MARSH & MCLENNAN COMPANIES INC
For the period ended May 16, 2024. Filed Mar 29, 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.
May 16, 2024 · Filed Mar 29, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
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| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| ☒ | Definitive Proxy Statement |
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| ☐ | Definitive Additional Materials |
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| ☐ | Soliciting Material Pursuant to §240.14a-12 |
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Marsh & McLennan Companies, Inc.
(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. |
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| ☐ | Fee paid previously with preliminary materials. |
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| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
DEAR STOCKHOLDER:
You are cordially invited to attend the annual meeting of stockholders of Marsh McLennan at:
| DATE Thursday, May 16, 2024 | TIME ONLINE CHECK-IN BEGINS: 9:45 a.m. Eastern Time MEETING BEGINS: 10:00 a.m. Eastern Time | LOCATION Meeting live via the Internet—please visit: WWW.VIRTUALSHAREHOLDER MEETING.COM/MMC2024 |
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This year’s annual meeting will be held virtually. Stockholders will be able to listen, vote, and submit questions remotely via the Internet. Information on how to participate in the virtual annual meeting is on page 87. There are five items of business for this year’s annual meeting:
ITEMS OF BUSINESS
| 1. | To elect eleven (11) persons named in the accompanying proxy statement to serve as directors for a one-year term; |
| 2. | To approve, by nonbinding vote, the compensation of our named executive officers; |
| 3. | To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm; |
| 4. | To vote on one stockholder proposal, if properly presented at the meeting; and |
| 5. | To conduct any other business that may properly come before the meeting. |
YOUR VOTE IS VERY IMPORTANT
If you were a stockholder at the close of business on March 18, 2024, you are eligible to vote at this year’s annual meeting. Whether or not you plan to participate in the annual meeting, your vote is very important. We urge you to participate in the election of our directors and in deciding the other items on the agenda for the annual meeting.
You may vote on the Internet or by telephone.
| • | If you accessed this proxy statement through the Internet, instructions appear in the Notice of Internet Availability of Proxy Materials. |
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| • | If you received this proxy statement by mail, you may also vote by mail and instructions appear on the enclosed proxy card. |
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CONNOR KURATEK
Deputy General Counsel & Corporate Secretary
March 29, 2024
Important Notice Regarding the Availability of Proxy Materials for the Marsh McLennan Annual Meeting of Stockholders to Be Held on May 16, 2024: This proxy statement and the Company’s 2023 Annual Report, which includes financial statements as of and for the fiscal year ended December 31, 2023, are available atproxy.mmc.com.
This notice and proxy statement is first being mailed or made available on the Internet to stockholders on or about March 29, 2024.
In these materials, we refer to Marsh & McLennan Companies, Inc. as “Marsh McLennan”, the “Company”, “we”, and “our”.
Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement
PROXY SUMMARY
This summary highlights information contained elsewhere in this proxy statement. You should read the entire proxy statement carefully before voting.
| VOTING MATTERS | Page number formore information | Board’s recommendation |
|---|---|---|
| Election of Directors (Item 1) | 18 | FOR |
| To elect eleven (11) persons named in the accompanying proxystatement to serve as directors for a one-year term | ||
| Advisory (Nonbinding) Vote to Approve NamedExecutive Officer Compensation (Item 2) | 26 | FOR |
| To approve, by nonbinding vote, the compensation of ournamed executive officers | ||
| Ratification of Independent Auditor (Item 3) | 70 | FOR |
| To ratify the selection of Deloitte & Touche LLP as ourindependent registered public accounting firm | ||
| Stockholder Proposal—Shareholder Right to Act byWritten Consent (Item 4) | 73 | AGAINST |
| To vote on one stockholder proposal | ||
HIGHLIGHTS OF OUR BUSINESS
| Business | We are the world’s leading professional services firm in the areas of risk, strategy and people. We help clients build the confidence to thrive through the power of perspective of our four market-leading businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman Group. With annual revenue of $23 billion, we have more than 85,000 colleagues advising clients in over 130 countries: Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and identify and capitalize on emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients. |
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| 1 | Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement |
| PROXY SUMMARY | (Continued) |
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KEY GOVERNANCE POLICIES AND PRACTICES
BOARD OF DIRECTORS
✓ Our Chair of the Board is an independent director. ✓ All of our directors are elected annually. ✓ Our directors’ skills and areas of expertise are presented in a matrix on page 11. ✓ Our Governance Guidelines articulate the Board’s responsibility, alongside management, for setting the “tone at the top” and overseeing management’s strategy to promote a culture of integrity throughout the Company.
