Aon plc
For the period ended Jun 21, 2024. Filed Apr 29, 2024.
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Jun 21, 2024 · Filed Apr 29, 2024
Contents
Appendix A
Reconciliation of Non-GAAP Measures
Aon plc
Reconciliationof Non-GAAP Measures—Organic Revenue Growth and Free Cash Flow (Unaudited)
Organic Revenue Growth (Unaudited)
| Years Ended | |||||||
|---|---|---|---|---|---|---|---|
| (millions) | December 31, 2023 | December 31, 2022 | % Change | Less:CurrencyImpact (1) | Less:FiduciaryInvestmentIncome (2) | Less:Acquisitions,Divestitures &Other | OrganicRevenueGrowth (3) |
| Revenue | |||||||
| Commercial Risk Solutions | $7,043 | $6,715 | 5% | —% | 2% | (2)% | 5% |
| Reinsurance Solutions | 2,481 | 2,190 | 13 | (1) | 4 | — | 10 |
| Health Solutions | 2,433 | 2,224 | 9 | — | — | (1) | 10 |
| Wealth Solutions | 1,431 | 1,367 | 5 | — | — | 1 | 4 |
| Elimination | (12) | (17) | N/A | N/A | N/A | N/A | N/A |
| Total revenue | $13,376 | $12,479 | 7% | —% | 2% | (2)% | 7% |
| (1) | Currency impact represents the effect on prior year period results if they were translated at current period foreign exchange rates. |
| (2) | Fiduciary investment income for the years ended December 31, 2023, 2022, and 2021 was $274 million, $76 million, and $8 million, respectively. |
| (3) | Organic revenue growth includes the impact of certain intercompany activity and excludes the impact of changes in foreign exchange rates, fiduciary investment income, acquisitions, divestitures (including held for sale disposal groups, which had a 1% favorable impact on total organic revenue growth for the year-ended December 31, 2023), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges. |
Free Cash Flow (Unaudited)
| (millions) | 2023 | 2022 | % Change |
|---|---|---|---|
| Cash provided by operating activities | $3,435 | $3,219 | 7% |
| Capital expenditures | (252) | (196) | 29% |
| Free cash flows(1) | $3,183 | $3,023 | 5% |
| (1) | Free cash flows is defined as cash flow provided by operations minus capital expenditures and as a non-GAAP measure of our core operating performance and cash generating capabilities of our business operations. This non-GAAP measure does not imply or represent a precise calculation of residual cash flow available for discretionary expenditures. |
2024 Aon Proxy Statement A-1
Aon plc
Reconciliationof Non-GAAP Measures—Operating Income and Diluted Earnings Per Share (Unaudited)(1)
| (millions except percentages) | 2023 | 2022 | %Change |
|---|---|---|---|
| Revenue | $13,376 | $12,479 | 7% |
| Operating income | $3,785 | $3,669 | 3% |
| Amortization and impairment of intangible assets | 89 | 113 | (21)% |
| Accelerating Aon United Program expenses (2) | 135 | — | 100% |
| Legal settlements (3) | 197 | 58 | 240% |
| Transaction costs (4) | 17 | — | 100% |
| Operating income—as adjusted | $4,223 | $3,840 | 10% |
| Operating margin—as reported | 28.3% | 29.4% | |
| Operating margin—as adjusted | 31.6% | 30.8% |
| (millions except percentages) | 2023 | 2022 | %Change |
|---|---|---|---|
| Operating income—as adjusted | $4,223 | $3,840 | 10% |
| Interest income | 31 | 18 | 72% |
| Interest expense | (484) | (406) | 19% |
| Total Other income (expense)—as adjusted (5) | (136) | 45 | (402)% |
| Income before income taxes—as adjusted | 3,634 | 3,497 | 4% |
| Income tax expense (6) | 671 | 585 | 15% |
| Net income—as adjusted | 2,963 | 2,912 | 2% |
| Less: Net income attributable to noncontrolling interests | 64 | 57 | 12% |
| Net income attributable to Aon shareholders—as adjusted | 2,899 | 2,855 | 2% |
| Diluted net income per share attributable to Aon shareholders—as adjusted | $14.14 | $13.39 | 6% |
| Net income attributable to Aon shareholders—as reported | $2,564 | $2,589 | (1)% |
| Basic net income per share attributable to Aon shareholders | $12.60 | $12.23 | 3% |
| Diluted net income per share attributable to Aon shareholders—as reported | $12.51 | $12.14 | 3% |
| Weighted average ordinary shares outstanding—basic | 203.5 | 211.7 | (4)% |
| Weighted average ordinary shares outstanding—diluted | 205.0 | 213.2 | (4)% |
| Effective tax rates (6) | |||
| U.S. GAAP | 17.1% | 16.2% | |
| Non-GAAP | 18.5% | 16.7% | |
| (1) | Certain noteworthy items impacting operating income in 2023 and 2022 are described in this schedule. The items shown with the caption “as adjusted” are non-GAAP measures. |
| (2) | Total charges related to the Accelerating Aon United Program are expected to include technology-related costs to facilitate streamlining and simplifying operations, headcount reduction costs, and costs associated with asset impairments, including real estate consolidation costs. |
| (3) | In the fourth quarter of 2023, Aon recognized actual and anticipated legal settlement expenses in connection with transactions for which capital was arranged by a third party, Vesttoo Ltd. primarily in the form of letters of credit from third party banks that are alleged to have been fraudulent. Certain actual or anticipated legal settlements expenses totaling $197 million have been recognized in the current period, where certain potentially meaningful amounts may be recoverable in future periods. Additionally, a $58 million charge was recognized in the second quarter of 2022 with certain other legal settlements reached in matters unrelated to Vesttoo. |
| (4) | In the fourth quarter of 2023, we entered into a definitive agreement to acquire NFP. As part of the definitive agreement, certain transaction costs were incurred including advisory, legal, accounting, and other professional or consulting fees required to complete the acquisition. |
A-2 2024 Aon Proxy Statement
