What changed in this filing

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Item 1A. Risk Factors

2025-02-24 compared with 2024-02-23 · 118 added, 114 removed, 423 unchanged (35% of the section changed)

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You should carefully consider this summary, together with the more detailed description of each risk factor contained below.

• Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the assets we manage in our Asset Management business.

• Difficult market conditions can adversely affect our business in many ways, including by reducing the volume or value of transactions involving our Financial Advisory business and reducing the value or performance of the assets we manage in our Asset Management business.

• Consequences of geopolitical conditions, military conflicts, wars and acts of terrorism could adversely affect our business, financial condition and results of operations.

• Fluctuations in foreign currency exchange rates could reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM.

• Fluctuations in foreign currency exchange rates have in the past, and could again in the future, reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM.

• Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios.

• Our business, financial condition and results of operations could be materially adversely affected by pandemics.

• Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business.

• Due to the nature of our business, financial results could differ significantly from period to period, which may make it difficult for us to achieve steady earnings growth on a quarterly basis.

• Our ability to retain and attract managing directors and other key professional employees, including maintaining compensation levels at an appropriate level, is critical to the success of our business and failure to do so may materially adversely affect our results of operations and financial position.

• The financial services industry, and all of the businesses in which we compete, are intensely competitive.

• A substantial portion of our revenue is derived from Financial Advisory fees, which are not long-term contracted sources of revenue and are subject to intense competition.

• If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue could suffer.

• If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully.

• The financial services industry, and all of the businesses in which we operate, are intensely competitive.

• A substantial portion of our revenue is derived from Financial Advisory fees, which are not long-term contracted sources of revenue and are subject to intense competition, and declines in our Financial Advisory engagements could have a material adverse effect on our business, financial condition and results of operations.

• If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue would suffer.

• Certain of our services are dependent on the availability of private capital for deployment in illiquid asset classes.

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• Certain of our investments are in relatively high-risk, illiquid assets, and we may lose some or all of the principal amount of these investments or fail to realize any profits from these investments for a considerable period of time.

• We may pursue new business lines, acquisitions, joint ventures, cooperation agreements or other growth or geographic expansion strategies that may result in additional risks and uncertainties in our business and could present unforeseen integration obstacles or costs.

• We may pursue new business lines, acquisitions, dispositions, reorganizations, joint ventures, cooperation agreements or other strategic alternatives that may result in additional risks and uncertainties in our business and could present unforeseen obstacles or costs.

• An inability to access the debt and equity capital markets as a result of our debt obligations, credit ratings or other factors could impair our liquidity, increase our borrowing costs or otherwise adversely affect our financial position or results of operations.

• The soundness of third parties, including our clients, as well as financial, governmental and other institutions, could adversely affect us.

• We are subject to reputational risks that could harm our business.

• Our international operations are subject to certain risks, which may affect our revenue.

• Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth.

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• The financial services industry faces substantial litigation and regulatory risks, and we may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or if conflicts of interest should arise.

• Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.

• Expectations and regulations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.

• Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.

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• Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business.

• Uncertainty regarding the outcome of future arrangements between the European Union and the United Kingdom may adversely affect our business.

• Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could negatively impact our effective tax rate.

• Changes in relevant tax laws or rates, changes in regulations, treaties or the interpretation of these items, or changes in the jurisdictional mix of our earnings could negatively impact our effective tax rate.

• Tax authorities may challenge our tax computations and transfer pricing methods and our application of related policies and methods.

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The IRS may challenge the tax basis increases upon which payments are based and, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings.

• We may fail to realize the anticipated benefits of the Conversion or those benefits may take longer to realize than expected or not offset the costs of the Conversion, which could have a material and adverse impact on the trading price of our common stock.

• Lazard, Inc.

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Risks Related to Economic and Current Conditions Impacting Us and our Business

Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of transactions involving our Financial Advisory business and reducing the value or performance of the assets we

manage in our Asset Management business, which, in each case, could materially reduce our revenue or income and adversely affect our financial position.

Difficult market conditions can adversely affect our business in many ways, including by reducing the volume or value of transactions involving our Financial Advisory business and reducing the value or performance of the assets we manage in our Asset Management business, which, in each case, could materially reduce our revenue or income and adversely affect our financial position.

As a financial services firm, our businesses are materially affected by conditions in the global financial markets and economic conditions throughout the world.

Unfavorable economic and market conditions can adversely affect our financial performance in both the Financial Advisory and Asset Management businesses.

The future market and economic climate may deteriorate because of many factors, such as a general slowing of economic growth globally or regionally, periods of disruption or volatility in securities markets, volatility and tightening of liquidity in credit markets, volatility or significant realignments in currency markets, increases in interest rates, inflation, corporate or sovereign defaults, natural disasters, pandemics, terrorism or political uncertainty or instability.