| KEY DIRECTOR STATISTICS | ||
| ANNUAL REVIEW of BOARD COMPOSITION including SKILLS AND CHARACTERISTICS to be sought in candidates | In the past 5 YEARS, we have appointed 5 INDEPENDENT DIRECTORS | As of our 2024 annual meeting, we expect 36% OF OUR BOARD TO BE WOMEN |
| Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement | 2 |
| PROXY SUMMARY | (Continued) |
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| ENVIRONMENTAL,SOCIAL ANDGOVERNANCE (ESG) | Our 2023 ESG Report is available on our website at marshmclennan.com/about/esg.html and discloses against aspects of the Task Force on Climate-related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI) standards. Our 2023 ESG report and our website are not deemed part of this report and are not incorporated by reference. We have formally integrated ESG considerations into our decision-making processes since 2008 and believe that transparent and consistent disclosure enables better-informed business and investment decisions. |
| STOCKHOLDER ENGAGEMENT | ✓ In each of the past five years, we offered to engage with institutional stockholders holding approximately 36% to 64% of our outstanding common stock. ✓ In 2023, we expanded our stockholder engagement to take feedback from our stockholders following our lower-than-usual support for our 2023 say on pay proposal. We offered to engage with each of our top 50 stockholders, together representing 64% of our voting power and we held meetings with all stockholders that accepted our invitation. We ultimately met with stockholders representing approximately 33% of our voting power. Feedback was shared directly with the Board and its committees, including the Compensation Committee. The participating stockholders communicated their overall support of our executive compensation policies and practices. ✓ We understand that the one-time amendment to our former Chief Executive Officer (CEO), Daniel Glaser’s, outstanding performance stock unit awards in connection with his retirement was the basis for the lower-than-usual support for our say on pay proposal. We discussed the special circumstances, including the broad-based change to retirement treatment impacting all long-term incentive awards granted beginning in February 2022, Mr. Glaser’s lasting success as CEO and the successful transition of the CEO role to Mr. Doyle, that led the Compensation Committee to determine that the amendment was appropriate. Following the CEO transition, in the first quarter of 2023, we generated a 7% GAAP revenue increase and 9% underlying revenue growth, grew adjusted EPS* by 10% and GAAP EPS by 18% and expanded our margin. These strong results continued through 2023. We ended the year with a 25% increase in GAAP EPS, 17% growth in adjusted EPS*, generated revenue of $22.7 billion (a 10% increase on a GAAP basis compared with 2022) and 9% growth in underlying revenue. * Please see Exhibit A for a reconciliation of our non-GAAP financial measures to GAAP financial measures and related disclosures. ✓ We reassured stockholders that the amendment of equity awards was not intended to be a common practice and the Company does not have any current intention to amend outstanding awards in the future. ✓ In response to stockholder feedback, we continued to govern our executive compensation program based on four main principles: • Aligning with stockholder value creation; • Supporting a strong performance culture; • Setting target compensation at competitive levels in markets where we operate; and • Maximizing colleagues’ perceived value of our programs. For more information about what we heard and our response to the 2023 say on pay vote, please refer to page 32 in the Compensation Discussion and Analysis of this proxy statement. |
| STOCKHOLDERRIGHTS | ✓ Our bylaws provide for proxy access. ✓ Our bylaws allow holders of at least 20% of the voting power of the Company’s outstanding common stock to call a special meeting. ✓ Directors must receive a majority of the votes cast to be elected in uncontested elections. ✓ We do not have a stockholder rights plan, or poison pill, in place. |
| 3 | Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement |
| PROXY SUMMARY | (Continued) |
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| COMPENSATIONAND EQUITY | ✓ We have stock ownership guidelines for directors and senior executives. ✓ We prohibit hedging transactions by directors and colleagues, including senior executives. ✓ Directors and senior executives are prohibited from pledging Company securities as collateral for a loan or otherwise. |
