves.
Surprise one: The leadership change is not happening until October 1. And surprise two: Jacobs isn’t going anywhere. Not only will he become the executive chairman of the Lazard board of directors, he will also be sticking around Lazard and returning to the role of M&A dealmaker, with “a primary focus on clients and business development,” according to the 8K. Previously, Jacobs was the chairman of the Lazard board; now he becomes “executive chairman” of the board, a distinction, perhaps, but unlikely one of much significance.
Surprise number three: Jacobs will not be reporting to Orszag. Instead, he will continue to report to the Lazard board, just as he did when he was C.E.O. But he will also be chairman of the same board to which he reports. And Orszag will also report to the board of directors and not to Jacobs, despite the fact that Jacobs is the executive chairman of that board. So now Jacobs is in quite an unusual position: He’ll be akin to a newly hired star banker, focusing entirely on clients, while also being the executive chairman of the board, to which the new C.E.O. also reports while not reporting to the new C.E.O. His compensation, I gather, will be set by the board in consultation with Orszag. A real head-scratcher and governance conundrum. And so very Lazard.