Unfavorable economic and market conditions have in the past adversely affected and could again in the future adversely affect our financial performance in both the Financial Advisory and Asset Management businesses.

The future market and economic climate may deteriorate because of many factors, such as a general slowing of economic growth globally or regionally, periods of disruption or volatility in securities markets, volatility and tightening of liquidity in credit markets, volatility or significant realignments in currency markets, an evolving regulatory environment (and the timing and nature of regulatory reform), increases in interest rates, supply chain disruptions, inflation, corporate or sovereign defaults, natural disasters, pandemics, terrorism or political uncertainty or instability.

For example, revenue generated by our Financial Advisory business is directly related to the volume and value of the transactions in which we are involved.

During periods of unfavorable or uncertain market or economic conditions, the volume and value of M&A transactions may decrease, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements.

For example, changes, or proposed changes, to international trade and investment policies of the U.S.

and other countries, such as new or increased tariffs, could negatively affect market activity levels, and the new U.S.

presidential administration has increased tariffs on imports from China and proposed imposing or increasing tariffs on U.S.

trading partners.

Our results of operations would be adversely affected by any such reduction in the volume or value of M&A transactions.

In addition, our profitability would be adversely affected due to our fixed costs and the possibility that we would be unable to reduce our variable costs without reducing revenue or within a timeframe sufficient to offset any decreases in revenue relating to changes in market and economic conditions.

Within our Financial Advisory business, we have typically seen that, during periods of economic strength and growth, our Mergers and Acquisitions practice historically has been more active and our Restructuring practice has been less active.

Conversely, during periods of economic weakness and contraction, we typically have seen that our Restructuring practice has been more active and our Mergers and Acquisitions practice has been less active.

As a result, revenue from our Restructuring practice has tended to correlate negatively to our revenue from our Mergers and Acquisitions practice over the course of business cycles.

These trends are cyclical in nature and subject to periodic reversal.

However, these trends do not cancel out the impact of economic conditions in our Financial Advisory business, which may be adversely affected by a downturn in economic conditions, leading to decreased Mergers and Acquisitions practice activity, notwithstanding improvements in our Restructuring practice.

While we generally have experienced a counter-cyclical relationship between our Mergers and Acquisitions practice and our Restructuring practice, this relationship may not continue in the future, and there is no certainty that strength in one practice will offset, or partially offset, weakness in the other.

In addition, our profitability would be adversely affected due to our fixed costs and the possibility that we may be unable to reduce our variable costs without reducing revenue or within a timeframe sufficient to offset any decreases in revenue relating to changes in market and economic conditions.

Our Asset Management business also would be expected to generate lower revenue in a market or general economic downturn.

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Global financial markets and economic conditions have experienced, and may continue to experience, volatility and disruptions due to geopolitical conditions, military conflicts, wars and acts of terrorism globally, including as a result of the events themselves and the responses, such as the imposition of sanctions, by the U.S., the European Union and other countries.

Geopolitical instability, conflicts and related sanctions that have been or may be imposed may have further global economic and other consequences, including reduced consumer confidence, decreased economic growth, increased inflation and higher interest rates, each of which could adversely affect our performance in both our Financial Advisory and Asset Management businesses resulting from, among other things, decreased M&A activity and downward pressure on assets under management.

Geopolitical instability, conflicts and related sanctions that have been or may be imposed may have further global

economic and other consequences, including reduced consumer confidence, decreased economic growth, increased inflation and higher interest rates, each of which could adversely affect our performance in both our Financial Advisory and Asset Management businesses resulting from, among other things, decreased M&A activity and downward pressure on assets under management.

In addition, businesses have seen, and expect to continue to see, increased risks of cyberattacks related to geopolitical and military conflicts, including in retaliation for sanctions imposed by the United States and other countries.

Such impacts could intensify other risks to our businesses and industry described herein and could otherwise have an adverse effect on our business, financial condition and results of operations.

Fluctuations in foreign currency exchange rates could reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM.

Fluctuations in foreign currency exchange rates have in the past, and could again in the future, reduce our stockholders’ equity and net income or negatively impact the portfolios of our Asset Management clients and may affect the levels of our AUM.

We are exposed to fluctuations in foreign currencies, including through advisory fees paid to our Financial Advisory business and management fees paid to our Asset Management business.

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Our efforts to mitigate the impact of pandemics may require significant investments of time and resources across our businesses.

Furthermore, as many

employees continue to perform all or a portion of their job functions remotely on a regular basis, there can be no assurance that our measures implemented to protect the confidentiality of our and our clients’ confidential information will be adequate.

Furthermore, as many employees continue to perform all or a portion of their job functions remotely on a regular basis, there can be no assurance that our measures implemented to protect the confidentiality of our and our clients’ confidential information will be adequate.

Any unauthorized disclosure of such information could result in legal action, regulatory sanctions and reputational or financial harm.

Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business.

As we have expanded the scope of our businesses and client base, we increasingly confront actual, potential and perceived conflicts of interest relating to our Financial Advisory and Asset Management businesses.

It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction, litigation or regulatory enforcement actions.

Appropriately identifying and managing actual or perceived conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest.

Regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation which would materially adversely affect our business in a number of ways, including an inability to recruit additional professionals and a reluctance of potential clients and counterparties to do business with us.

Additionally, client-imposed conflicts requirements could place additional limitations on us, for example, by limiting our ability to accept advisory engagements.

Policies, controls and procedures that we may be required to implement to address additional regulatory requirements, including as a result of additional foreign jurisdictions in which we operate, our underwriting activities, or to mitigate actual or potential conflicts of interest, may result in increased costs, including for additional personnel and infrastructure and information technology improvements, as well as limit our activities and reduce the benefit of positive synergies that we seek to cultivate across our businesses.

Risks Related to Our Business and Operations

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As a result, our Financial Advisory business is highly dependent on market conditions and the decisions and actions of our clients, interested third parties and governmental authorities.

For example, a client or counterparty could delay or terminate an acquisition transaction because of a failure to agree upon final terms, failure to obtain necessary regulatory consents or board of directors, acquirer’s or stockholders’ approval, failure to secure necessary financing, adverse market conditions or because the seller’s business is experiencing unexpected operating or financial problems.

For example, a client or counterparty could delay or terminate an acquisition transaction because of a failure to agree upon final terms, failure to obtain necessary regulatory consents or board of directors, acquirer’s or stockholders’ approval, failure to secure necessary financing, our client is outbid, adverse market conditions or because the seller’s business is experiencing unexpected operating or financial problems.

Anticipated bidders for assets of a client during a restructuring transaction may not materialize or our client may not be able to restructure its operations or indebtedness, for example, due to a failure to reach agreement with its principal creditors.

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In addition, these arrangements and agreements may face enforceability challenges and have a limited duration and expire after a certain period of time.

We continue to be subject to intense competition in the

financial services industry regarding the recruitment and retention of key professionals, and have experienced departures from and added to our professional ranks as a result.

Furthermore, we seek to align the interests of our managing directors and other key professional employees with that of our shareholders by awarding deferred compensation in the form of equity, and any change in our ability to grant such awards, including as a result of a shareholder vote against any of our equity incentive plans, could have a negative impact on our ability to promote such alignment.

We continue to be subject to intense competition in the financial services industry regarding the recruitment and retention of key professionals, and have experienced both departures from and additions to our professional ranks as a result.

Furthermore, we seek to align the interests of our managing directors and other key professional employees with those of our shareholders by awarding deferred compensation in the form of equity, and any change in our ability to grant such awards, including as a result of a shareholder vote against any of our equity incentive plans, could have a negative impact on our ability to promote such alignment.

Certain changes to our employee compensation arrangements may result in increased compensation and benefits expense.

In addition, any changes to the mix of cash and deferred incentive compensation granted to our employees may affect certain financial measures applicable to our business, including ratios of compensation and benefits expense to revenue, and may result in the issuance of increased levels of common stock to our employees upon vesting of restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), restricted stock awards (“RSAs”), profits interest participation rights (“PIPRs”) or other equity-based awards in a particular year.

In addition, any changes to the mix of cash and deferred incentive compensation granted to our employees may affect certain financial measures applicable to our business, including ratios of compensation and benefits expense to revenue, and may result in the issuance of increased levels of common stock to our employees upon vesting of restricted stock units, restricted stock awards, performance-based restricted stock units (“PRSUs”), profits interest participation rights (“PIPRs”) or other equity-based awards in a particular year.

Our compensation levels, results of operations and financial position may be significantly affected by many factors, including general economic and market conditions, our operating and financial performance, staffing levels and competitive pay conditions.

The financial services industry, and all of the businesses in which we compete, are intensely competitive.

If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully.

Our growth strategy is based, in part, on our ability to attract and retain highly skilled and profitable senior professionals across all of our businesses.

Due to competition from other firms, we may face difficulties in, or increases in the cost of, recruiting and retaining professionals of a caliber consistent with our business strategy.

In particular, many of our competitors may be able to offer more attractive compensation packages or broader career opportunities.

Additionally, it may take more than one year for us to determine whether new advisory professionals will be profitable or effective, during which time we may incur significant expenses and expend significant time and resources on training, integration and business development aimed at developing this new talent.

Further, we may not be able to retain our professionals, which could result in increased recruiting expenses or our recruiting professionals at higher compensation levels.

Failure to retain other key professionals, including maintaining adequate compensation levels, may materially adversely affect our business.

The financial services industry, and all of the businesses in which we operate, are intensely competitive.

The financial services industry is intensely competitive, and we expect it to remain so.

