Arthur J. Gallagher & Co.
For the period ended Mar 22, 2024. Filed Mar 22, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Mar 22, 2024 · Filed Mar 22, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Information Required In Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to §240.14a-12
ARTHUR J. GALLAGHER & CO.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ No fee required.
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
Message To Our StockholdersWe had another outstanding year in 2023. On a combined basis, our core brokerage and risk management segments produced adjusted revenue1 growth of 18.7% (to $9.9 billion) and adjusted EBITDAC1 growth of 20.5% (to $3.2 billion). We achieved organic revenue growth of 9.8% in our core brokerage and risk management segments.
| Dear Fellow Stockholder, | March 22, 2024 |
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| On behalf of our Board of Directors, I invite you to attend our 2024 Annual Meeting of Stockholders. We will be conducting our Annual Meeting virtually again this year. If you are not able to attend, we encourage you to vote by proxy. These proxy materials contain detailed information about the matters on which we are asking you to vote. We hope you will read these materials and then vote in accordance with the Board’s recommendations. Your vote is very important to us.Financial Performance. We had another outstanding year in 2023. On a combined basis, our core brokerage and risk management segments produced adjusted revenue1 growth of 18.7% (to $9.9 billion) and adjusted EBITDAC1 growth of 20.5% (to $3.2 billion). We achieved organic revenue growth of 9.8% in our core brokerage and risk management segments. We completed acquisitions representing $885.1 million in estimated annualized revenue and made significant progress integrating the Wills Re and Buck acquisitions. It was truly a fantastic year for our franchise, and I am excited about our future.Board of Directors. Our Board of Directors is comprised of a group of committed and highly qualified individuals who care deeply about our company and bring a diversity of experiences and perspectives to our Board deliberations. Our directors’ diverse professional backgrounds, skill sets and independent thought leadership have been invaluable to me and the management team in establishing our long-term business strategy, executing on that strategy and managing both short- and long-term risks facing the company.After 18 years of service, William Bax is retiring from the Board and not standing for re-election at this year’s meeting. Bill served as Chairman of the Audit Committee for many years and most recently served as Chairman of the Risk and Compliance Committee. During Bill’s tenure we grew from $1.5 billion in revenue and 8,750 employees to $9.9 billion in revenue and 52,000 employees. Bill contributed significantly to these results and I want to personally express my appreciation for his years of dedicated service and contributions to our financial success.I am excited to introduce a new director nominee, Deborah Caplan. I encourage you to review her qualifications and support her and all of our nominees. Including Ms. Caplan, we have added three new independent directors to our Board since 2020, a reflection of our continuing commitment to disciplined board refreshment. | Commitment to Stockholder Engagement. Our Board values the feedback and insights gained from our engagement with stockholders. During the past year, in addition to our regular discussions with stockholders regarding our financial results, we engaged with stockholders representing more than 50% of shares outstanding on corporate governance, broader sustainability matters and executive compensation. We are committed to including our stockholders’ perspectives in our deliberations and we believe that regular communication is necessary in order to ensure thoughtful and informed consideration of evolving best practices in areas of concern for our stockholders.Our Unique Culture. For nearly a century, we have proudly built a reputation of trust and integrity with our clients and colleagues. Now, more than ever, I believe that this culture and history of integrity is a true competitive advantage and a key differentiator when recruiting and retaining talent, attracting acquisition partners, retaining our valued clients and winning new business. Looking Ahead. During the course of 2023, clients added exposures and coverages to their existing insurance programs, payrolls and covered lives increased, demand for our benefits consulting services remained strong, and we experienced growth in claim counts within our claims handling business. We believe increases in property/casualty rates will continue throughout 2024 due to rising loss costs, a hard reinsurance market, increased frequency of catastrophe losses and social inflation. In addition, the combination of increasing insurable values, a tight labor market and lower unemployment will likely contribute to increases in client insured exposures. Of course, our job is to help our clients navigate these market pressures. Our team of professionals continue to deliver the very best insurance and risk management advice to clients to help them succeed in this challenging environment.On behalf of our Board of Directors, thank you for your continued support. We look forward to welcoming you at our 2024 Annual Meeting.Sincerely, J. Patrick Gallagher, Jr.Chairman of the Board and Chief Executive Officer |
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| 1 See Exhibit A for reconciliations of non-GAAP measures. | |
Arthur J. Gallagher & Co.
2850 Golf Road
Rolling Meadows, Illinois 60008-4050
Notice of 2024 Annual Meeting of Stockholders
Dear Stockholder:
We are pleased to invite you to the 2024 Annual Meeting of Stockholders of Arthur J. Gallagher & Co. (Gallagher or the company), which will be held as a virtual meeting, conducted via live audio webcast, on May 7, 2024, at 9:00 AM CDT. At the meeting, stockholders will vote on each item described below and we will transact such other business that properly comes before the meeting.
| Voting Items | Board Recommendations |
|---|---|
| •Elect each of the 9 nominees named in the accompanying Proxy Statement as directors to hold office until our 2025 Annual Meeting (Item 1) | FOR each nominee |
| •Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (Item 2) | FOR |
| •Approve, on an advisory basis, the compensation of our named executive officers (Item 3) | FOR |
Stockholders of record at the close of business on March 18, 2024 are entitled to notice of and to vote at the Annual Meeting. The applicable voting standard and the treatment of abstentions and “broker non-votes” for each of these items are set forth on page 48 of the Proxy Statement. Stockholders may vote shares prior to the meeting by visiting www.proxyvote.com.