| (5) | To further our pension de-risking strategy, we settled certain pension obligations in the Netherlands through the purchase of annuities, where certain pension assets were liquidated to purchase the annuities. A non-cash settlement charge totaling $27 million was recognized in the second quarter of 2023, which is excluded from the 2023 Total Other income (expense)—as adjusted. We also purchased an annuity for portions of our U.S. pension plans that will settle certain obligations. A non-cash settlement charge totaling $170 million was recognized in the fourth quarter of 2022, which is excluded from the 2022 Total Other income (expense)—as adjusted. |
| (6) | Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with the anticipated sale of certain assets and liabilities classified as held for sale, certain pension and legal settlements, AAU Program expenses, and certain transaction costs and other charges related to the definitive agreement to acquire NFP, which are adjusted at the related jurisdictional rate. |
2024 Aon Proxy Statement A-3
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better—to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
| Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. | |
| Votes submitted electronically must be received by 5:00 P.M., Irish Standard Time on June 20, 2024. | |
| Online Go to www.envisionreports.com/AON or scan the QR code – login details are located in the shaded bar below. | |
| Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada | |
| Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/AON | |
| Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. | |
|---|---|
Annual General Meeting Proxy Card
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
| A | Management Proposals – The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2-7. |
|---|
| 1. Election of Directors: | For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 01 - Lester B. Knight | ☐ | ☐ | ☐ | 02 - Gregory C. Case | ☐ | ☐ | ☐ | 03 - Jose Antonio Álvarez | ☐ | ☐ | ☐ |
| 04 - Jin-Yong Cai | ☐ | ☐ | ☐ | 05 - Jeffrey C. Campbell | ☐ | ☐ | ☐ | 06 - Fulvio Conti | ☐ | ☐ | ☐ |
| 07 - Cheryl A. Francis | ☐ | ☐ | ☐ | 08 - Adriana Karaboutis | ☐ | ☐ | ☐ | 09 - Richard C. Notebaert | ☐ | ☐ | ☐ |
| 10 - Gloria Santona | ☐ | ☐ | ☐ | 11 - Sarah E. Smith | ☐ | ☐ | ☐ | 12 - Byron O. Spruell | ☐ | ☐ | ☐ |
| For | Against | Abstain | For | Against | Abstain | ||
| 2. Advisory vote to approve the compensation of the Company’s named executive officers. | ☐ | ☐ | ☐ | 3. Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. | ☐ | ☐ | ☐ |
|---|---|---|---|---|---|---|---|
| 4. Re-appoint Ernst & Young Chartered Accountants as the Company’s statutory auditor under Irish Law. | ☐ | ☐ | ☐ | 5. Authorize the Board or the Audit Committee of the Board to determine the remuneration of Ernst & Young Ireland, in its capacity as the Company’s statutory auditor under Irish law. | ☐ | ☐ | ☐ |
| 6. Authorize the Board to Issue Shares under Irish Law. | ☐ | ☐ | ☐ | 7. Authorize the Board to Opt-Out of Statutory Pre-Emption Rights Under Irish Law. | ☐ | ☐ | ☐ |
| Note: In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. | |||||||
| B | Non-Voting Items |
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| Change of Address – Please print new address below. | Comments – Please print your comments below. |
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| ∎ | 1 U P X |
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03ZTBC
2024 Annual Meeting Admission Ticket
2024 Annual General Meeting of Aon plc Shareholders
June 21, 2024, 8:30 a.m. Irish Standard Time
70 Sir John Rogerson’s Quay
Dublin 2 Ireland
To attend the meeting in person, upon arrival, please present this admission ticket and photo identification at the registration desk.
The 2024 Annual Meeting of Shareholders of Aon plc will also be held virtually via live webcast at meetnow.global/MLDMKCM.
To access the virtual meeting, you must have the 15-digit control number that is printed in the circle in the shaded bar
located on the reverse side of this form. Note that attending the Annual Meeting virtually will not allow you to vote at the Annual Meeting.
Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/AON
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
AON plc
Notice of 2024 Annual General Meeting of Shareholders
Proxy Solicited by Board of Directors for Annual Meeting – June 21, 2024
The Chair, Chief Executive Officer, Company Secretary, and any Assistant Company Secretary, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual General Meeting of Shareholders of Aon plc to be held on June 21, 2024 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and FOR Proposals 2-7.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
If you hold your shares in the Aon plc Canadian ESPP or Aon plc Direct Stock Purchase and Dividend Reinvestment Plan your vote must be received by 11:59 P.M., Eastern Time on June 18, 2024.
In the case of registered joint holders (i) only one need sign, and (ii) the vote of the senior holder who tenders a vote, whether in person or by proxy or (in the case of a corporation) by authorized representative, will alone be counted. For this purpose seniority will be determined by the order in which the names appear in the register of shareholders of Aon plc in respect of the joint holding.
(Items to be voted appear on reverse side)
| C | Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. |
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
| Date (mm/dd/yyyy) – Please print date below. | Signature 1 – Please keep signature within the box. | Signature 2 – Please keep signature within the box. |
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∎
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.