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• certain of our practices and products are newly established and relatively small.

In addition, many of our competitors have the ability to offer a wide range of products, from loans, deposit-taking and insurance to brokerage, asset management and investment banking services, including products and services which we do not currently offer, which may enhance their competitive position.

not currently offer, which may enhance their competitive position.

They may also have the ability to support investment banking, including financial advisory services, with commercial banking, insurance and other financial services in an effort to gain market share, which could result in pricing pressure in our businesses.

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Furthermore, many businesses do not routinely engage in transactions requiring our services, and as a consequence, our fee paying engagements with many clients are not likely to be predictable.

We may also lose clients from time-to-time as a result of, among other reasons, the sale, merger or restructuring of a client, a change in a client’s senior management or competition from other

financial advisors and financial institutions.

We may also lose clients from time-to-time as a result of, among other reasons, the sale, merger or restructuring of a client, a change in a client’s senior management or competition from other financial advisors and financial institutions.

As a result, our engagements with clients are constantly changing, and our Financial Advisory fees could decline quickly due to the factors discussed above.

If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue could suffer.

If the number of debt defaults, bankruptcies or other factors affecting demand for our Restructuring services declines, our Restructuring revenue would suffer.

We provide various restructuring and restructuring-related advice to companies in financial distress or to their creditors or other stakeholders.

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Similarly, we may incur losses and be subject to reputational harm to the extent that, for any reason, we are unable to assist a client in raising capital at anticipated price levels when we act as financial advisor.

In addition, if we act as an underwriter, deal manager or financial advisor, we may also be subject to liability for material misstatements or omissions in prospectuses and other offering documents relating to the applicable transactions.

In addition, if we act as an

underwriter, deal manager or financial advisor, we may also be subject to liability for material misstatements or omissions in prospectuses and other offering documents relating to the applicable transactions.

In such cases, any indemnification provisions in the applicable underwriting, deal manager or financial advisory agreement may not be available to us or may not be sufficient to protect us against losses arising from such liability.

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This, in turn, may adversely affect demand for our strategies or result in fee pressure on our business overall.

In combination with poor performance relative to peers, changes in personnel, challenging market environments or other

difficulties, the underperformance of our investment style may result in significant client or asset departures or a reduction in AUM.

In combination with poor performance relative to peers, changes in personnel, challenging market environments or other difficulties, the underperformance of our investment style may result in significant client or asset departures or a reduction in AUM.

We could lose clients and suffer a decline in our Asset Management revenue and earnings if the investments we choose in our Asset Management business perform poorly, regardless of overall trends in the prices of securities.

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Our Asset Management business has entered into service agreements with third-party service providers for client order management and the execution and settlement of client securities transactions.

This business faces the risk of

operational failure of any of our clearing agents, the exchanges, clearing houses or other intermediaries we use to facilitate our securities transactions.

This business faces the risk of operational failure of any of our clearing agents, the exchanges, clearing houses or other intermediaries we use to facilitate our securities transactions.

We oversee and manage these relationships.

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Because it may take several years before attractive alternative investment opportunities are identified, some or all of the capital committed by us to these funds is likely to be invested in government securities, other short-term, highly-rated debt securities and money market funds that traditionally have offered investors relatively lower returns.

In addition, these investments may be adjusted for accounting purposes to fair value at the end of each quarter, and any related gains or losses would affect our results of operations and could increase the volatility of our earnings, even though such fair value fluctuations may have no cash impact.

In addition, these investments are adjusted for accounting purposes to fair value at the end of each quarter, and any related gains or losses would affect our results of operations and could increase the volatility of our earnings, even though such fair value fluctuations may have no cash impact.

It takes a substantial period of time to identify attractive alternative investment opportunities, to raise all the funds needed to make an investment and then to realize the cash value of an investment through resale.

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Our ability to form new alternative investment funds is subject to a number of uncertainties, including past performance of our funds, market or economic conditions, competition from other fund managers and the ability to negotiate terms with major investors.

We may pursue new business lines, acquisitions, joint ventures, cooperation agreements or other growth or geographic expansion strategies that may result in additional risks and uncertainties in our business and could present unforeseen integration obstacles or costs.

We routinely assess our strategic position and may in the future pursue new business lines or seek acquisitions or other transactions or growth strategies to further enhance our competitive position.

We may pursue new business lines, acquisitions, dispositions, reorganizations, joint ventures, cooperation agreements or other strategic alternatives that may result in additional risks and uncertainties in our business and could present unforeseen obstacles or costs.

We routinely assess our strategic position and may in the future pursue new business lines, seek acquisitions, or evaluate other strategic alternatives to further enhance our competitive position.

We have in the past pursued joint ventures and other transactions aimed at expanding the geography and scope of our operations.

We expect to continue to explore new business lines, acquisitions, growth strategies and partnership or strategic alliance opportunities that we believe to be attractive.