On the day of the Annual Meeting, stockholders of record as of the close of business on March 18, 2024, the record date, are entitled to participate in and vote at the Annual Meeting. To participate in the Annual Meeting, including to vote and ask questions, stockholders of record should go to the meeting website at www.virtualshareholdermeeting.com/AJG2024, enter the 16-digit control number found on your proxy card or Notice of Internet Availability of Proxy Materials, and follow the instructions on the website. If your shares are held in street name and your voting instruction form or Notice of Internet Availability of Proxy Materials indicates that you may vote those shares through the www.proxyvote.com website, then you may access, participate in, and vote at the Annual Meeting with the 16-digit access code indicated on that voting instruction form or Notice of Internet Availability of Proxy Materials. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the Annual Meeting.
Stockholders are encouraged to log in to the Annual Meeting website before the Annual Meeting begins. Online check-in will be available approximately 10 minutes before the meeting starts. Additional information regarding the rules and procedures for participating in the virtual Annual Meeting will be set forth in our meeting rules of conduct, which stockholders will be able to view during the meeting.
We urge you to read the Proxy Statement for additional information concerning the matters to be considered at the Annual Meeting and then vote in accordance with the Board’s recommendations. Your vote is very important to us.
By Order of the Board of Directors
WALTER D. BAY
GENERAL COUNSEL AND SECRETARY
March 22, 2024
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 7, 2024:
We are making this Notice of Annual Meeting, this Proxy Statement, our 2023 Annual Report, and the Notice of Internet Availability of Proxy Materials available on the Internet at www.materials.proxyvote.com/363576 and mailing copies of these proxy materials to certain stockholders on or about March 22, 2024.
Proxy Statement Table of Contents
| Corporate Governance | 1 | FREQUENTLY REFERENCEDTOPICS | ||
|---|---|---|---|---|
| Item 1 – Election of Directors | 1 | |||
| Key Governance Practices | 8 | |||
| Board Leadership Structure | 8 | |||
| Director Independence | 9 | |||
| Compensation Committee Interlocks andInsider Participation | 9 | Board Diversity | 1 | |
| Stockholder Views | 9 | |||
| Board’s Role in Risk Oversight | 9 | |||
| Sustainability Oversight and Activities | 12 | Director Qualifications | 2 | |
| Other Board Matters | 13 | |||
| Director Compensation | 14 | |||
| Certain Relationships and Related Person Transactions | 15 | Board Skills and | 3 | |
| Security Ownership by Certain Beneficial Owners and Management | 16 | Experience | ||
| Equity Compensation Plan Information | 18 | |||
| Key Governance Practices | 8 | |||
| Audit Matters | 19 | |||
| Item 2 – Ratification of Appointment of Independent Auditor | 19 | |||
| Audit Committee Report | 20 | Board’s Role in Risk | 9 | |
| Oversight | ||||
| Executive Compensation | 21 | |||
| Compensation Discussion and Analysis | 21 | |||
| Overview of Our Executive Compensation Program | 22 | Sustainability Oversight and | 12 | |
| 2023 Compensation | 24 | Activities | ||
| Compensation Decision-Making Process | 30 | |||
| Comparative Market Assessment | 31 | |||
| Compensation Committee Report | 32 | Compensation Discussion | 21 | |
| Executive Compensation Tables | 33 | and Analysis | ||
| Item 3 – Advisory Vote to Approve the Compensation of Our Named Executive Officers | 42 | |||
| Pay versus Performance | 43 | Key Executive Compensation | 23 | |
| CEO Pay Ratio Disclosure | 47 | Practices | ||
| Questions and Answers About the Annual Meeting | 48 | |||
| 2023 Summary Compensation Table | 33 | |||
| Exhibits | A-1 | |||
| Exhibit A: Information Regarding Non-GAAP Measures | A-1 | |||
| Exhibit B: Resources | B-1 | |||
| Some of the statements in this proxy statement, including those related to our interim goal of 50% reduction in Scope 1 and Scope 2 carbon emissions on a per-employee basis by 2030 in addition to our goal of achieving net zero carbon emissions for our direct operations (Scope 1 and Scope 2) by 2050, may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and are subject to certain risks and uncertainties that could cause actual results to differ materially. Factors that could cause our future performance and actual results or outcomes to differ, possibly materially, from those expressed in the forward-looking statements include, but are not limited to, our ability to formulate and implement plans to reduce our Scope 1 and 2 carbon emissions as anticipated; our reliance on third parties, whose actions are outside our control; and the lack of widely accepted standards for measuring carbon emissions associated with insurance and resinsurance brokerage, consulting and claims managements activities, as well as other factors discussed in our 2023 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the other filings we make with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of, and are based on information available to us on, the date of the applicable document. We do not undertake any obligation to update any forward-looking statements made in or release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this proxy statement, which speaks as of the date issued, or to reflect new information, future or unexpected events or otherwise, except as required by applicable law or regulation. The inclusion of forward-looking and other sustainability-related statements in this proxy statement is not an indication that these contents are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current and forward-looking sustainability-related statements may be used based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. | ||||
Item 1 – Election of Directors
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.