| KEY EXECUTIVE COMPENSATION POLICIES AND PRACTICES | |
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| STOCKHOLDERALIGNEDEXECUTIVECOMPENSATIONPROGRAM | • Our senior executives have a high percentage of variable (‘‘at risk’’) pay. • Long-term incentive compensation for our senior executives is delivered in stock options and performance stock unit awards, the value of which depends on stock price appreciation or achievement of specific Company financial objectives and the Company’s relative total stockholder return (“TSR”) versus S&P 500® constituents. • We generally mitigate the potential dilutive effect of equity-based awards through our share repurchase program. • The Compensation Committee has engaged an independent compensation consultant. |
| COMPENSATIONRECOVERY POLICIES | • We maintain a compensation clawback policy for senior executives that provides for the recoupment of erroneously awarded compensation in the event of a financial restatement in accordance with Securities and Exchange Commission rules and New York Stock Exchange listing standards, which was filed as Exhibit 97.1 to our annual report on 10-K for the year ended December 31, 2023. |
| SEVERANCE ANDCHANGE INCONTROL | • Severance protections for our senior executives, including our CEO, are at a 1x multiple of base salary and annual bonus, with a pro-rata bonus for the year of termination. Further, we are required as a matter of policy to obtain stockholder approval for severance agreements with certain senior executives if they provide for cash severance that exceeds 2.99x the executive’s base salary and three-year average annual bonus award. • We provide “double-trigger” vesting of equity-based awards and payment of severance benefits following a change in control of the Company. • We do not provide golden parachute excise tax gross-ups in connection with a change in control of the Company. |
| Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement | 4 |
| PROXY SUMMARY | (Continued) |
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| SAY ON PAY | • We hold a nonbinding advisory vote on named executive officer compensation each year. • Stockholder support for our executive compensation program has generally been very strong. While our approval rate was 65% in 2023, it was 94% in 2022, 95% in 2021 and 93% or higher since 2013. • As a result, we expanded our stockholder outreach and offered to engage with 64% of our voting power to have the opportunity to hear our stockholders’ feedback and concerns. • We are committed to ongoing engagement with our stockholders and the major proxy advisory firms. For more information about what we heard and our response to the 2023 say on pay vote, please refer to page 32 in the Compensation Discussion and Analysis of this proxy statement. |
| HIGHLIGHTS OF OUR 2023 PERFORMANCE AND COMPENSATION | |
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| FINANCIALOBJECTIVES | • In 2023, Marsh McLennan delivered strong results as we successfully continued to invest in our talent and capabilities, both organically and through acquisitions. • Our GAAP EPS increased 25%. We delivered 17% growth in adjusted EPS.* • We generated $22.7 billion of revenue, an increase of 10% on a GAAP basis compared with 2022. We achieved 9% growth in underlying revenue. • Our GAAP operating income increased by 23%. We grew our adjusted operating income* by 17%, and expanded adjusted margin for our 16th consecutive year.* * Please see Exhibit A for a reconciliation of our non-GAAP financial measures to GAAP financial measures and related disclosures. |
| CAPITALMANAGEMENT | • In 2023, we deployed approximately $4 billion of capital across dividends, acquisitions and share repurchases. • We raised our quarterly dividend by 20%, paying total dividends of $1.3 billion in 2023 ($2.60 per share). We have increased our dividend every year since 2010. • We invested $1.6 billion in acquisitions that added to our talent, capabilities and scale. This was our largest year for acquisitions in nearly two decades, aside from 2019 when we acquired JLT. • We completed $1.15 billion of share repurchases. |