Acquisitions, growth strategies, joint ventures and new business lines involve a number of risks and present financial, managerial and operational challenges.

These risks and challenges include potential disruption of our ongoing business and distraction of management, difficulty integrating personnel and financial and other systems, difficulty hiring additional management and other critical personnel and other challenges arising from the increased scope, geographic diversity and complexity of our operations.

We may also evaluate strategic alternatives to restructure our business, including dispositions and reorganizations that we believe enhance shareholder value.

Any of these strategic actions involve a number of risks and present financial, managerial and operational challenges.

These risks and challenges include potential disruption of our ongoing business and distraction of management, difficulty integrating personnel and financial and other systems, difficulty hiring additional management and other critical personnel and other challenges arising from the changes in scope, geographic diversity and complexity of our operations.

To the extent that we pursue business opportunities outside of the U.S.

and our other principal business locations, including through acquisitions, joint ventures or other geographic expansion of our existing businesses, we may become subject to political, economic, legal, operational, regulatory and other risks that are inherent in operating in a foreign country, including risks of potential price, capital and currency exchange controls, licensing requirements and other regulatory restrictions, as well as the risk of hostile actions against or affecting our business or people.

Our ability to remain in compliance with local laws in a particular foreign jurisdiction could adversely affect our businesses and our reputation.

In addition, our clients and other stakeholders may react unfavorably to our acquisition, growth and joint venture strategies or new business lines;

we may not realize any anticipated benefits from such actions, we may be exposed to additional liabilities of any new business line, acquired business or joint venture;

we may be exposed to litigation in connection with a new business line, acquisition, growth or joint venture transaction;

and our other principal business locations, including through acquisitions, dispositions, reorganizations, joint ventures or other strategic alternatives, we may become subject to political, economic, legal, operational, regulatory and other risks that are inherent in operating in a foreign country, including risks of potential price, capital and currency exchange controls, licensing requirements and other regulatory restrictions, as well as the risk of hostile actions against or affecting our business or people.

As a result, any impact to our ability to remain in compliance with local laws in a particular foreign jurisdiction could adversely affect our businesses and our reputation.

In addition, our clients and other stakeholders may react unfavorably to our acquisition, disposition, reorganization, growth and joint venture strategies, new business lines, or other strategic alternatives, or we may not realize any anticipated benefits from such actions;

we may be exposed to additional liabilities of any new business line, acquired business or joint venture;

we may be exposed to litigation in connection with a new business line, acquisition, disposition, reorganization, growth or joint venture transaction;

and we may not be able to renew on similar terms (or at all) previously successful joint ventures or similar arrangements, any of which could materially adversely affect our business, financial position and results of operations.

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In the event that the clients are unable to repay their loans and we are unable to realize the collateral for sums that exceed the underlying amount of the loan, we may lose some or all of these amounts.

In addition, we have and may continue to enter into joint ventures, partnerships and invest in entities in which we share ownership or management with unaffiliated third parties.

In addition, we have and may continue to enter into joint ventures and partnerships and invest in entities in which we share ownership or management with unaffiliated third parties.

In certain circumstances, we may not have complete control over governance, financial reporting, operations, legal and regulatory compliance or other matters relating to such joint ventures, partnerships or entities.

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and the risk that we will be unable to resolve disputes with such third parties.

We are subject to reputational risks that could harm our business.

Maintaining our reputation is critical to our attracting and maintaining clients, investors and employees.

If we fail to deal with, or appear to fail to deal with, various issues that may give rise to reputational risk, we could significantly harm our business prospects.

These issues include, but are not limited to, any of the risks discussed in this Item 1A, appropriately dealing with potential conflicts of interest, legal and regulatory requirements, ethical issues, money-laundering, cybersecurity and privacy, record keeping, and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our products.

Further, negative publicity regarding us, whether or not true, may also result in harm to our prospects.

There is no assurance that we will be able to successfully reverse the negative impact of allegations and rumors in the future and our potential failure to do so could have a material adverse effect on our business, financial position and results of operations.

Our international operations are subject to certain risks, which may affect revenue.

In 2024, we earned a significant portion of our revenues from our international operations.

We intend to grow our non‑U.S.

business, and this growth is important to our overall success.

Our international operations carry special financial and business risks, which could include the following:

• greater difficulties in managing and staffing foreign operations;

• language and cultural differences;

• fluctuations in foreign currency exchange rates that could adversely affect our results;

• unexpected changes in trading policies, regulatory requirements, tariffs and other barriers;

• longer transaction cycles;

• higher operating costs;

• adverse consequences or restrictions on the repatriation of earnings and/or capital;

• potentially adverse tax consequences, such as trapped foreign losses;

• less stable political and economic environments;

• civil disturbances or other catastrophic events that reduce business activity.

If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results.

