Peter Orszag: Let me give you a little bit on the outlook and then maybe Mary Ann will do something on the comp ratio. As you note, you asked an impossible question, so thank you for acknowledging that. What I would say is we do expect — just based on the constructive dialogue among clients, we expect ’24 to be better than ’23. The question becomes how much, and that’s very difficult to predict right now. I do think there are reasons that we believe Lazard has some advantages relative to the market. So one way of thinking about it is whatever your view is of the market, why could Lazard potentially perform better than that without taking a view on exactly when the market completions pick up. And I’d point to a few. One is the investment in our coverage of private capital at large, especially our Lazard Capital Solutions, which is getting a significant amount of demand and creating the positive flywheel effect that we were hoping for from creating that group.
The second is our excellence in geopolitical. In today’s world, I think it’s clear that it’s impossible to make a significant business decision without insight into geopolitics. Lazard is always — it’s part of our DNA to stand out along that domain and all the more so with our first-in-class geopolitical advisory team. The third is that to the extent that the Europe, U.S. M&A trade does pick up, that’s something that Lazard has, given that we’re strong in both continents, we’ll naturally benefit from. And then the fourth is what I mentioned with regard to the elevated share of newer MDs. So those are some reasons why you may see different performance from Lazard relative to the market. But with regard to the market as a whole, it’s, as you pointed out, almost impossible to know.
I would just go back to what I said earlier, which is there clearly is a shift in the tone of client discussions that are more constructive today than they were 6 or 9 months ago. Mary Ann, you want to comment?
Mary Ann: Yes. I’ll take the invitation of the comp ratio. So I mean you’re seeing this year the effects not only of lower revenues but also of the sort of lagged deferrals that we had in ’21 and ’22, ’21 being a record year of revenue. So we have sort of elevated comp that’s deferred into this year, and we’ll continue to see some of that in ’24 as well. But I really do think it’s going to come down to the revenues in that, as Peter laid out, we’re hopeful but there’s uncertainty there. So the cuts that we designed earlier this year were really meant to create the room, not only to invest in areas where we see growth, but also to allow us to get back to our target ranges when the revenues have normalized. And so that’s sort of still how we’re thinking about it, and we’re going to see how revenues — how quickly revenues come back.
Operator: We’ll take our next question from Ryan Kenny with Morgan Stanley. Please go ahead. Your line is open.
Ryan Kenny: Thanks for all the detail in the prepared remarks. Just wanted to follow up on that comp ratio commentary. So you mentioned that a component of the revenue growth plan is to expand MD count partially from promotions, partially from lateral hires. Can you just give us an update on what the recruiting environment is like? I know earlier in the year, we’ve been hearing from the peer group that it was a strong recruiting environment. Does recent optimism on M&A rebound may get harder to recruit? And could that put more pressure on the comp ratio near term?
