Operator: Thank you. Next, we have Brennan Hawken with UBS.
Ben Rubin: Hi guys, this is Ben Rubin filling in for Brennan. Congrats on a strong close to the year. My question is related to the incremental hires from last year. So the 11 Advisory SMDs that you’ve added, what is the best way to think about the incremental operating leverage from your successful recruiting campaign last year? And how should we think about the corresponding impact of revenue growth as a result of those hires as well as the increase in your baseline comp as a result? So for example, if Advisory revenue is up x percent, what type of impact to comp growth could we expect as a result? Thank you.
John Weinberg: Well, let me take the first part of the question, and I’ll let Tim take the second. The people we’ve hired, we’re really excited about. And in some cases, they’re already hitting the ground running and revenues coming in as a result of their presence inside the firm. For the most part, you should think of people coming in, in the ramp. And usually, it takes between year and half to two years for a full ramp-up. Some of the people that we’ve brought in, as I said, are not going to take nearly that long. But I think you should think about it as a consistent ramping of these talented people coming in. And so the revenue growth will happen. As you also know, this business is somewhat lumpy. You bring in a couple of big deals and then there’s a little bit of time between the next couple of deals.
And so I think that for the most part, what you should be looking at is the consistent addition of talented people. And over time, that should lead to build in our revenue base. In terms of revenue per banker, that all very much depends on really the market itself and how busy and how active the market is our levels of revenue per banker go up materially as the revenue goes up in the aggregate.
Tim LaLonde: Sure. And I can just expand on that a little bit by putting a few numbers around it. One would be if you look at our Advisory partner headcount, and you compare it to 2021, which was our peak revenue year, you would see the Advisory partner headcount has increased almost 20% and that’s a reflection of a potential increase in productive capacity. If you were to go back three years to 2020, you would have seen our Advisory partner headcount has increased about 27%. And so that’s, we think, good news for us when the market returns to more normal activity levels. Beyond that, I would point out that while we were doing those 11 partner headcount adds this year, our overall headcount firm wide was up 3.7%, which is by historical standards for us, a relatively modest amount.
And both of those statistics speak a little bit to productivity. We look at productivity two ways. One is on a revenue per partner basis, and another is on a revenue per banker basis, both of which ultimately impact margins throughout a cycle. And so, we think what we’ve done there is hopefully in the process of rigorously managing our headcount, increased productivity as we head into, hopefully, a more favorable environment. If you look at the partner revenue statistics productivity, what you would see is generally across the cycle, you would see those ranging anywhere from ballpark $15 million or $16 million per Advisory partner head on the lower end to the low 20s. 2021 was an outlier, was north of $25 million per partner head. But generally, in a good market, they peak somewhere in the low 20s for us per partner head.
And so we feel like we’re well positioned for when the market returns.
Operator: [Operator Instructions] And our next question will come from Devin Ryan with JMP Securities.
Devin Ryan: Okay, thanks so much. Good morning John and Tim. I just want to dig in a little bit on the strategic versus sponsor dynamic. In 2023, sponsor announcements were down about 40% year-over-year. That was the slowest year since 2013. Corporates from our data were roughly flat year-over-year. And so I know Evercore does quite well with corporates and perhaps corporates are having a moment with sponsors being a little bit out of the market. But just wanted to get a little sense from you around whether a sponsor recovery is necessary for kind of a broader recovery for Evercore. Are you seeing that right now or can you continue to do quite well with corporates, which may be, as I mentioned, seem to be behaving better in this backdrop? Thanks.
John Weinberg: Sure, Devin. We believe that the full recovery of the market is going to require that sponsors really start to engage. We see a warming up of the sponsors but as you said, in 2023, it was slow. And we think 2024, we think there will be — as there will be on the strategic side, we think there will be a ramp. We have gotten ourselves off to a very good start on the strategic side. We’ve done some very strong strategic type transactions and frankly, inside the firm, the dialogues are very good. The backlogs are building. I think that the sponsors may be delayed, but we really do believe they will begin to start kicking in. There’s a lot of pressure at the sponsor level to start doing some activity. LPs want capital back.