Other operational risks may disrupt our businesses, result in regulatory action against us or limit our growth.

Our business is highly dependent on communications and information systems, including those of our vendors.

Any failure or interruption of these systems, whether caused by fire, other natural disaster, power or telecommunications failure, geopolitical instability, act of terrorism or war, system modification or upgrade or a delay of any modification or upgrade or otherwise, could materially adversely affect our business.

otherwise, could materially adversely affect our business.

Although back-up systems are in place, our back-up procedures and capabilities in the event of a failure or interruption may not be adequate.

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We may need to hire additional staff in order to continue to upgrade or expand the capabilities of our systems, including with respect to quickly advancing technologies like generative artificial intelligence, and failure to attract and retain staff with the proper skillset could disrupt or constrain our operations.

Certain investment teams within our Asset Management business, for example, employ proprietary systems, including

quantitative models, in connection with their investment processes.

Certain investment teams within our Asset Management business, for example, employ proprietary systems, including quantitative models, in connection with their investment processes.

These systems and models are often designed and, with assistance from technology personnel, maintained by employees who are members of those investment teams.

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Such further actions could include expanding current or enacting new standards, requirements and rules that may be applicable to us and our subsidiaries.

The effect, complexity and scope of any such expanded or new standards, requirements and rules is uncertain and could increase costs of compliance, monitoring and reporting and result in increased potential for litigation, sanctions and other liabilities, all of which could have adverse consequences to our business, financial condition and results of operations.

The effect, complexity and scope of any such expanded or new standards, requirements and rules is uncertain

and could increase costs of compliance, monitoring and reporting and result in increased potential for litigation, sanctions and other liabilities, all of which could have adverse consequences to our business, financial condition and results of operations.

While we continue to examine the requirements of new regulations that may become applicable to us in the U.S.

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Substantial legal liability or significant regulatory or governmental action against us could materially adversely affect our business, financial condition or results of operations and cause significant reputational harm to us, which could seriously harm our business.

Expectations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.

Expectations and regulations relating to ESG considerations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.

As a financial services firm, we depend to a large extent on our relationships with our clients and our reputation for integrity and high-caliber professional services to attract and retain clients.

Companies across all industries are facing increasing scrutiny from customers, clients, regulators, investors, and other stakeholders related to their ESG practices and disclosures.

In addition to governments and regulators, the investment community and society at large is increasingly focused on these practices, especially as they relate to the environment and climate change, health and safety, diversity, equity, inclusion, labor conditions and human and civil rights.

As a result, there is heightened demand for information related to ESG factors, such as climate change, natural resources, waste reduction, energy, human capital, and risk oversight, including with respect to our supply chain, which expands the nature, scope, and complexity of matters that we are expected to manage, assess, and report.

We also make statements about our ESG goals and initiatives through our ESG Corporate Sustainability reporting and our Asset Management Sustainable Investing perspectives, which is available on our public websites.

As a result, there is demand for information related to ESG factors, such as climate change, natural resources, waste reduction, energy, human capital, and risk oversight, including with respect to our supply chain, which expands the scope and complexity of matters that we are expected to assess and report.

We make statements about our ESG goals and initiatives through our Corporate Sustainability reporting and our Asset Management Sustainable Investing perspectives, which are available on our public websites.

We may not achieve our ESG goals and initiatives.

In addition, some stakeholders may disagree with our goals and initiatives.

Any failure, or perceived failure, to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us or client dissatisfaction and materially adversely affect our business, reputation, results of operations, financial condition and stock price.

Any failure, or perceived failure, to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us or client dissatisfaction and materially adversely affect our business, reputation, results of operations, financial condition and stock price.

Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.

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In addition, we often have discretion to trade client assets on the client’s behalf and must do so acting in the best interests of the client.

As a result, we are subject to a number of obligations and standards, and the violation of those

obligations or standards may adversely affect our clients and us.

As a result, we are subject to a number of obligations and standards, and the violation of those obligations or standards may adversely affect our clients and us.

It is difficult to detect and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in all cases.

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Additionally, certain of our third-party vendors or service providers, which may process or otherwise have access to confidential or sensitive data, may have instituted policies allowing their respective employees who are capable of performing their functions remotely to do so and implementing or expanding back-up procedures and capabilities, and may be experiencing a growing demand for their services.

As such, such vendors and service providers may be more susceptible to interruptions or confidentiality or security breaches than in prior periods.

As such, such vendors and service providers may be more susceptible

to interruptions or confidentiality or security breaches than in prior periods.

Any failure of or interruption to their systems or any back-up procedures and capabilities as a result of such actions or such growth in demand could materially adversely affect our business, financial condition and results of operations .

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Failure to maintain an effective internal control environment could materially adversely affect our business.

Uncertainty regarding the outcome of future arrangements between the European Union and the U.

may adversely affect our business.