| POSITIONINGOUR BUSINESSFOR THE FUTURE | • We completed a seamless leadership transition in the role of President and Chief Executive Officer. • We continued to realize benefits of our recent investments in our talent. • We continue to optimize our portfolio with the sale of two administration businesses at Mercer, which closed on January 1, 2024. |
| 5 | Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement |
| PROXY SUMMARY | (Continued) |
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| STOCKPERFORMANCE | • Our 2023 total stockholder return (“TSR”) of 16.2% outperformed the S&P 500® Equal Weight Index (13.8%). Our TSR lagged the S&P 500® index TSR (26.3%) as a result of high stock appreciation in 2023 of certain technology companies with high market capitalizations. • Our five-year annualized TSR of 20.8% outperformed both the S&P 500® Equal Weight Index (13.7%) and the S&P 500® index TSR (15.7%). |
| EXECUTIVECOMPENSATION | • In February 2024, the Compensation Committee assessed management’s performance against our 2023 objectives. The Compensation Committee determined bonuses that were above target for all of our named executive officers commensurate with strong performance with respect to our financial and strategic objectives. • We achieved three-year annualized adjusted EPS growth of 17.9%* for our 2021 performance stock unit (“PSU”) awards. This was above our 7% target and 11% maximum for the award, resulting in the maximum payout at 200% of target. In addition, our three-year TSR was above the 75th percentile versus S&P 500® constituents*, which resulted in the maximum 1.25x relative TSR modifier; however, the modifier had no impact on the actual payout of awards since they were capped at the maximum 200% of target based on our adjusted EPS growth. * Please see “Definitions of Financial Performance Measures” on page 49 for information about the calculation of adjusted EPS growth and TSR for our PSU awards. |
| SENIOR EXECUTIVECHANGES | As part of a thoughtful and planned CEO and executive succession process, the Company made the following senior executive changes: Effective January 1, 2023 • John Q. Doyle was appointed President and Chief Executive Officer succeeding Daniel Glaser. Mr. Doyle previously served as Group President and Chief Operating Officer. • John J. Jones was appointed Chief Marketing and Communications Officer. Mr. Jones previously served as Chief Marking Officer of Marsh. Effective April 1, 2024 • Patrick Tomlinson will be appointed President and Chief Executive Officer of Mercer succeeding Martine Ferland upon her retirement. Mr. Tomlinson previously served as President of Mercer and Marsh McLennan US and Canada CEO. |
| Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement | 6 |
| PROXY SUMMARY | (Continued) |
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OUR BUSINESS AND STRATEGY TIE TO OUR EXECUTIVE COMPENSATION PROGRAM As a professional services firm, our business relies on the expertise and capabilities of our colleagues to lead in ways that meet our clients’ needs and, in turn, promote the long-term interests of our stockholders. We have designed our executive compensation program to achieve our business objectives and attract, motivate and retain highly talented individuals. We continued to evaluate performance in our executive compensation program against the following long-term financial and strategic objectives: Deliver on financial objectives. Generate top line growth through innovation and organic investments. Make Marsh McLennan a great place to work. Focus on strategic priorities, including mergers and acquisitions, technology and innovation. Execute a balanced capital management strategy. Promote a culture of integrity. The financial performance measures used in our executive compensation program, which include Company and business net operating income, EPS growth and relative TSR, are defined in “Definitions of Financial Performance Measures” on page 49. The strength of our financial performance and strategic accomplishments over the past five years is reflected in our TSR. The following graph compares the annual cumulative stockholder return for the five-year period ended December 31, 2023 of Marsh McLennan common stock with the S&P 500® Stock Index and the S&P 500® Financials Index, assuming an investment of $100 on December 31, 2018.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN ($100 invested 12/31/18 with dividends reinvested)
| 7 | Marsh & McLennan Companies, Inc. Notice of Annual Meeting and 2024 Proxy Statement |
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