And so, that’s going well. We’re continuing to work on that. And it’s — as much as anything, it’s us learning how to really apply what we think our real capabilities to the clients, and therefore, adding value that they think is worthwhile.
Devin Ryan: Great. Thank you.
Operator: Thank you. Our next question will come from Steven Chubak with Wolfe Research. Your line is open.
Brendan O’Brien: Good morning. This is Brendan O’Brien filling in for Steven. So, I wanted to ask on the comp ratio. Given all the uncertainties surrounding the outlook and with backlogs entering the year at a weaker level this year than last, it feels like comp ratios are likely to persist into at least the first half. At the same time, it sounds like the impact of your DCCP hedge was a significant driver of the incremental comp ratios seen this year. So I wanted to get a sense as to whether the 61% accrual levels seen this year should be a good place to start for next? And also I was hoping if you could help frame how we should be thinking about incremental comp leverage from here. Your full year comp expense was down about 8% versus a 16% decline in your overall revenues. Would you expect that same dynamic to hold in 2023?
Celeste Mellet: Thanks for your question. So, comp — the comp ratio will continue to be driven by revenue in this environment. And we will set the ratio and share it with you in April. And that will be based at that time not on one quarter, but it’s based on our estimate for the year at that time, so our outlook for the full year. As a reminder, our SMDs are paid by performance largest part of our comp expense. However, base benefits and other things become more meaningful in this environment. But as you can see, we’ve reduced our headcount quarter-on-quarter and since June we’re more aggressively managing our lower performers. We’re limiting additional headcount and replacement hiring and we’ll continue to do so as long as the environment remains weak.
However, we will continue to invest in A-plus talent. And really the comp ratio will be how all of those things come together and we’ll be really thoughtful about all of those based on what the revenue environment looks like and what we think the opportunities are for us to invest in the future of the franchise.
John Weinberg: Just one additional comment which is that, the comp ratio is really going to be impacted most of all by revenues and revenue growth. And with respect to our backlog, our backlog is strong. And the real variable in my mind is that deals — that backlog and our ability to realize that backlog into revenue at this point is really influenced by what has been an environment where it’s taken longer to get deals done and it’s all been extended. And so the real question is, what I would say the realization rate of that backlog because backlog is strong, and if we’re able to start to see an acceleration of that realization rate, I actually think you’ll see the revenue comp go up and I think you’ll see us take a lot of the pressure off of the comp ratio.
Brendan O’Brien: That’s great color. Thank you, both.
Operator: Thank you. Our last question will come from Manan Gosalia with Morgan Stanley. Your line is open.
Manan Gosalia: Hey. Good morning. John, you noted that dialog with clients is still pretty active, particularly on the strategic side. So any differentiation you’re seeing in terms of deal size? I know that higher antitrust scrutiny is not new, but is that still weighing on large deal activity? And are you seeing more dialog in smaller deals right now?