The Company has a significant presence in the U.K.

and many European Union countries.

left the European Union on January 31, 2020.

Prior to that date, the U.K.

adopted numerous European Union laws and regulations into U.K.

domestic legislation in order to ensure continuity.

The “Retained EU Law (Revocation and Reform) Act 2023”, which came into force on January 1, 2024, revoked certain European Union legacy laws (“retained EU laws”) and gave the U.K.

Government the power to amend, repeal or restate the remaining retained EU laws.

There is currently no certainty on which retained EU laws and regulations will be changed going forward and the U.K.

may diverge from these laws and regulations and may decide not to adopt rules that correspond to future European Union legislation.

To the extent that different regulatory systems impose overlapping or inconsistent requirements on the conduct of the Company’s business, the Company may face additional complexity and costs in its compliance efforts, as well as potential increased costs to the extent the Company is required to make further adjustments to how the Company operates its business in the U.K.

and/or the European Union.

Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items could negatively impact our effective tax rate.

Changes in relevant tax laws or rates, changes in regulations, treaties or the interpretation of these items or changes in the jurisdictional mix of our earnings could negatively impact our effective tax rate.

We are a multinational company subject to tax in multiple U.S.

and foreign jurisdictions.

Our effective tax rate is based upon the application of currently enacted income tax laws, regulations and treaties, and current judicial and administrative interpretations of those income tax laws, regulations and treaties, and upon our non-U.S.

subsidiaries’ ability to qualify for benefits under those treaties.

Those income tax laws, regulations and treaties, and the administrative and judicial interpretations of them, are subject to change at any time, and any such change may be retroactive.

In addition, recent or future changes to tax laws, regulations and tax treaties may have an adverse impact on us.

For example, the Tax Cuts and Jobs Act of 2017 includes several international provisions applicable to us and the recently enacted Inflation Reduction Act imposes, among other items, an alternative minimum “book” tax on certain large corporations and a new 1% excise tax on net stock repurchases made by certain publicly traded corporations after December 31, 2022.

Some guidance has been issued on the application of the alternative minimum book tax and the excise tax but several aspects of the Tax Cuts and Jobs Act and the Inflation Reduction Act remain uncertain and the Treasury regulations implementing the provisions are forthcoming.

All of these provisions are complex and could adversely impact our effective tax rate in future years.

and foreign jurisdictions and we earn a significant amount of our income outside the U.S.

A change in the mix of earnings and losses in countries with differing statutory tax rates may result in higher effective tax rates for the company.

Our effective tax rate is based upon the application of currently enacted income tax laws, regulations and treaties, and upon our non-U.S.

subsidiaries’ ability to qualify for benefits under those treaties and those laws, regulations and treaties, and the administrative and judicial interpretations of them are subject to change at any time and such changes may adversely impact our effective tax rate.

For example, the Tax Cuts and Jobs Act of 2017 includes several international provisions applicable to us and the Inflation Reduction Act of 2022 imposes, among other items, a 1% excise tax on net stock repurchases made by certain publicly traded corporations which may impact us and consequently, we continue to monitor guidance and regulations on such provisions.

All of these provisions are complex and changes to such provisions or our interpretation of them could adversely impact our effective tax rate in future years.

Multiple levels of government, foreign legislatures and international organizations, such as the Organization for Economic Cooperation and Development (“OECD”) and the European Union, are increasingly focused on tax reform and have proposed and implemented tax legislation and regulations that could affect the taxation of multinational companies.

For example, the enactment of all or part of the recommendations set forth or that may be introduced in the OECD project on Base Erosion and Profit Shifting by tax authorities in the countries in which we operate could unfavorably impact our overall tax rate.

Additionally, the OECD continues to advance proposals for modernizing international tax rules, including the introduction of a 15% global minimum tax and its Base Erosion and Profit Shifting project, which is focused on several issues, including the shifting of profits among affiliated entities in different tax jurisdictions.

Each, if implemented, could unfavorably impact our overall tax rate.

For example, the implementation of the OECD directives may vary by country in which we operate and could unfavorably impact our overall tax rate.

Tax authorities may challenge our tax computations and classifications, our transfer pricing methods and our application of related policies and methods.

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These authorities may successfully challenge certain tax positions or deductions taken by our subsidiaries.

For example, tax authorities may contest

intercompany allocations of fee income, management charges or interest charges among affiliates in different tax jurisdictions.

For example, tax authorities may contest intercompany allocations of fee income, management charges or interest charges among affiliates in different tax jurisdictions.

While we believe that we have provided the appropriate required reserves, it is possible that a tax authority may disagree with all, or a portion, of the tax benefits claimed.

If a tax authority were to successfully challenge our positions, it could result in significant additional tax costs or payments under the tax receivable agreement described below.

In addition, there are additional transfer pricing and standardized country-by-country reporting requirements being implemented.

Additional information from country-by-country reporting, certain local information-sharing arrangements and other documentation held by tax authorities is expected to be subject to greater information-sharing arrangements, and any challenges from tax authorities reviewing such information could adversely impact our overall tax obligations or our business, financial condition or results of operations.

Anti-takeover provisions in our organizational documents and Delaware law could delay or prevent a change in control.

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federal, state and local income tax or franchise tax that we actually realize as a result of certain tax benefits that are subject to the Amended and Restated Tax Receivable Agreement.

Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, including certain of our executive officers, in proportion to their beneficial interests in the Trust.

Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, which includes certain of our executive officers, in proportion to their beneficial interests in the Trust.

If the IRS successfully challenges the tax basis increases we receive, under certain circumstances, our subsidiaries may have made or could make payments under the Amended and Restated Tax Receivable Agreement in excess of our subsidiaries’ cash tax savings.

Risks Relating to Our Conversion to a U.S.

C-Corporation

We may fail to realize the anticipated benefits of the Conversion or those benefits may take longer to realize than expected or not offset the costs of the Conversion, which could have a material and adverse impact on the trading price of our common stock.

We believe that the Conversion may over time, among other things, act as a catalyst for enhanced stockholder ownership, as some institutional investors are subject to constraints on owning stock of companies not incorporated in the U.S.

or taxed as a partnership, and potentially provide increased liquidity benefits for our common stock.

However, the level of investor interest in our common stock may not meet our expectations.

Moreover, even though we have made efforts to simplify our tax structure and reporting as a result of the Conversion, this may not result in the sustained increased demand for our common stock that we anticipate.

Consequently, we may fail to realize the anticipated benefits of the Conversion or those benefits may take longer to realize than we expect.

Moreover, there can be no assurance that the anticipated benefits of the Conversion will offset its costs, which could be greater than we expect.

Our failure to achieve the anticipated benefits of the Conversion at all or in a timely manner, or a failure of any benefits realized to offset its costs, could have a material and adverse impact on the trading price of our common stock.

Risks Relating to Our Capital Structure

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We control Lazard Group through our indirect control of both of the managing members of Lazard Group.

Following the Conversion, all of our operating income will be subject to U.S.

federal corporate income taxes, which we anticipate will increase our effective tax rate and the amount of cash used to pay taxes.

Following the Conversion, all of our operating income is subject to U.S.

federal corporate income taxes.

In addition, our subsidiaries incur income taxes on the net taxable income of Lazard Group in their respective tax jurisdictions.

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Lazard Group is a holding company and therefore depends on its subsidiaries to make distributions to Lazard Group to enable it to service its obligations under its indebtedness.

Lazard Group depends on its subsidiaries, which conduct the operations of its businesses, for distributions, dividends and other payments to generate the funds necessary to meet its financial obligations, including payments of principal and interest on its indebtedness.

interest on its indebtedness.

However, none of Lazard Group’s subsidiaries is obligated to make funds available to it for servicing such financial obligations, and the group of entities that constitute Lazard Group’s subsidiaries may change over time.

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We have made statements under the captions “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Form 10-K that are forward-looking statements.

In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal” or “continue,” and the negative of these terms and other comparable terminology.

In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” and the negative of these terms and other comparable terminology.

These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business.

These statements are only predictions based on our current expectations and projections about future events.

These forward-looking statements are only predictions based on our current expectations and projections about future events.

There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements.

These factors include, but are not limited to, the numerous risks and uncertainties outlined in “Risk Factors,” including the following:

• a decline in general economic conditions or the global or regional financial markets;

• adverse general economic conditions or adverse conditions in global or regional financial markets;

• a decline in our revenues, for example due to a decline in overall M&A activity, our share of the M&A market or our AUM;

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New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

As a result, there can be no assurance that the forward-looking statements included in this Form 10-K will prove to be accurate or correct.

Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events.

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Forward-looking statements include, but are not limited to, statements about:

• financial goals, including ratios of compensation and benefits expense to operating revenue;

• financial goals, including ratios of adjusted compensation and benefits expense to adjusted net revenue;

• ability to deploy surplus cash through dividends, share repurchases and debt repurchases;

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• competitive position;

• future acquisitions, including the consideration to be paid and the timing of consummation;

• future acquisitions or other strategic transactions, including the consideration to be paid and the timing of consummation;

• potential growth opportunities available to our businesses;

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• recruitment and retention of our managing directors and employees;

• potential levels of compensation expense, including adjusted compensation and benefits expense, and non-compensation expense;

• potential levels of expense, including adjusted compensation and benefits expense, and adjusted non-compensation expense;

• potential operating performance, achievements, productivity improvements, efficiency and cost reduction efforts;

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• likelihood of success and impact of litigation;

• ability to realize the anticipated benefits of the Conversion and impact on the trading price of our stock;

• expected tax rates, including effective tax rates;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors