UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

Information Required In Proxy Statement

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

(Amendment No. )

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ARTHUR J. GALLAGHER & CO.

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Message To Our Stockholders

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.

☐ 

Dear Fellow Stockholder,

Fee paid previously with preliminary materials.

March 22, 2024

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

LOGO

LOGO

March 22, 2022

Dear Fellow Stockholder,

On behalf of our Board of Directors, I invite you to attend our 2022 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 2021. On a combined basis, our core brokerage and risk management segments produced adjusted revenue1 growth of 13.1% (to $6.9 billion) and adjusted EBITDAC1 growth of 17.2% (to $2.2 billion). We achieved organic revenue growth of 8.6% in our core brokerage and risk management segments, our highest level of organic revenue growth in nearly two decades. We completed acquisitions representing more than $1.0 billion in estimated annualized revenue, including the treaty reinsurance brokerage operations of Willis Towers Watson plc, the largest and most strategic acquisition in our history. It was truly a fantastic year for our franchise, and I am excited about our future.

Board Contributions to our Success. 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. In 2021, we added Teresa H. Clarke as a director and member of the Audit Committee, continuing our commitment to board refreshment and diversity. Our directors’ diverse skill sets and independent thought leadership have been invaluable to me and the management team in establishing our long-term business strategy and executing on that strategy. I am grateful to all of our directors for their dedicated service and I encourage you to support each director nominee on this year’s ballot.

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 environmental, social and governance (ESG) matters, executive compensation, and our proposed long-term incentive plan. 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. Now, more than ever, I believe that our culture 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. Our ability to create long-term value for stockholders depends upon our most important asset, our people. As a testament to our people and their commitment to doing business the right way, this past month we were recognized by the Ethisphere Institute for the 11th consecutive year as one of the World’s Most Ethical Companies®.

Looking Ahead. During the course of 2021, we witnessed improvements in economic conditions, business and consumer confidence, and the financial health of our clients. Clients added exposures and coverages to their existing insurance programs, payrolls and covered lives increased, demand for our benefits consulting services grew, and we experienced growth in new arising claim counts within our claims handling business. Many of these favorable dynamics remain in place today, but there are also challenges, including geopolitical instability (for example, the conflict in Ukraine), inflation, supply chain constraints, rising interest rates, and a tight labor market. These conditions create uncertainty but, as we have done in the past, I believe our team will rise to the occasion and meet the challenges that come our way in 2022. With more than 39,000 colleagues continuing to deliver the very best insurance and risk management advice to clients and prospects, day-in and day-out, I am confident that we are positioned for another outstanding year.

On behalf of our Board of Directors, thank you for your continued support. We look forward to welcoming you at our 2022 Annual Meeting.

Sincerely,

LOGO

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.

LOGOOur 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,

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J. Patrick Gallagher, Jr.

Chairman of the Board and

President and Chief Executive Officer

1

See Exhibit BA for reconciliations of non-GAAP measures.

Arthur J. Gallagher & Co.

2850 Golf Road

Rolling Meadows, Illinois 60008-4050

Notice of 20222024 Annual Meeting of Stockholders

Dear Stockholder:

We are pleased to invite you to the 20222024 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 10, 2022,7, 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 109 nominees named in the accompanying Proxy Statement as directors to hold office until our 20232025 Annual Meeting (Item 1)

FOR each nominee

•  To approve the Arthur J. Gallagher & Co. 2022 Long-Term Incentive Plan, including 13,500,000 shares authorized for issuance thereunder (Item 2)

FOR

•
Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20222024 (Item 3)2)

FOR

•
Approve, on an advisory basis, the compensation of our named executive officers (Item 4)3)

FOR

Stockholders of record at the close of business on March 16, 202218, 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 4648 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 16, 2022,18, 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, and view the list of registered stockholders as of the record date during the meeting, stockholders of record should go to the meeting website at www.virtualshareholdermeeting.com/AJG2022,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.

An electronic list of the stockholders of record as of the record date will be available for examination by stockholders at the Annual Meeting website during the meeting. For information on how to access the stockholder list from April 30, 2022 until the meeting, please contact our VP – Investor Relations, whose contact information is at www.ajg.com/ir.

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

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LOGO

WALTER D. BAY

GENERAL COUNSEL AND SECRETARY

March 22, 20222024

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders

to Be Held on May 10, 2022:7, 2024:

We are making this Notice of Annual Meeting, this Proxy Statement, our 20212023 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, 2022.2024.

 

Proxy Statement

Table of Contents

CORPORATE GOVERNANCE

Proxy Statement

Table of Contents

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Corporate Governance

1

 

 

FREQUENTLY REFERENCED

TOPICS

Item 1 – Election of Directors

1

 

Key Governance Practices

8

 

Board Leadership Structure

8

 

 

 

 

 

Director Independence

9

 

 

Compensation Committee Interlocks and

Insider 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

1

Board Leadership Structure

6

Director Independence

6

Compensation Committee Interlocks and Insider Participation

6

Board’s Role in Risk Oversight

7

Environmental, Social and Governance (ESG) Oversight and Activities

10

Other Board Matters

11

Director Compensation

12

Certain Relationships and Related Person Transactions

13

Security Ownership by Certain Beneficial Owners and Management

14

Item 2 – Approval of the Arthur J. Gallagher  & Co. 2022 Long-Term Incentive Plan, Including Approval of 13,500,000 Shares Authorized for Issuance Thereunder

16

Equity Compensation Plan Information

21
AUDIT MATTERS

Item 3 –  Ratification of Appointment of Independent Auditor

22

Audit Committee Report

23
EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

24

Overview of Our Executive Compensation Program

24

2021 Compensation

26

Compensation Decision-Making Process

32

Comparative Market Assessment

33

Compensation Committee Report

34

Executive Compensation Tables

35

Item 4 –  Advisory Vote to Approve the Compensation of Our Named Executive Officers

45

CEO Pay Ratio

45
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING46
EXHIBITS

Exhibit A: Arthur J. Gallagher & Co. 2022 Long-Term Incentive Plan

A-1

Exhibit B: Information Regarding Non-GAAP Measures

B-1

Exhibit C: Resources

C-1

LOGO

2022 PROXY STATEMENT

i

Corporate Governance

ItemITEM 1 – Election of Directors

Evaluation Process for Director Candidates

The Nominating/Governance Committee considers director candidates suggested by stockholders, management or other members of the Board of Directors (Board) and may hire consultants or search firms to help identify and evaluate potential director candidates. In some cases, nominees have been individuals known to Board members or others through business or other relationships.others. In the case of Teresa H. Clarke,Deborah Caplan, one of our Independent Lead Directorindependent directors initially identified her as a potential director nominee. Prior to her nomination, Ms. ClarkeCaplan met separately with the Chairman and CEO and each member of the Nominating/Governance Committee (which includes our Independent Lead Director), who considered her candidacy. After review and discussion, the Nominating/Governance Committee recommended, and the Board approved, Ms. Clarke’s election as a director on July 28, 2021.Caplan's nomination at the annual meeting. For information regarding how stockholders can submit a director candidate for consideration by the Nominating/Governance Committee, as well as for information regarding “proxy access,” see pages 47-48.page 50.

The Nominating/Governance Committee evaluates director candidates by considering their judgment, qualifications, attributes, skills, integrity, gender, racial/ethnic diversity, international business or other experience relevant to our global activities and other factors it deems appropriate. The Committee looks for candidates who are leaders in the organizations with which they are affiliated and have experience in positions with a high degree of responsibility. The Committee seeks candidates free from relationships or conflicts of interest that could interfere with the director’s duties to Gallagher or our stockholders. The Committee also evaluates candidates’ independence and takes into account applicable requirements under Securities and Exchange Commission (SEC) rules and New York Stock Exchange (NYSE) listing standards.

Board Diversity

Our Board of Directors reflectsnominees reflect diversity of gender, race/ethnicity, tenure, nationality, age, professional background and viewpoints. Of our ten directors,nine director nominees, three are women and two are racially/ethnically diverse. We are committed to maintaining a diverse and inclusive Board. In 2020, ourOur Board has adopted the “Rooney Rule” for director searches. Under this policy, our Governance Guidelines provide that, when recruiting director candidates, the Nominating/Governance Committee includes, and requests that any search firm it engages include, qualified women and racially/ethnically diverse persons in the pool from which new director nominees are chosen. The Committee actively seeks Board members from diverse backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. The Committee assesses the effectiveness of the Board’s diversity search policy as part of its annual review process.

Board Nominees and Vote Required

Upon the recommendation of the Nominating/Governance Committee, the Board has nominated our Chairman and CEOChief Executive Officer (CEO) and each of the nineadditional eight individuals listed below to hold office until the next annual meeting and the election and qualification of their successors or, if earlier, until their resignation, death or removal. EachOther than Ms. Caplan, each of the nominees currently serves on the Board, and hasall of the nominees have consented to serve for a new termon the Board if elected. However, ifIf any nominee should become unable or unwilling to serve, the Board may nominate another person to stand for election or reduce the size of the Board. William Bax, a current director, is retiring from the Board and is not standing for re-election.

Each director nominee who receives more “FOR” votes than “AGAINST” votes at the Annual Meeting will be elected. Abstentions will have the same effect as a vote “AGAINST.” Any incumbent director nominee who receives a greater number of votes “AGAINST” election than votes “FOR” election is required to tender an offer of resignation for consideration by the Nominating/Governance Committee in accordance with our Governance Guidelines.

2024 PROXY STATEMENT

1

Item 1 – Election of Directors

Director Qualifications

The tableWe have summarized below summarizes the key qualifications and areas of experience that led our Board to conclude that each non-management director nominee is qualified to serve on our Board, butBoard; however, this is not intended to be an exhaustive list of their qualifications or contributions.contributions to our Board.

Non-Management

Director Nominees

CEO / COO

Experience

Finance /

Capital

Markets

Change
Management

Risk

Management /

Governance

Sales and

Marketing

International

Insurance

Industry

Independence

Non-Management Directors

CEO
Experience

Finance /
Capital
Markets

Legal /
Compliance /

Regulatory

Risk
Management /

Governance

Sales and
Marketing

International

Insurance
Industry

Diversity

(gender,
racial /
ethnic)

  Independence  

Sherry Barrat

X

X

X

X

X

X

X

Sherry S. Barrat

X

X

X

X

X

X

X

Deborah Caplan

X

X

X

X

X

William L. Bax

X

X

X

Teresa Clarke

X

X

X

X

X

X

Teresa H. Clarke

X

X

X

X

X

X

John Coldman

X

X

X

X

D. John Coldman

X

X

X

X

David S. Johnson

(Lead Independent Director)

X

X

X

X

X

X

X

X

X

X

X

Kay W. McCurdy

Chris Miskel

X

X

X

X

X

X

X

X

X

X

X

Christopher C. Miskel

Ralph Nicoletti

X

X

X

X

X

X

X

X

X

Ralph J. Nicoletti

Norman Rosenthal

X

X

X

X

X

Norman L. Rosenthal

X

X

X

X

X

X

X

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These percentages include our Chairman and CEO, Pat Gallagher.

LOGO

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2022 PROXY STATEMENT

1

ITEM 1 – ELECTION OF DIRECTORS

LOGO

THE BOARD RECOMMENDS THAT YOU VOTE FOR

THE ELECTION OF EACH OF THE DIRECTOR NOMINEES

LISTED BELOWThe Board recommends that you vote “FOR” the election of each of the director nominees listed below

2

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Item 1 – Election of Directors

Sherry S. Barratimg134299666_8.jpg 

Age: 74

Age: 72Director since: 2013

Director Since: 2013

Independent

Committee Memberships:

•
Compensation (Chair)
•
Nominating/Governance

Nominating/Governance

Risk and Compliance

Public Company Boards: 2 3

Independent

Ms. Barrat retired in 2012 as Vice Chairman of Northern Trust Corporation, a global financial holding company headquartered in Chicago, Illinois. She assumed the role of Vice Chairman in March 2011. From 2006 to 2011, Ms. Barrat served as Global President of Northern Trust’s personal financial services business, which provides asset management, fiduciary, estate and financial planning, and private banking services to individuals and families around the world. During her 22-year career at Northern Trust, Ms. Barrat served in various other leadership roles and as a member of the Northern Trust Management Committee. Since 1998, Ms. Barrat has served as a director of NextEra Energy, Inc., one of the largest publicly traded electric power companies in the United States, where she serves as lead director and on the compensation and governance & nominating committees. Since 2013, Ms. Barrat has also served as an independent trustee or director of certain Prudential Insurance mutual funds, where she serves as vice chair of the investment review committee and a member of the governance & nominating and compliance committees.

SHERRY BARRAT

Skills and Qualifications

Ms. Barrat’sBarrat's qualifications to serve on our Board and chair our Compensation Committee include her executive management, operational and financial experience, in particular her deep understanding of the financial services industry and her experience leading a global client service and sales organization. Her roles at Northern Trust, NextEra Energy and Prudential Insurance mutual funds have given her experience navigating complex and changing regulatory environments. She also has significant experience with change management, including planning and implementing a CEO succession plan as part of NextEra Energy's board.

Career Highlights

•
Northern Trust Corporation (1990-2012)
o
Vice Chairman
o
President, Personal Financial Services
o
Member, Management Committee

Global financial holding company


Current Public Company Boards

•
NextEra Energy, Inc. (1998-present)
o
Lead Director
o
Executive Committee
o
Compensation Committee
o
Governance & Nominating Committee
•
Prudential Insurance mutual funds (2013-present)
o
Independent trustee or director of various funds
o
Vice Chair, Investment Review Committee
o
Governance & Nominating Committee
o
Compliance Committee

William L. Baximg134299666_9.jpg 

Age: 61

Age: 78

Director Since: 2006

Independent

Committee Memberships:

Audit

Risk and Compliance (Chair)

Public Company Boards: 12

Independent

Mr. Bax was Managing Partner of the Chicago office of PricewaterhouseCoopers (PwC), an international accounting, auditing and consulting firm, from 1997 until his retirement in 2003, and was a partner in the firm for 26 years. Mr. Bax previously served as a director of Sears, Roebuck & Co., a publicly traded retail company, from 2003 to 2005; Andrew Corporation, a publicly traded communications products company, from 2006 to 2007; and mutual fund companies Northern Funds/Northern Institutional Funds, from 2006 to 2018.

DEBORAH CAPLAN

Skills and Qualifications

Mr. Bax’sMs. Caplan's qualifications to serve on our Board include her senior executive experience, a history of building corporate cultures founded on strong values and her extensive operational experience. Her senior executive roles at NextEra Energy, one of the largest clean energy companies in the United States, have given her valuable experience navigating a complex regulatory environment and the risks and opportunities presented by climate change. In addition, her experience as a human resources leader and member of other public company boards will enable her to contribute to sound corporate governance and executive compensation practices at the company.

Career Highlights

•
NextEra Energy, Inc. (2011-2024)
Electric power and clean energy company
o
Executive Vice President, Human Resources and Corporate Services
o
Vice President and Chief Operating Officer, Florida Power & Light Company
o
Vice President of Integrated Supply Chain
•
General Electric Company (prior to 2011)
Global conglomerate
o
Senior Vice President of Global Operations for Vendor Financial Services, GE Capital
o
Other senior roles in manufacturing and product development, GE Aircraft Engines

Current Public Company Boards

•
Mid-America Apartment Communities, Inc. (2023-present)
o
Compensation Committee
o
Nominating & Corporate Governance Committee

Previous Public Company Boards

•
Terminix Global Holdings, Inc. (2019-2022)
o
Chair, Compensation Committee
o
Environmental, Health and Safety Committee

Other Board Experience

•
Association to Advance Collegiate Schools of our Business (2019-present)
o
Executive Committee
o
Chair, Global Business Practices Council

2024 PROXY STATEMENT

3

Item 1 – Election of Directors

img134299666_10.jpg 

Age: 61

Director since: 2021

Committee Memberships:

•
Audit
•
Risk and Compliance Committee include his 26 years as a partner and six years as head of PwC’s Chicago office, his tenure on the boards of two public companies and his experience advising public companies on accounting and disclosure issues.

2

2022 PROXY STATEMENT

ITEM 1 – ELECTION OF DIRECTORS

Teresa H. Clarke

Age: 59

Director Since: 2021

Independent

Committee Memberships:

Audit

Public Company Boards:2

Independent

Since 2010, Ms. Clarke has served as Chair and CEO of Africa.com LLC, a holding company with various digital media assets showcasing Africa-related content. Prior to 2010, Ms. Clarke served in various leadership roles at Goldman Sachs & Co., a publicly traded investment banking and securities firm. During her tenure of over twelve years at Goldman Sachs, she led corporate finance and merger & acquisition transactions for corporate clients in the industrials and real estate sectors. From 2016 to 2020, Ms. Clarke served as a director of Change Financial Limited, a publicly traded fintech company (Australian Stock Exchange), where she served as Board Chair and as a member of the Audit Committee. From 2016 to 2020, she also served as a director of Cim Group Ltd, a publicly traded financial services company (Mauritius Stock Exchange), where she served as a member of the corporate governance committee. Since 2021, Ms. Clarke has served as a director and audit committee member of American Tower Corporation, a publicly traded global real estate investment trust that owns, operates and develops multitenant communications real estate.

TERESA CLARKE

Skills and Qualifications


Ms. Clarke’sClarke's qualifications to serve on our Board include her extensive investment bankinginternational and financial services expertise, particularly in the areas of corporate finance and mergers & acquisitions. In addition, her roles leading or overseeing technology companies have given her valuable experience in change management, including navigating changing regulatory environments and pivoting businesses to take advantage of new technologies.

Career Highlights

•
Africa.com LLC (2010-present)
Africa-related digital media content company
o
Chair and Chief Executive Officer
•
Goldman Sachs & Co. (Prior to 2010)
Global financial services firm
o
Managing Director, Investment Banking


Current Public Company Boards

•
American Tower Corporation (2021-present)
o
Audit Committee


Previous Public Company Boards

•
Change Financial Limited (2016-2020) - Australian Stock Exchange
o
Board Chair
o
Audit Committee
•
Cim Group Ltd (2016-2020) - Mauritius Stock Exchange
o
Corporate Governance Committee


Community Involvement

•
Smithsonian National Museum of African Art (2022-present)
o
Chair, Advisory Board

D. John Coldman, OBEimg134299666_11.jpg 

Age: 76

Age: 74Director since: 2014

Director Since: 2014Committee Memberships:

•
Risk and Compliance

Public Company Boards:1

JOHN COLDMAN, OBE

Mr. Coldman beganColdman's qualifications to serve on our Board include his career at WT Greig, a reinsurance broker. In 1988, he became Managing Directorinternational insurance industry knowledge, his experience within the Lloyd's and London marketplaces, his experience with public company matters and mergers and acquisitions and his significant expertise in 1996 was appointed Chairman of reinsurance.

Career Highlights

•
The Benfield Group the world’s leading independent reinsurance(1988-2008)
Reinsurance and risk intermediary until its acquisition by Aon Corporation in 2008. From 2001 to 2006, Mr. Coldman served as Deputy company
o
Chairman and a Member of Council of Lloyd’s of London. He is also a past Chairman of Brit PLC, a publicly traded global specialty insurer and reinsurer, from 1996 to 2000, and
o
Managing Director

Previous Public Company Boards

•
Omega Insurance Holdings Limited a publicly traded insurance and reinsurance group, from 2010 to 2012. Mr. Coldman served as the non-executive(2010-2012) - London Stock Exchange
o
Chairman
•
Brit PLC (1996-2000) - London Stock Exchange
o
Chairman

Other Board Experience

•
Lloyd’s of London (2001-2006)
o
Deputy Chairman
o
Member of Council
•
Roodlane Medical Ltd., a privately held healthcare services provider, from 2007 to 2011. (2007-2011)
o
Non-Executive Chairman

Community Involvement

•
A U.K. citizen, Mr. Coldman was appointed an Officer of the Order of the British Empire (OBE) in the Queen’sQueen's Birthday Honours List 2017, for “services to business, young people, and charity.”

Skills and Qualifications

Mr. Coldman’s qualifications to serve on our Board include his international insurance industry knowledge, his experience within the Lloyd’s and London marketplaces, his experience with public company matters and mergers and acquisitions, and his significant expertise in reinsurance.

In October 2021, Mr. Coldman entered into an agreement with one of our U.K. subsidiaries to provide limited advisory services in connection with Gallagher Re, our reinsurance brokerage operation, which includes the treaty reinsurance brokerage operation acquired from Willis Towers Watson in December 2021. As a result of this agreement, Mr. Coldman is no longer considered independent. The Nominating/Governance Committee reviewed Mr. Coldman’s qualifications in light of this lack of independence and determined that Mr. Coldman possesses expertise that will be valuable to the Board’s deliberations and oversight of Gallagher Re and the integration of the Willis Re acquisition.


LOGO

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2022 PROXY STATEMENT

3

ITEM 1 – ELECTION OF DIRECTORS

Item 1 – Election of Directors

J. Patrick Gallagher, Jr.  img134299666_12.jpg 

Age: 72

Age: 70Director since: 1986

Director Since: 1986

Chairman of the Board Since:

2006

Public Company Boards:1

Chairman Since 2006

Mr. Gallagher has spent his entire career with Arthur J. Gallagher & Co. in a variety of management positions, starting as a Production Account Executive in 1974, then serving as Vice President of Operations from 1985 to 1990, as President and Chief Operating Officer from 1990 to 1995, and as President and Chief Executive Officer since 1995. From 2011 to 2019, Mr. Gallagher served on the board of directors of InnerWorkings, Inc., a global, publicly traded provider of managed print, packaging and promotional solutions, where he was appointed to its compensation and nominating/governance committees.

PAT GALLAGHER

Skills and Qualifications


Mr. Gallagher is the only member of management serving on the Board. His 4850 years of experience with our company and 3638 years of service on the Board, his deep knowledge of our company and the insurance industry and his extensive leadership experience greatly enhance the Board’sBoard's decision making and enable Mr. Gallagher to serve as a highly effective Chairman of the Board.

Career Highlights

David S. Johnson

Age: 65

Director Since: 2003

Independent Lead Director
Since: 2016

Committee Memberships:

Compensation

Nominating/Governance

Risk and Compliance

Public Company Boards: 1

Mr. Johnson served as

•
Arthur J. Gallagher & Co. (1974-present)
o
Chairman
o
Chief Executive Officer of North America for Aryzta AG, a publicly traded global food business, from 2018 to 2020, and as Non-Executive Chairman from January 2020 to February 2021. From 2009 to 2017, he served as President and Chief Executive Officer of the Americas for Barry Callebaut AG, the world’s largest manufacturer of cocoa and chocolate products, where he also served on the global executive committee. Mr. Johnson served as President and Chief Executive Officer, and as a member of the board, of Michael Foods, Inc., a food processor and distributor, from 2008 to 2009, and as Michael Foods’
o
President and Chief Operating Officer from 2007 to 2008. From 1986 to 2006, Mr. Johnson served in a variety of senior management roles at Kraft Foods Global, Inc., a global food and beverage company, most recently as
o
Vice President of Kraft Foods North America,Operations
o
Production Account Executive

Previous Public Company Boards

•
InnerWorkings, Inc. (2011-2019)
o
Compensation Committee
o
Nominating/Governance Committee

Insurance Industry Affiliations

•
The Institutes, previously known as American Institute for Chartered Property Casualty Underwriters (2003-present)
o
Board of Trustees

Community Involvement

•
Mr. Gallagher was granted Freedom of the City of London in 2007 by the city’s Lord Mayor in recognition of his outstanding contribution to the Lloyd’s insurance market and as a memberfor his support of Kraft Foods’ Management Committee. Prior to that, he held senior positions in marketing, strategy, operations, procurementthe Gallagher Lifelong Learning scholarships.

img134299666_13.jpg 

Age: 67

Director since: 2003

Committee Memberships:

•
Compensation
•
Nominating/Governance
•
Risk and general management at Kraft Foods.Compliance

Public Company Boards: 1

Independent Lead Director since 2016

DAVID JOHNSON

Skills and Qualifications


Mr. Johnson’sJohnson's qualifications to serve on our Board and as Independent Lead Director include his experience as a senior executive of global businesses and his knowledge of corporate governance and executive compensation best practices.practices and his experience as a senior executive of global businesses. These roles have provided him with significant experience in change management and navigating complex regulatory environments.

Career Highlights

•
Aryzta AG, now Aspire Bakeries (2018-2021)
Global food business
o
Non-Executive Chairman, North America
o
Chief Executive Officer, North America
•
Barry Callebaut AG (2009-2017)
Cocoa and chocolate products manufacturer
o
President and Chief Executive Officer, Americas
o
Member, Global Executive Committee
•
Michael Foods, Inc. (2007-2009)
Food processor and distributor
o
President, Chief Executive Officer and Board Member
o
Chief Operating Officer
•
Kraft Foods Global, Inc. (prior to 2007)
o
President, Kraft Foods North America
o
Member, Management Committee
o
Other senior roles in marketing, strategy, operations, procurement and general management

Global food and beverage company

Other Board Experience

•
OC Flavors, Inc. (2022-present)
•
Jacobs Holding AG (2018-2021)
o
Board of Advisors
•
Michael Foods, Inc. (2008-2009)

2024 PROXY STATEMENT

5

Item 1 – Election of Directors

Kay W. McCurdyimg134299666_14.jpg 

Age: 49

Age: 71Director since: 2020

Director Since: 2005

Independent

Committee Memberships:

Compensation

•
Nominating/Governance (Chair)

•
Compensation

Risk and Compliance

Public Company Boards:1

Independent

Ms. McCurdy practiced corporate and finance law from 1975 to 2019 at the law firm of Locke Lord LLP, where she was a partner from 1983 to 2012 and Of Counsel from 2012 to 2019. She served on the firm’s Executive Committee from 2004 to 2006. During her career as a corporate and finance attorney, Ms. McCurdy represented numerous companies on a wide range of matters, including financing transactions, mergers and acquisitions, securities offerings, executive compensation and corporate governance. Ms. McCurdy served as a director of Trek Bicycle Corporation, a leading bicycle manufacturer, from 1998 to 2007. Ms. McCurdy is a National Association of Corporate Directors (NACD) Certified Director and a director and secretary of the Chicago chapter of NACD.

Skills and Qualifications

Ms. McCurdy’sCHRIS MISKEL

Mr. Miskel's qualifications to serve on our Board and chair theour Nominating/Governance Committee include her experience advising companies regarding legal, public disclosure, corporate governance, mergers and acquisitions and executive compensation issues. Ms. McCurdy is also NACD Directorship Certified.

4

2022 PROXY STATEMENT

ITEM 1 – ELECTION OF DIRECTORS

    Christopher C. Miskel

     Age: 47

     Director Since: 2020

     Independent

Committee Memberships:

     Audit

Public Company Boards: 1

Since 2017, Mr. Miskel has served as President and Chief Executive Officer of Versiti, Inc., one of the largest independent blood products supply companies in the United States. From 2013 to 2017, Mr. Miskel served in senior management roles at Baxter International Inc., a publicly traded healthcare company, Baxalta Incorporated, which spun off from Baxter in July 2015, and Shire plc, which acquired Baxalta in June 2016. During this period, Mr. Miskel served as Vice President, U.S. BioScience National Accounts from 2013 to 2014, as Vice President, Plasma Strategy and New Product Development from 2014 to 2015, and as Head – Global Immunology from 2015 to 2017. Prior to 2013, he served in roles of increasing responsibility at Eli Lilly and Company, a publicly traded healthcare company.

Skills and Qualifications

Mr. Miskel’s qualifications to serve on our Board include his senior executive experience, his involvement in setting strategy for large businesses such as Lilly, Baxter, Baxalta and Shire, his extensive sales and marketing experience, and his knowledge of the healthcare industry and related privacy and cybersecurity issues. His senior roles in the pharmaceutical industry have also provided him with experience navigating complex and changing regulatory environments.

    Ralph J. NicolettiCareer Highlights

Age: 64

Director Since: 2016

Independent

Committee Memberships:

     Audit (Chair)

Public Company Boards: 1

Mr. Nicoletti served as Senior Vice

•
Versiti, Inc. (2017-present)
Blood products supply company
o
President and Chief FinancialExecutive Officer
•
Baxter / Baxalta / Shire (2013-2017) – Baxalta Incorporated spun off from Baxter International Inc. in 2015 and was acquired by Shire plc in 2016
Global healthcare and pharmaceutical companies
o
Head of The AZEK Company, Inc., a publicly traded building products company, from January 2019 to August 2021. Prior to joining AZEK, Mr. Nicoletti served as Executive Immunology (2015-2017)
o
Vice President, Plasma Strategy and Chief Financial Officer of Newell Brands, Inc., a publicly traded consumer goods company, from June 2016 to December 2018; as Executive New Products, Global BioTherapeutics (2014-2015)
o
Vice President, U.S. BioScience National Accounts (2013-2014)
•
Eli Lilly and Chief Financial OfficerCompany (prior to 2013)
Pharmaceutical company
o
General Manager, Lilly Australia and New Zealand
o
Other senior roles

Community Involvement

•
Butler University (2021-present)
o
Board of Tiffany & Co., a publicly traded jewelry business, from April 2014 to May 2016; and as Executive Vice President and Chief Financial OfficerTrustees
•
Medical College of Cigna Corporation, a publicly traded global health services and insurance company, from 2011 to 2013; andWisconsin (2018-present)
o
Board of Alberto Culver, Inc., a publicly traded manufacturer and distributor of beauty products, from 2007 to 2011. Prior to that, Mr. Nicoletti held a number of financial management positions at Kraft Foods, Inc., finishing his tenure there as Senior Vice President of Corporate Audit. Mr. Nicoletti also serves as a member of the Board and Chair of the Audit Committee of Cooper’s Hawk Winery & Restaurants.Directors


Skills and Qualificationsimg134299666_15.jpg 

Age: 66

Director since: 2016

Committee Memberships:

•
Audit (Chair)

Public Company Boards: 1

Independent

RALPH NICOLETTI

Mr. Nicoletti’sNicoletti's qualifications to serve on our Board and chair our Audit Committee include his experience as a senior executive of global businesses, his deep financial management expertise, capital markets experience and his experience managing privacy and cybersecurity issues.

Career Highlights

•
The AZEK Company, Inc. (2019-2021)
Building products company
o
Senior Vice President and Chief Financial Officer
•
Newell Brands, Inc. (2016-2018)
o
Executive Vice President and Chief Financial Officer

Global consumer goods company

•
Tiffany & Co. (2014-2016)
o
Executive Vice President and Chief Financial Officer

Global luxury jewelry company

•
Cigna Corporation (2011-2013)
o
Chief Financial Officer

Global healthcare and insurance company

•
Alberto Culver, Inc. (2007-2011)
o
Executive Vice President and Chief Financial Officer

Beauty products company

•
Kraft Foods, Inc. (prior to 2007)
Global food and beverage company
o
Senior Vice President of Corporate Audit
o
Other senior financial management roles

Other Board Experience

•
GPA Global (2023-present)
o
Chair, Audit Committee
•
Cooper’s Hawk Winery & Restaurants (2021-present)
o
Chair, Audit Committee

6

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Item 1 – Election of Directors

    Norman L. Rosenthal,
    Ph.D.img134299666_16.jpg 

Age: 72

     Age: 70Director since: 2008

     Director Since: 2008

     Independent

Committee Memberships:

•
Risk and Compliance (Chair)
•
Audit

     Audit

Public Company Boards:1

Independent

Since 1996, Dr. Rosenthal has been President of Norman L. Rosenthal & Associates, Inc., a management consulting firm that specializes in the property and casualty insurance industry. He is also an affiliated partner of Lindsay Goldberg LLC, a private equity firm. Dr. Rosenthal served on the board and as a member of the compensation committee of National Interstate Corporation, a publicly traded insurance company specializing in commercial transportation exposures, from June 2015 until it was acquired by another insurance company in November 2016. He currently serves on the board of The Plymouth Rock Company, a privately held group of auto and homeowners’ insurance companies, as well as that of its subsidiary, Plymouth Rock Management Company of New Jersey. Prior to 1996, Dr. Rosenthal spent 15 years as a securities analyst in the property and casualty insurance industry at Morgan Stanley & Co., finishing his tenure there as Managing Director. Dr. Rosenthal holds a Ph.D. in Business and Applied Economics, with an insurance focus, from the Wharton School of the University of Pennsylvania.

NORMAN ROSENTHAL, PH.D.

Skills and Qualifications


Dr. Rosenthal’sRosenthal's qualifications to serve on our Board and chair our Risk and Compliance Committee include his extensive experience in the insurance and finance industries, including extensive experience serving on public company boards of insurance, reinsurance and reinsurance services companies, and his experience as a securities analyst.analyst in his prior executive roles at Morgan Stanley.


Career Highlights

•
Norman L. Rosenthal & Associates, Inc. (1996-present)
o
President

P&C industry management consulting firm

•
Lindsay Goldberg LLC (2016-present)
o
Affiliated Partner

Private equity firm

•
Morgan Stanley & Co. (prior to 1996)
o
Managing Director

Global investment bank

Previous Public Company Boards

•
National Interstate Corporation (2015-2016)
•
Aspen Insurance Holdings, Ltd. (2002-2009)
•
Mutual Risk Management Ltd. (1997-2002)
•
Vesta Insurance Group, Inc. (1996-1999)

Other Board Experience

•
The Plymouth Rock Company (2009-present)
•
The Plymouth Rock Management Company of New Jersey (2016-present)

LOGO

2024 PROXY STATEMENT

2022 PROXY STATEMENT

5

7

Corporate Governance

Key Governance Practices

The Board and Nominating/Governance Committee continually evaluate governance best practices and consider modifications to our corporate governance that support our strategic objectives, protect the long-term interests of our stockholders and promote management accountability. Set forth below are several key governance practices:

•
Annual majority vote, with resignation policy if not elected
•
Demonstrated Board refreshment with emphasis on diverse skill set
•
Our Governance Guidelines include a retirement policy for directors
•
Proxy access (3% ownership / 3 years / group of up to 20 / greater of 20% of Board seats or 2 directors)
•
Independent Lead Director with clearly identified role
•
Annual Board and committee self-evaluations
•
Directors are subject to stock ownership guidelines
•
Significant portion of Board compensation in the form of equity awards
•
Regular executive sessions of the Board and committees
•
Board and committee oversight of strategy, risk and sustainability initiatives
•
All current Audit Committee members are financial experts under SEC rules
•
Robust stockholder engagement program

CORPORATE GOVERNANCE

Board Leadership Structure

Pat Gallagher currently serves as Chairman of the Board and CEO. With the exception of the ChairmanMessrs. Gallagher and Mr. Coldman, all Board members are independent and actively oversee the activities of the Chairman and other members of the senior management team. We believe that our Board leadership structure allows us to take advantage of Pat Gallagher’s extensive experience and knowledge of our business, which enriches the Board’s decision making. Pat Gallagher’s role as Chairman and CEO also enhances communication and coordination between management and the Board on critical issues.

David Johnson has served as our independentIndependent Lead Director since 2016. The duties and responsibilities of the independentIndependent Lead Director are set forth below.

Independent Lead Director Duties & Responsibilities

Act as a liaison between the Chairman and the non-managementother directors

Be available for consultation and communication with stockholders as appropriate

Call and preside over executive sessions of the non-management directorsBoard without the Chairman or other members of management present

Consult with the Chairman and approve Board meeting agendas and schedules

Consult with the Chairman and approve information provided to the Board

Consult with committee chairs with respect to agendas and information needs relating to committee meetings

Work closely with and act as an advisor to the Chairman; be available to discuss with other directors concerns about the company or the Board and relay those concerns, where appropriate, to the Chairman or other members of the Board; and be familiar with corporate governance best practices

Provide leadership to the Board if circumstances arise in which the role of the Chairman may be, or may be perceived to be, in conflict

Conduct the annual performance evaluation of the Chairman and CEOPat Gallagher in his capacity as Chairman and, together with the Nominating/Governance Committee, evaluate the Board as a whole and review the contributions of each Board member

Perform such other duties and responsibilities as the Board may determine

TheOur non-management and independent directors meet regularly in executive sessions. Executive sessions are held at the beginning and at the end of each regularly scheduled in-person or telephonicvirtual Board meeting. Other executive sessions may be called by the Independent Lead Director at his discretion or at the request of the Board. Executive sessions at the full-Board level are chaired by our Independent Lead Director. The committees of the Board also meet regularly in executive sessions. Executive sessions are chaired by our independent Lead Director.

The Board believes that its leadership structure as described above provides an effective framework for addressing the risks and opportunities facing our company.company, as it effectively allocates authority, responsibility, and oversight between management and the Board. The Board believes the role of the Independent Lead Director underscores our continuing commitment to strong corporate

8

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Corporate Governance

governance and Board independence. The Board believes that the Independent Lead Director’s ability to call meetings of the Board when necessary improves the independence of the Board’s leadership structure and its role in risk oversight.

Director Independence

The Board has conducted its annual review of the independence of each director nominee under NYSE standards and the independence standards set forth in Appendix A of our Governance Guidelines (available on our website located at www.ajg.com/ir, under the heading “Corporate Governance”). Based upon its review, the Board has concluded in its business judgment that, with the exception of Pat Gallagher and D. John Coldman, each of the other director nominees (Sherry S. Barrat, William L. Bax,Deborah Caplan, Teresa H. Clarke, David S. Johnson, Kay W. McCurdy, Christopher C.Chris Miskel, Ralph J. Nicoletti, and Norman L. Rosenthal) and William Bax is independent.

Compensation Committee Interlocks and Insider Participation

During 2021,2023, Sherry S. Barrat, David S. Johnson Kay W. McCurdy and D. John ColdmanChris Miskel served on the Compensation Committee with Sherry S. Barrat serving as Chair. Currently, the Compensation Committee consists of Sherry S. Barrat, David S. Johnson and Kay W. McCurdy. Other than Mr. Coldman, who is no longer serving on the Compensation Committee, noneNone of the members of the Board who served on the Compensation Committee, during 2021including Kay McCurdy who served on the Committee until May 9, 2023, is a former or current officer or employee of the company or any of itsour subsidiaries, is involved in a relationship requiring disclosure as an interlocking executive officer/officer or director or had any relationship requiring disclosure under Item 404 of Regulation S-K. Mr. Coldman resigned

Stockholder Views

Our Board pays close attention to the views of our stockholders, including the 92.5% approval rate received for our “say on pay” proposal in 2023, when making determinations regarding corporate governance and executive compensation.

During the past year, members of our management team and Board engaged with stockholders representing more than 50% of our outstanding shares to discuss various governance, executive compensation and sustainability matters. Based in part on feedback from the Compensation Committee, effective asour stockholders, in 2023 we published an updated sustainability report (see “Impact Report” in Exhibit B) that sets forth our goal of March 2, 2022 because duringNet Zero emissions in our most recent annual governance review, it was determined that Mr. Coldman was no longer independent.direct operations (Scope 1 and Scope 2) by 2050 and a new interim 2030 goal.

6

2022 PROXY STATEMENT

CORPORATE GOVERNANCE

Board’s Role in Risk Oversight

The Board has delegated primary responsibility for risk oversight at Gallagher to the Risk and Compliance Committee. However, the Board retains overall responsibility for risk oversight, and reviews significant risk matters at the full-Board level when appropriate.appropriate, regularly discusses CEO succession planning, including emergency succession plans, and provides oversight of succession planning for certain other senior management positions in consultation with the CEO.

The Risk and Compliance Committee oversees enterprise risk management (ERM) and compliance with laws and regulations. Among other things, the Committee regularly reviews our major risk exposures and management’s activities to mitigate and monitor such exposures,exposures; reviews our business continuity and crisis management framework, including our incident response plans,plans; reviews and discusses with management our risk appetite statements,statements; and reviews our ethics and compliance program, including our Global Standards of Business Conduct and significant legal and regulatory compliance matters, and receives reports and presentations as appropriate from outside advisors, such as the independent auditors, compensation consultant or legal counsel, regarding risks facing us and our risk management and ethics and compliance programs. Our Global Chief Compliance Officer, Global Chief Information Officer, and/or Global Chief Information Security Officer attend each meeting of the Committee and report on significant compliance, data privacy and cybersecurity issues. The company also hasmatters. We have a management-level ERM Committee consisting of a Chair and senior personnel representing functional, business and businessgeographic areas withinacross the company, with broad oversight of ERM. The Chair of the ERM Committee, attendsChief Compliance Officer, Chief Information Officer and Chief Information Security Officer attend each meeting of the Risk and Compliance Committee, as well as regular meetings of the senior executive team dedicated to compliance and reportsrisk, and report on the company’sour most significant risk exposuresexposures. These include significant compliance, data privacy, cybersecurity, sustainability and other ERMartificial intelligence matters. See page 9,10 below for additional information regarding the responsibilities and activities of the Risk and Compliance Committee.

The other committees of the Board oversee the management of risks within their areas of responsibility. The Risk and Compliance Committee coordinates and communicates with these other committees as appropriate. In addition, to facilitate coordination and communication between the committees with respect to risk matters, the Risk and Compliance Committee includes at least one member from each other committee. The Risk and Compliance Committee (and each other committee as appropriate) reports regularly to the Board regarding our major risks and steps undertaken to monitor and mitigate such risks.

For each committee of the Board, the tables below set forth its primary responsibilities, including certain key matters relating to risk oversight, as well as its membership, independence, and number of meetings held in 2021.

2023. See “Environmental, Social and Governance (ESG)“Sustainability Oversight and Activities” beginning on page 1012 for information regarding each committee’s role in overseeing ESGSustainability matters.

2024 PROXY STATEMENT

9

Corporate Governance

Audit Committeeimg134299666_17.jpg 

Met 5 times in 20212023

Committee Members:

•
Ralph J. Nicoletti (Chair)

•
William L. Bax

•
Teresa H. Clarke*

Christopher C. Miskel

Clarke

•
Norman L. Rosenthal

*Appointed to the

Audit Committee on July 28, 2021


The Audit Committee’s responsibilities include general oversight of the integrity of our financial statements; finance activities; our compliance with legal and regulatory requirements; our independent registered public accounting firm’s qualifications and independence; the performance of our internal audit function and independent registered public accounting firm; and, in coordination with the Risk and Compliance Committee, our compliance with legal and regulatory requirements and enterprise risk assessment and management. The Audit Committee manages our relationship with our independent registered public accounting firm and is responsible for the appointment, retention, termination and compensation of the independent auditor.

Internal Audit

The Committee oversees an internal audit department, the head of which reports directly to the Committee (on matters other than day-to-day operations). The internal audit department is independent from management and the Committee defines its responsibilities. Among other things, the purpose of the department is to bring a systematic and disciplined approach to evaluating and improving the effectiveness of our risk management, control and governance processes. The internal audit department evaluates the effectiveness of our risk management processes, performs consulting and advisory services for us related to risk management, and reports significant risk exposures to the Audit Committee or Risk and Compliance Committee, as appropriate.

Independence and Audit Committee Financial Experts

Each member of the Audit Committee meets the additional heightened independence and other requirements of the NYSE listing standards and SEC rules. In addition, the Board has determined that each of Messrs. Bax, Nicoletti and Rosenthal and Ms. Clarke qualifies as an “audit committee financial expert” under SEC rules.

img134299666_16.jpg 

Met 4 times in 2023

Committee Members:

•
Norman Rosenthal (Chair)(1)
•
William Bax
•
Teresa Clarke
•
John Coldman
•
David Johnson

Risk and Compliance Committee

The Risk and Compliance Committee’s responsibilities include reviewing our ERM program, including risk identification, risk appetite, risk assessment and risk mitigation; reviewing management’s approach to identifying and prioritizing our most significant risk exposures and discussing with management the steps that have been taken to mitigate and monitor such exposures; reviewing our management of risks related to cybersecurity and information security, including artificial intelligence risks; receiving regular reports from our Chief Information Officer and/or Chief Information Security Officer regarding the overall status of our cybersecurity and information security programs; reviewing our business continuity and crisis management framework, including incident response plans; receiving regular reports from our Chief Compliance Officer, including with respect to complaints received from internal and external sources, and reviewing our ethics and compliance program, including our Global Standards of Business Conduct and significant legal and regulatory compliance matters.

See "Sustainability Oversight and Activities" below for additional information regarding the Committee's areas of responsibility.

LOGO

2022 PROXY STATEMENT

(1) Norman Rosenthal was appointed Chair effective as of January 24, 2024.

7

CORPORATE GOVERNANCE

10

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Corporate Governance

Compensation
Committeeimg134299666_18.jpg 

Met 5 times in 20212023

Committee Members:

•
Sherry S. Barrat (Chair)

•
David S. Johnson

•
Chris Miskel

Kay W. McCurdy

Compensation Committee

The Compensation Committee’s responsibilities include reviewing and approving compensation arrangements for our CEO and other executive officers, includingofficers; reviewing our CEO; reviewing the company’s strategies and policies related to human capital management; and reviewing our overall compensation structure to avoid incentives that promote excessive risk-taking by executive officers and other employees (see “Compensation Risk Oversight” below). The Compensation Committee engaged a compensation consultant to assist it in carrying out its duties and responsibilities in 2021.2023. The Committee has the sole authority to retain and terminate such compensation consultant and the sole authority to approve such consultant’s fees and other retention terms. For more information regarding the role of the Committee’s compensation consultant in setting compensation, see page 32.30.

Compensation Risk Oversight

The Committee reviews our overall compensation policies and practices to determine whether our program provides incentives for executive officers and other employees to take excessive risks. Based upon an analysis conducted by management and discussions between management and the Committee, the Committee has determined that our compensation policies and practices do not present risks that are likely to have a material adverse effect on us or our business. In reaching this determination, the Committee and management noted the following:

(i)
no single business unit bears a disproportionate share of our overall risk profile;

(ii)
no single business unit is significantly more profitable than the other business units;

(iii)
our compensation practices are substantially consistent across all business units both in the amount and types of compensation awarded;

(iv)
substantially all of our revenue-producing employees are sales professionals whose compensation is tied to the amount of revenue received by the company;

(v)
our annual cash incentive program caps payouts at 200% of target awards; and

(vi)
our performance share units (PSUs) are capped at 200% of target awards and are based on average performance over a three-year measurement period.

In addition, a significant portion of our senior executives’ compensation is deferred and invested in Gallagherour stock through our Deferred Equity Participation Plan and our senior executives own significant amounts of Gallagher stock. Stock options vest on the third, fourth and fifth anniversaries of the grant date and restricted stockperformance share units vest on the fifththird anniversary of the grant date. Based on the above, the Committee believes that our compensation practices help ensure that no single year’s results and no single corporate action has a disproportionate effect on executive officers’senior executives’ annual compensation, and encourage steady and consistent long-term performance by our executive officers.senior executives.

Independence

Each member of the Compensation Committee meets the additional heightened independence and other requirements of the NYSE listing standards.

8

2024 PROXY STATEMENT

11

2022 PROXY STATEMENT

CORPORATE GOVERNANCE

Corporate Governance

Nominating/ Governance Committeeimg134299666_14.jpg 

Met 3 times in 20212023

Committee Members:

Kay W. McCurdy

•
Chris Miskel (Chair)

•
Sherry S. Barrat

Christopher C. Miskel

•
David S. Johnson
•

Nominating/Governance Committee

The Nominating/Governance Committee’s responsibilities include identifying qualified Board and Board committee candidates; engaging in succession planning for the Board and key leadership roles on the Board and its committees; recommending changes to the Board’s size and composition; reviewing and making recommendations to the Board with respect to outside director compensation; recommending director independence standards and governance guidelines; and reviewing legal and regulatory compliance risks relating to corporate governance, including the company’sour political contributions and lobbying activities. The Committee also reviews related person transactions to evaluate whether our directors and executive officers have conflicts of interest that could interfere with their ability to carry out their duties to the company.

Independence

Each member of the Nominating/Governance Committee is independent under NYSE standards.

Risk and Compliance Committee

Met 4 times in 2021

Committee Members:

William L. Bax (Chair)

Kay W. McCurdy

Sherry S. Barrat

David S. Johnson

Norman L. Rosenthal

The Risk and Compliance Committee’s responsibilities include reviewing the company’s enterprise risk management program, including risk identification, risk appetite, risk assessment and risk mitigation; reviewing management’s approach to identify and prioritize the company’s most significant risk exposures and discussing with management the steps that have been taken to mitigate and monitor such exposures; reviewing the company’s management of risks related to cybersecurity and information security; receiving regular reports from the company’s Global Chief Information Officer and/or Global Chief Information Security Officer regarding the overall status of the company’s cybersecurity and information security programs; reviewing the company’s business continuity and crisis management framework, including the company’s incident response plans; and reviewing the company’s ethics and compliance program, including the company’s Global Standards of Business Conduct and significant legal and regulatory compliance matters.

Independence

Each member of the Risk and Compliance Committee is independent under NYSE standards.

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2022 PROXY STATEMENT

9

CORPORATE GOVERNANCE

Environmental, Social and Governance (ESG)Sustainability Oversight and Activities

The Board oversees environmental, social and governance (ESG) matters with assistance from its committees as part of itsmaintains overall oversight of managementsustainability matters. Each Board committee oversees sustainability matters within its scope of responsibility as described below and the company’s overall strategy. See below for information regarding the ESG matters for which each committee has responsibility. Following each committee meeting, the respective committee chair reports on the meeting to the full Board.Board as appropriate. In addition, from time to time, the company has a management-level committee consisting of employees from across our global businesses and corporate departments, with responsibility for coordinating and communicating the company’s ESG initiatives.full Board receives presentations regarding key sustainability topics.

Our Sustainability Report, Climate Disclosure Report and other ESG-related materials as they become available, can be found on our website at investor.ajg.com/esg. We expect to include updated disclosures later in 2022 aligned with the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosure (TCFD). Such reports and other information on our website are not deemed part of this Proxy Statement and are not incorporated by reference.

Audit Committee. The Audit Committee reviews enterprise risk managementERM with the assistance of the Risk and Compliance Committee, including ESGsustainability matters such as climate and cybersecurity risks. The Audit Committee also reviews the company’sour tax planning strategies.

Compensation Committee. The Compensation Committee reviews the company’sour strategies and policies related to human capital management, including diversityinclusion and inclusion,diversity, workplace environment and culture, and talent development and retention. The Compensation Committee receives annual reports on inclusion and diversity and inclusion from the company’s Chief Executive Officerour CEO and Chief Human Resources Officer.

Nominating/Governance Committee. The Nominating/Governance Committee takes a leadership role in shaping the company’soversees our corporate governance principles and practices.practices, and receives regular updates on governance developments from the General Counsel and other members of management. As part of succession planning for the Board and key Board and committee leadership roles, the Nominating/Governance Committee takes into consideration candidates’ judgment, skills, integrity, gender, racial/ethnic diversity, and business or other experience the Board may find valuable in light of the company’s anticipated business needs. In support of its strategy to promote diversity on the Board, the Board adopted a policy that the Nominating/Governance Committee must include qualified women and racially/ethnically diverse candidates in the pool from which new director nominees are chosen. The Nominating/Governance Committee also periodically reviews the company’sour political contributions and lobbying activities. The Nominating/Governance Committee receives regular updates on governance and other ESG practices and developments from the General Counsel and/or other members of management.

Risk and Compliance Committee. The Risk and Compliance Committee reviews and discusses climatea variety of sustainability-related risks and related mitigation strategies identified by the management-level ERM Committee.Committee and senior executive team. These include risks relating to human capital management, cybersecurity, reputation and climate change. On a quarterly basis, the company’s Global Chief Information Officer and/or Globaland Chief Information Security Officer updatesupdate the Risk and Compliance Committee on the company’sour cybersecurity program. As part of this update, they provide the Risk and Compliance Committee with a written report. When appropriate, the full Board also receives updates and reports from the Global Chief Information Officer and/or Global Chief Information Security Officer with respect to these topics. In addition, the Risk and Compliance Committee has responsibility for reviewing the company’sour ethics and compliance program, including the company’s Global Standards of Business Conduct, and receives regular reports from the company’s Global Chief Compliance Officer.

Other Sustainability Activities. The company has a management-level committee consisting of employees from across our global businesses and corporate departments, with responsibility for coordinating and communicating the company’s sustainability initiatives. For example, Gallagher Re’s Climate and ESG Centre of Excellence now offers a carbon portfolio benchmarking tool that helps underwriters identify critical locations within their portfolios for decarbonization strategies.

Our Impact Report, EEO-1 Employer Information Report and other sustainability-related materials can be found on our website at investor.ajg.com/esg. The Impact Report reiterates our previously announced goal of Net Zero by 2050, limited to Scope 1 and Scope 2, and includes a new interim 2030 goal. Our disclosures are aligned with the Global Reporting Initiative (GRI) Standards, the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosure (TCFD) recommendations. Such reports and other information on our website are not deemed part of this Proxy Statement and are not incorporated by reference.

10

12

img134299666_7.jpg 

2022 PROXY STATEMENT

Corporate Governance

CORPORATE GOVERNANCE

Other Board Matters

Attendance. The Board expects each director to attend and participate in all Board and applicable committee meetings and annual meetings of stockholders. Each director is expected to prepare for meetings in advance and to dedicate the time necessary to discharge properly his or hertheir responsibilities at each meeting and to ensure other commitments do not materially interfere with his or hertheir service on the Board. During 2021,2023, the Board met 189 times. All of the nomineescurrent directors attended 75% or more of the aggregate meetings of the Board and the committees on which they served during 2021.2023. In addition, all nine directors then serving on the Board attended the 20212023 Annual Meeting.

Stockholder Communications with the Board. A stockholder or other party interested in communicating with the Board, any of its committees, the Chairman, the Independent Lead Director, the non-management directors as a group or any director individually may do so by writing to theirthe attention of the Corporate Secretary at our principal executive offices, Arthur J. Gallagher & Co., c/o Corporate Secretary, 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. Where

appropriate, our Independent Lead Director is available for consultation and communication with stockholders.

Corporate Governance Materials. We are committed to sound and effective corporate governance. To that end, the Board has adopted Governance Guidelines that set forth principles to assist it in determining director independence and other important corporate governance matters.

The Board has also adopted Global Standards of Business Conduct (the Global Standards) that apply to all directors, executive officers and other employees. The Global Standards, along with our Governance Guidelines and the charters of the Audit, Compensation, Nominating/Governance and Risk and Compliance Committees, are available at www.ajg.com/ir, under the heading “Corporate Governance.” We will provide a copy of the Global Standards or Governance Guidelines without charge to any person who requests a copy by writing to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. We intend to satisfy the disclosure requirements of Item 5.05 of Form 8-K regarding any amendment to, or waiver from, the Global Standards with respect to any of our directors or executive officers by posting such information on our website.

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2024 PROXY STATEMENT

2022 PROXY STATEMENT

11

13

CORPORATE GOVERNANCE

Corporate Governance

Director Compensation

The Board sets the amount and form of non-management director compensation based upon recommendations made by the Nominating/Governance Committee. In 2021,2023, the Nominating/Governance Committee engaged Pearl Meyer & Partners, LLC (Pearl Meyer) to assess the competitiveness of our director pay program against the same peer group that is used to assess the competitiveness of our executive compensation program and an industry survey. Pearl Meyer found that pay levels for our Board were slightly belowbetween the median50th and 75th percentile of the identified benchmarks. As a result,Taking these benchmark results into consideration, in 2021, the annual cash retainer was increased from $105,000 to $110,000 and2023, the target value of the annual equity grant was increased from $150,000$180,000 to $160,000.$190,000 and the annual cash retainer was increased from $120,000 to $125,000.

On May 11, 2021,9, 2023, each non-management director (other than Ms. Clarke) was granted 1,150920 restricted stock units (RSUs) that vest on the first anniversary of the date of grant (or immediately upon a director’s departure from the Board). Ms. Clarke, who joined the Board on July 28, 2021, was granted 905 restricted stock units on August 2, 2021, subject to the same vesting conditions. Committee Chairs receive additional annual fees as follows: $25,000$30,000 for the Audit Committee, $20,000$25,000 for each of the Compensation Committee and Risk and Compliance Committee, and $15,000$20,000 for the Nominating/Governance Committee. The Independent Lead Director receives an additional annual fee of $30,000.$35,000. Directors are reimbursed for travel and accommodation expenses incurred in connection with attending Board and committee meetings.

Under our stock ownership guidelines, directors with at least five years of service are expected to own an amount of our common stock with a value equal to five times the cash portion of the annual director retainer. All of our directors with five or more years of service meet these guidelines.

NonemployeeNon-management directors may elect to defer all or a portion of their annual cash retainer or restricted stock unitsRSUs under our Deferral Plan for Nonemployee Directors. Deferred cash retainers and restricted stock unitsRSUs are converted to notional stock units, which are credited to individuals’ accounts along with dividend equivalents when dividends are paid on our common stock. Deferred amounts credited to director’s individual accounts are distributed in the form of common stock at a date specified by each director or upon such director’s departure from the Board.

 

Name

 

 

    Fees Earned    

    or Paid in Cash    

    ($)(2)    

 

 

    Stock Awards    

    ($)(3)    

 

 

    All Other    

    Compensation    

 

 

        Total        

        ($)        

 

    

 

Sherry S. Barrat

 

  

 

 

 

 

128,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    299,479    

 

 

 

    

 

William L. Bax

 

  

 

 

 

 

128,750

 

 

 

  

 

 

 

 

170,729

 

 

 

   

 

—

 

 

  

 

 

 

 

    299,479    

 

 

 

    

 

Teresa H. Clarke(1)

 

  

 

 

 

 

55,000

 

 

 

  

 

 

 

 

125,958

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    180,958    

 

 

 

    

 

D. John Coldman

 

  

 

 

 

 

108,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

80,936

 

 

(4) 

 

  

 

 

 

 

    360,415    

 

 

 

    

 

David S. Johnson

 

  

 

 

 

 

138,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    309,479    

 

 

 

    

 

Kay W. McCurdy

 

  

 

 

 

 

123,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    294,479    

 

 

 

    

 

Christopher C. Miskel

 

  

 

 

 

 

108,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    279,479    

 

 

 

    

 

Ralph J. Nicoletti

 

  

 

 

 

 

133,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    304,479    

 

 

 

    

 

Norman L. Rosenthal

 

  

 

 

 

 

108,750

 

 

 

  

 

 

 

 

170,729

 

 

 

  

 

 

 

 

—

 

 

 

  

 

 

 

 

    279,479    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

 

Fees Earned or Paid in Cash
($)(2)

 

 

Stock Awards
($)(3)

 

 

Total
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sherry Barrat

 

 

 

148,750

 

 

 

 

 

198,794

 

 

 

 

 

347,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William Bax

 

 

 

148,750

 

 

 

 

 

198,794

 

 

 

 

 

347,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Teresa Clarke

 

 

 

123,750

 

 

 

 

 

198,794

 

 

 

 

 

322,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Coldman

 

 

 

123,750

 

 

 

 

 

198,794

 

 

 

 

 

322,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David Johnson

 

 

 

158,750

 

 

 

 

 

198,794

 

 

 

 

 

357,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kay McCurdy(1)

 

 

 

35,000

 

 

 

 

 

—

 

 

 

 

 

35,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chris Miskel

 

 

 

138,750

 

 

 

 

 

198,794

 

 

 

 

 

337,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ralph Nicoletti

 

 

 

153,750

 

 

 

 

 

198,794

 

 

 

 

 

352,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Norman Rosenthal

 

 

 

123,750

 

 

 

 

 

198,794

 

 

 

 

 

322,544

 

 

(1)
Ms. McCurdy did not stand for re-election at our 2023 Annual Meeting.
(2)
Mr. Miskel has elected to defer cash retainer payments pursuant to the Deferral Plan for Nonemployee Directors.
(3)
This column represents the full grant date fair value of RSUs granted in 2023 in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, except that in accordance with SEC rules, any estimate for forfeitures is excluded from, and does not reduce, such amounts. For additional information on the valuation assumptions with respect to awards of RSUs, refer to Note 12 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2023. Each director had 920 unvested RSUs outstanding as of December 31, 2023. Messrs, Miskel and Nicoletti and Ms. Clarke have elected to defer RSU awards pursuant to the Deferral Plan for Nonemployee Directors.

(1)

14

Ms. Clarke joined the Board of Directors on July 28, 2021.img134299666_7.jpg 

(2)

Mr. Miskel has elected to defer cash retainer payments pursuant to the Deferral Plan for Nonemployee Directors.

Corporate Governance

(3)

This column represents the full grant date fair value of restricted stock units granted in 2021 in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, except that in accordance with SEC rules, any estimate for forfeitures is excluded from, and does not reduce, such amounts. For additional information on the valuation assumptions with respect to awards of restricted stock units, refer to Note 12 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2021. Each director had 1,150 unvested restricted stock units outstanding as of December 31, 2021, other than Ms. Clarke, who had 905 unvested restricted stock units outstanding. Messrs, Bax, Miskel, Nicoletti and Rosenthal and Ms. Clarke have elected to defer restricted stock unit awards pursuant to the Deferral Plan for Nonemployee Directors.

(4)

For advisory services provided to our U.K. subsidiary in connection with Gallagher Re, our reinsurance brokerage operation, which includes the treaty reinsurance brokerage operation acquired from Willis Towers Watson in December 2021.

12

2022 PROXY STATEMENT

CORPORATE GOVERNANCE

Certain Relationships and Related Person Transactions

How We Review and Approve Related Person Transactions

The Company maintains a written Related Person Transactions Policy. We review all relationships and transactions exceeding $120,000 in which the company participates and in which any related person (our directors and executive officers or their immediate family members and any persons owning 5% or more of our common stock) had or will have a direct or indirect material interest.interest, subject to certain exceptions. These include certain transactions that do not require disclosure under Item 404 of Regulation S-K, such as compensation of our executive officers and directors, among others, and which are deemed pre-approved under our Related Person Transactions Policy. The company’s legal staff is primarily responsible for reviewing such relationships and transactions based on the facts and circumstances, and for developing and implementing processes and controls for obtaining and evaluating information about related person transactions. As required by SEC rules, we disclose in this Proxy Statement all such transactions that are determined to be directly or indirectly material to a related person.person and that are required to be disclosed under Item 404 of Regulation S-K. In addition, the Nominating/Governance Committee reviews and approves or disapproves any such related person transaction. In the course of reviewing and determining whether or not to approve a disclosable related person transaction, the Committee considers the following factors:

•

Nature of the related person’s interest in the transaction

•

Material transaction terms, including the amount involved

•

Whether the transaction is on terms no less favorable than could have been reached with an unrelated third party

•

For employment arrangements that require disclosure under Item 404 of Regulation S-K, whether compensation is commensurate with that of other employees with equivalent qualifications and responsibilities and holding similar positions

•

Importance and potential benefits of the transaction to the related person and to the company

•

Whether the transaction would impair a director or executive officer’s judgment to act in the company’s best interest

•

Whether the transaction was undertaken in the ordinary course of business

•

Any other matters the Committee deems appropriate, including the conflicts of interest and corporate opportunity provisions of our Global Standards of Business Conduct.

Related Person Transactions for 20212023

Tom Gallagher, our President and one of our named executive officers, is the brother of our CEO. His compensation was approved by the Compensation Committee and is disclosed in the 2023 Summary Compensation Table below. In 2021,2023, the following relatives of PatTom Gallagher were employed with us: (i) Michael Gallagher, his son, is a producer within our brokerage segment, and received total compensation of $868,927, and (ii) Kevin Gallagher, his son, is a strategic planning leader within our brokerage segment, and received total compensation of $454,599.

Patrick M. Gallagher, our Chief Operating Officer, is the son of our CEO. In 2023, he received total compensation of $3,352,594, which was reviewed and approved by the Compensation Committee.

In 2023, the following additional relatives of Pat Gallagher, our CEO, were employed with us: (i) Jennifer Gallagher, his sister, is head of a specialty sales unit within our brokerage segment, and received total compensation of $890,000;$1,105,105; (ii) one ofShannon Gallagher, his sons leads our brokerage operations for the Americas,daughter, is a marketing partnership development manager, and received total compensation of $1,990,215;$400,000; (iii) anotherSean Gallagher, his son, is a regional manager within our brokerage segment, and received total compensation of $1,006,120;$1,363,435; and (iv) a thirdBrendan Gallagher, his son, is a branch manager within our brokerage segment, and received total compensation of $864,836. A$1,046,697.

Jonathan Hudson, the son of Tom GallagherScott Hudson, one of our named executive officers, is a producer withinin our brokerage segment, and received total compensation of $494,352. In addition,$279,642 for 2023. Norah Johnson, daughter of David Johnson, one of our directors, is an account manager in our brokerage segment, and received total compensation of $124,175 for 2023. Tish Cavaness, the wife of Joel Cavaness, one of our executive officers, is a client service leader within our brokerage segment, and received total compensation of $456,035. $418,000 for 2023.

The total compensation (salary, bonus, and the grant value of equity and cash awards) of each related person described above was commensurate with that of other employees with equivalent qualifications and responsibilities and holding similar positions.

Tom Gallagher, one of our named executive officers, is a brother of our CEO. His compensation is disclosed in the 2021 Summary Compensation Table below.

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2024 PROXY STATEMENT

2022 PROXY STATEMENT

13

15

CORPORATE GOVERNANCE

Corporate Governance

Security Ownership by Certain Beneficial Owners and Management

The table below presents information concerning beneficial ownership of our common stock by: (i) each person we know to be the beneficial owner of more than 5% of our outstanding shares of common stock (as of December 31, 2021)2023); (ii) each of our named executive officers, directors and director nominees (as of March 16, 2022)18, 2024); and (iii) all of our executive officers and directors as a group (as of March 16, 2022)18, 2024). The percentage calculations in this table are based on a total of 209,614,153218,302,819 shares of our common stock outstanding as of the close of business on March 16, 2022.18, 2024. Unless otherwise indicated below, to our knowledge, the individuals and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned by them, subject to community property laws where applicable. In addition, unless otherwise indicated,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock Issuable Within 60
Days of March 18, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Shares of
Common
Stock(1)

 

Stock Options

 

Restricted Stock
Units (2)

 

Total Beneficial
Ownership

 

Percent of
Common Stock
Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5% Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Vanguard Group (3)
100 Vanguard Blvd.
Malvern, PA 19355

 

 

 

25,553,064

 

 

 

 

 

N/A

 

 

 

 

N/A

 

 

 

 

 

25,553,064

 

 

 

 

 

11.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock, Inc. (4)
50 Hudson Yards
New York, NY 10001

 

 

 

17,415,095

 

 

 

 

 

N/A

 

 

 

 

N/A

 

 

 

 

 

17,415,095

 

 

 

 

 

8.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Named executive officers, directors and nominees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

 

 

 

1,060,488

 

(5)

 

 

 

 

156,810

 

 

 

 

 

—

 

 

 

 

 

1,217,298

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug Howell

 

 

 

310,435

 

(6)

 

 

 

 

50,843

 

 

 

 

 

—

 

 

 

 

 

361,278

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom Gallagher

 

 

 

620,214

 

(7)

 

 

 

 

89,860

 

 

 

 

 

—

 

 

 

 

 

710,074

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott Hudson

 

 

 

105,019

 

(8)

 

 

 

 

99,323

 

 

 

 

 

—

 

 

 

 

 

204,342

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt Bay

 

 

 

62,310

 

(9)

 

 

 

 

52,571

 

 

 

 

 

—

 

 

 

 

 

114,881

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sherry Barrat

 

 

 

19,838

 

 

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

20,758

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William Bax

 

 

 

46,984

 

 

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

47,904

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Teresa Clarke

 

 

 

1,960

 

 

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

2,880

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John Coldman

 

 

 

12,774

 

 

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

13,694

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David Johnson

 

 

 

45,038

 

 

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

45,958

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chris Miskel

 

 

 

5,641

 

(10)

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

6,561

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ralph Nicoletti

 

 

 

14,549

 

 

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

15,469

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Norman Rosenthal

 

 

 

39,057

 

(11)

 

 

 

 

—

 

 

 

 

 

920

 

 

 

 

 

39,977

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All directors and executive officers as a group (20 people)

 

 

 

2,859,751

 

 

 

 

 

 

643,226

 

 

 

 

 

7,360

 

 

 

 

 

3,510,337

 

 

 

 

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Less than 1%

(1)
Includes “notional stock units” held under our SS&T Plan (see page 34) for executive officers. Under this plan, some of our executive officers have deferred equity awards upon vesting or elected to invest other deferred amounts into a Gallagher common stock fund. These deferred notional stock units are included because the address for all persons named below is c/o Arthur J.plan permits participants to elect to move in and out of the Gallagher & Co., 2850 Golf Road, Rolling Meadows, Illinois 60008-4050.

      

Common Stock Issuable Within 60

Days of March 16, 2022

       
     

Name

 

Shares of

Common

Stock(1)

  Stock Options  

Restricted Stock

Units (2)

  

Total Beneficial

Ownership

  

Percent of

Common Stock

Outstanding

 

5% Stockholders

 

     

The Vanguard Group (3)

100 Vanguard Blvd.

Malvern, PA 19355

  24,314,580   N/A            N/A            24,314,580   11.6%          
     

BlackRock, Inc. (4)

55 East 52nd Street

New York, NY 10055

  16,267,719   N/A            N/A            16,267,719   7.8%          

Named executive officers, directors and nominees

 

     

Pat Gallagher

  993,899(5)   163,485   —   1,157,384   *           
     

Doug Howell

  291,833(6)   61,135   —   352,968   *           
     

Tom Gallagher

  580,323(7)   91,968   —   672,291   *           
     

Scott Hudson

  44,764(8)   83,768   —   128,532   *           
     

Walt Bay

  47,168(9)   48,485   —   95,653   *           
     

Sherry S. Barrat

  20,968   —   1,150   22,118   *           
     

William L. Bax

  44,280   —   1,150   45,430   *           
     

Teresa H. Clarke

  —   —   905   905   *           
     

D. John Coldman

  10,594   —   1,150   11,744   *           
     

David S. Johnson

  47,358   —   1,150   48,508   *           
     

Kay W. McCurdy

  31,408   —   1,150   32,558   *           
     

Christopher C. Miskel

  2,036(10)   —   1,150   3,186   *           
     

Ralph J. Nicoletti

  12,027   —   1,150   13,177   *           
     

Norman L. Rosenthal

  35,835(11)   —   1,150   36,985   *           

All directors and executive officers as a group (19 people)

  2,391,184   631,098   10,105   3,032,387   1.4%          

*

Less than 1%

(1)

Includes “notional stock units” held under our Supplemental Plan (see page 36) for executive officers. Under this plan, some of our executive officers have deferred equity awards upon vesting or elected to invest other deferred amounts into a Gallagher common stock fund. These deferred notional stock units are included because the plan permits participants to elect to move in and out of the Gallagher common stock fund and, as a result, participants have investment power with respect to the underlying shares.

14

2022 PROXY STATEMENT

CORPORATE GOVERNANCE

(2)

All non-management director unvested restricted stock units vest immediately upon a director’s departure from the Board, and are included because a director could depart the Board at his or her discretion and acquire rights to the underlying stock within 60 days.

(3)

Share total obtained from a Schedule 13G/A filed on February 9, 2022 by The Vanguard Group. Vanguard disclosed that it had sole voting power with respect to zero of these shares, shared voting power with respect to 326,133 shares, sole investment power with respect to 23,480,744 shares, and shared investment power with respect to 833,836 shares.

(4)

Share total obtained from a Schedule 13G/A filed on February 1, 2022 by BlackRock, Inc. BlackRock disclosed that it had sole voting power with respect to 14,413,836(2)

All non-management director unvested RSUs vest immediately upon a director’s departure from the Board, and are included because a director could depart the Board at his or her discretion and acquire rights to the underlying stock within 60 days.
(3)
Share total obtained from a Schedule 13G/A filed on February 13, 2024 by The Vanguard Group. Vanguard disclosed that it had sole voting power with respect to zero of these shares, shared voting power with respect to 273,811 shares, sole investment power with respect to 24,644,664 shares, and shared investment power with respect to 908,400 shares.
(4)
Share total obtained from a Schedule 13G/A filed on January 25, 2024 by BlackRock, Inc. BlackRock disclosed that it had sole voting power with respect to 16,043,811 of these shares and sole investment power with respect to the full number of shares disclosed.

(5)

Includes 56,303 notional stock units (see footnote (1) above); 219,186 shares held in trust for the benefit of his children by his wife, Anne M. Gallagher, and another, as trustees, and over which he has shared voting and shared investment power; 243,340 shares held in a revocable trust of which his wife is the sole trustee and over which he has no voting or investment power and therefore disclaims beneficial ownership; 255,965 shares held by Elm Court LLC, a limited liability company of which the voting LLC member- ship interests are owned by Pat Gallagher and the non-voting LLC membership interests are owned by a grantor retained annuity trust of which Pat Gallagher is the trustee; 66,703 shares held in an irrevocable trust of which he is the sole trustee; 23,448 shares held in trust for the benefit of his children of which he is the sole trustee; and 214 shares held in his 401(k) account.

(6)

Includes 218,812 notional stock units (see footnote (1) above); 3,165 shares held by his wife, over which he has no voting or investment power and therefore disclaims beneficial ownership; and 214 shares held in his 401(k) account.

(7)

Includes 10,761 notional stock units (see footnote (1) above); 62,295 shares held in a grantor retained annuity trust of which he is the sole beneficiary; 117,360 shares held in trusts for the benefit of his children, of which his wife is the sole trustee, and over which he has no voting or investment power and disclaims beneficial ownership; 32,428 shares held by his wife, over which he has no voting or investment power; 66,709 shares held in an irrevocable trust of which he is the sole trustee; and 214 shares held in his 401(k) account.

(8)

Includes 2,319 notional stock units (see footnote (1) above) and 214 shares held in his 401(k) account.

(9)

Includes 8,737 notional stock units (see footnote (1) above) and 214 shares held in his 401(k) account.

(10)

Includes 176 notional stock units held under our Deferral Plan for Nonemployee Directors (see page 12).

(11)

Includes 2,500 shares held in a joint brokerage account with Caryl G. Rosenthal and 2,000 shares held in a joint brokerage account with Marisa F. Rosenthal. These are both margin securities accounts with no loans outstanding. Dr. Rosenthal has shared voting and investment power with respect to these shares.

LOGO

2022 PROXY STATEMENT

15

CORPORATE GOVERNANCE

Item 2 – Approval of the Arthur J. Gallagher & Co. 2022 Long-Term Incentive Plan, Including Approval of 13,500,000 Shares Authorized for Issuance Thereunder

The Board has approved, and is asking our stockholders to approve, the 2022 Long-Term Incentive Plan (2022 LTIP). The 2022 LTIP provides for the grant of incentive awards to directors, officers and other employees of the company. If approved, the 2022 LTIP will replace the 2017 Long-Term Incentive Plan (2017 LTIP) and no new awards will be made under the 2017 LTIP. The maximum number of shares that may be awarded underdisclosed.

(5)
Includes 59,308 notional stock units (see footnote (1) above); 219,175 shares held in trust for the 2022 LTIPbenefit of his children by his wife, Anne Gallagher, and another, as trustees, and over which he has shared voting and shared investment power; 271,525 shares held in a revocable trust of which his wife is 13,500,000the sole trustee and over which he has no voting or investment power and therefore disclaims beneficial ownership; 255,965 shares plus anyheld by Elm Court LLC, a limited liability company of which the voting LLC membership interests are owned by Pat Gallagher and the non-voting LLC membership interests are owned by a grantor retained annuity trust of which Pat Gallagher is the trustee; 66,703 shares subject to outstanding awards underheld in an irrevocable trust of which he is the 2017 LTIPsole trustee; 23,448 shares held in trust for the benefit of his children of which he is the sole trustee; and 2014 Long-Term Incentive Plan (2014 LTIP,368 shares held in his 401(k) account.
(6)
Includes 212,672 notional stock units (see footnote (1) above); 3,165 shares held by his wife, over which he has no voting or investment power and together with the 2017 LTIP, the Prior LTIPs) that are outstanding as of the effective date of the 2022 LTIPtherefore disclaims beneficial ownership; and are subsequently settled for cash, forfeited, expired, or for any reason are cancelled or terminated, without resulting368 shares held in the issuance of shares. A maximum of 3,500,000 shares issued for full value awards (i.e., awards other than stock options or stock appreciation rights (SARs)) will be counted one-for-one against the 13,500,000 share pool; every share subject to a full value award in excess of such limit will count as 3.8 shares against the share pool.

his 401(k) account.

Broad-Based Employee Participation

The Board believes that long-term equity compensation is important to attract, retain and motivate a talented executive team. The Board also believes that broad-based equity participation is a necessary and powerful employee incentive and retention tool that benefits all of our stockholders. From 2017 to 2022, employee participation in our equity compensation plan grew from 3.4% to 5.1% even as our employee population grew by more than 50%. If the 2022 LTIP is approved, our intention is to continue to increase the number of equity plan participants over time consistent with the growth of our business. We believe it is important to continue to align the interests of both our executive team and our key employees with those of our stockholders. Our Board believes that approval of the 2022 LTIP is important to our long-term growth and is in the best interest of our stockholders.

Key Equity Metrics

Approval of the 2022 LTIP will enable us to compete effectively for executive and key employee talent in the coming years, while maintaining reasonable burn rates and overhang. The following table shows key equity metrics over the prior three years:

Fiscal Year

 

Stock    

Options    

Granted    

 RSUs
Granted		 PSUs
Granted		 

    Actual PSUs    

Earned

 

Total    

Granted(1)    

 

Weighted    

Average    

Number of    

Shares    

 

Unadjusted    

Burn    

Rate(2)    

 

       

 

2021

 

 

 

1,640,490    

 

 

 

327,352    

 

 

 

66,930    

 

 

 

147,250    

 

 

 

2,115,092    

 

 

 

202,680,557    

 

 

 

1.0

 

       

 

2020

 

 

 

1,590,740    

 

 

 

423,121    

 

 

 

82,470    

 

 

 

156,400    

 

 

 

2,170,261    

 

 

 

190,995,110    

 

 

 

1.1

 

       

 

2019

 

 

 

1,283,300    

 

 

 

414,934    

 

 

 

73,625    

 

 

 

148,350    

 

 

 

1,846,584    

 

 

 

185,993,839    

 

 

 

1.0

 

(1)

16

Total number of shares granted in a particular fiscal year includes all stock options, RSUs and PSUs for which the performance criteria was approved as attained and earned during such fiscal year.img134299666_7.jpg 

(2)

PSUs granted in the applicable fiscal year and not yet earned are excluded from the calculation of burn rate.

Corporate Governance

As

(7)
Includes 10,876 notional stock units (see footnote (1) above); 62,295 shares held in a grantor retained annuity trust of March 16, 2022,which he is the record datesole beneficiary; 118,440 shares held in trusts for the benefit of his children, of which his wife is the Annual Meeting,sole trustee, and over which he has no voting or investment power and disclaims beneficial ownership; 32,428 shares held by his wife, over which he has no voting or investment power; 66,709 shares held in an irrevocable trust of which he is the sole trustee; and 368 shares held in his 401(k) account.
(8)
Includes 3,269 notional stock units (see footnote (1) above) and 288 shares held in his 401(k) account.
(9)
Includes 9,676 notional stock units (see footnote (1) above) and 368 shares held in his 401(k) account.
(10)
Includes 1,470 notional stock units held under our projectedDeferral Plan for Nonemployee Directors (see page 14).
(11)
Includes 2,500 shares held in a joint brokerage account with Caryl Rosenthal and 2,000 shares held in a joint brokerage account with Marisa Rosenthal. Dr. Rosenthal has shared voting power dilution will be approximately 6.5% if the 2022 LTIP is approved. This calculation does not include the 6,666,835 shares remaining under the 2017 LTIP as of March 16, 2022, as they will be canceled upon approval of the 2022 LTIP. The calculation reflects the following updated share information:

11,817,972 shares that may be issued under equity compensation plans approved by stockholders (9,330,244 shares in connection with outstanding stock options with a weighted-average exercise price of $102.27 and a weighted-average remaining term of 4.7 years; 353,230 shares in connection with earned PSUs; and 2,134,498 shares in connection with unvested RSUs); and

12,212 shares that may be issued under equity compensation plans not approved by stockholders (in connection with unvested RSUs under the Restricted Stock Plan). See “Equity Compensation Plan Information” for more information regarding the Restricted Stock Plan.

16

2022 PROXY STATEMENT

CORPORATE GOVERNANCE

Selected Features of the 2022 LTIP

The 2022 LTIP continues our approach of aligning our equity compensation program with the interests of our stockholders and with evolving best practices in equity and incentive compensation. The 2022 LTIP includes the following “best practice” features continued from the 2017 LTIP:

•Minimum Vesting: the 2022 LTIP includes minimum vesting periods for awards (one year for options, one year for SARs, one year for full value awards to non-management directors and three years for full value awards to other participants), subject to certain exceptions discussed in further detail below.

•Annual Limit on Director Compensation: the 2022 LTIP imposes a $500,000 annual limit on equity awards and cash compensation under the 2022 LTIP and otherwise to each non-management director; provided, however, that in the calendar year in which a non-management director first joins the Board or is first designated as Chairman of the Board or Lead Director, the maximum aggregate dollar value of equity-based and cash compensation granted to the participant may be up to 200% of the foregoing limit.

•No Liberal Share Recycling: the 2022 LTIP does not permit liberal share recycling, including with respect to shares withheld by the company to pay withholding taxes related to awards.

•No Single-Trigger Change in Control Vesting: the 2022 LTIP does not provide for automatic single-trigger change in control award vesting and provides instead for Compensation Committee discretion to determine award treatment in connection with a change in control.

•Prohibits Dividends or Dividend Equivalents on Unvested Awards: the 2022 LTIP includes an express prohibition on the payment of dividends or dividend equivalents on unvested awards.

•No Increase in Shares Without Stockholder Approval: the 2022 LTIP prohibits any amendment that would increase the number of shares available under the plan without stockholder approval.

•No “Liberal” Change in Control: the definition of change in control included in the 2022 LTIP requires an actual change in control to occur and is not triggered by commencement of a tender offer, stockholder approval of an acquisition transaction or similar events.

•No Repricings: the 2022 LTIP prohibits “repricing” stock options and SARs and cashing out underwater stock options or SARs without stockholder approval.

•Clawback: all awards granted under the 2022 LTIP are subject to recoupment or “clawback,” to the extent required by law, regulation or any company policy (including our existing compensation recovery policy).

The Share Reserve under the 2022 LTIP

As part of the Compensation Committee’s recommendation to the Board to approve the 2022 LTIP, including the total number of shares available for issuance under the 2022 LTIP, the Committee solicited advice from Pearl Meyer, its independent

compensation consultant, and other internal and external experts to analyze historical share usage (generally referred to as “burn rate”), expected future needs for equity awards within the organization, as well as the dilutive impact of various increases in the total shares available under the plan and the estimated duration of the 2022 LTIP under various scenarios. The Committee also took into account the views of several of our largest stockholdersinvestment power with respect to these shares.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who own more than 10% of the Company’s common stock, to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of the Company’s common stock. The Company assists its directors and executive officers by monitoring transactions and completing and filing Section 16 reports on their behalf. To our knowledge, based solely on a review of the filed reports and written representations that no other reports are required, we believe that each of the Company’s directors and executive officers complied with all such issues, which management solicitedfiling requirements in a timely manner during an outreach conducted in 2021 and early 2022. Specifically, the Compensation Committee considered:

•Historical Burn Rate: Our equity plan share usage during 2019, 2020 and 2021 represents an average three-year burn rate, factored for a full-value share premium, of 1.6%. This burn rate is below the Institutional Shareholder Services Inc. established burn rate benchmark for our industry and index of 2.2%.

•Dilution: Also referred to as “voting power dilution,” dilution is commonly measured by “overhang,” which generally refers to the amount of potential dilution to current stockholders that could result from the future issuance of the shares reserved for issuance under an equity compensation plan. Overhang is typically expressed as a percentage (equal to a fraction where the numerator is the sum of the number of shares reserved but not issued under equity compensation plans plus the number of shares subject to outstanding awards and the denominator is the sum of the numerator plus the total number of shares outstanding). If the 2022 LTIP is approved, our voting power dilution will be approximately 6.5% as of March 16, 2022.

•Stockholder Outreach: During 2021 and early 2022, management conducted an outreach initiative with our largest stockholders, soliciting their views on various executive compensation and governance issues, including their views on acceptable levels of dilution, shareholder value transfer, burn rate and other issues relevant to the share authorization request under our 2022 LTIP. The Committee took the views of our largest stockholders into account when determining features of our plan and the level of our share authorization request.

•Estimated Duration of the 2022 LTIP: If the 2022 LTIP is approved by our stockholders, based on historical and expected future usage, we estimate that the shares we are requesting under the 2022 LTIP would be sufficient for approximately four to six years of grants, understanding that the share reserve could last for a longer or shorter period of time, depending on the growth of our employee population, our future grant practices, or our stock price and prevailing market conditions, which cannot be predicted at this time.

The Full Value Award Limit Under the 2022 LTIP

The 2022 LTIP also imposes limits on the number of shares that may be awarded in the form of full value awards. Under the 2022 LTIP, if full value awards are granted2023, other than with respect to more than 3,500,000 shares, every share subjecta Form 4 filed on behalf of Pat Gallagher to a full value award in excessreport an exercise of this limit will count as 3.8 shares against the share pool under the 2022 LTIP (the first 3,500,000 shares will count one-to-one against the share pool). We are requesting that stockholders approve this number of full value shares because we would likestock options on February 6, 2023, which, due to continue to provide full value share awards to key employees to encourage ongoing retention and to focus their efforts on long-term stockholder value creation.an administrative error, was reported one day late.

LOGO

2024 PROXY STATEMENT

2022 PROXY STATEMENT

17

CORPORATE GOVERNANCE

Summary of the Material Terms of the 2022 LTIP

The following is a brief summary of the 2022 LTIP. This summary is qualified in its entirety by reference to the plan document, a copy of which is attached to this Proxy Statement as Exhibit A and incorporated herein by reference.

Plan Term and Eligibility. The 2022 LTIP term begins upon the date of stockholder approval and terminates on the date of the annual meeting of stockholders that occurs during the year of the tenth anniversary of its effective date, unless terminated earlier by the Board. All of the officers, employees and non-management directors of the company and its subsidiaries are eligible to be selected to receive awards under the 2022 LTIP. As of December 31, 2021, approximately 46 officers, 39,531 employees and nine non-management directors were eligible for consideration to participate in the 2022 LTIP.

Shares Authorized. 13,500,000 shares of our common stock are available under the 2022 LTIP, plus any shares subject to outstanding awards under the Prior LTIPs as of the date of the Annual Meeting that after such date are settled for cash, forfeited, expired, or for any reason are cancelled or terminated, without resulting in the issuance of shares. In the event that more than 3,500,000 shares are used for full value awards, each share subject to a full value award in excess of 3,500,000 shares will count against the shares authorized as 3.8 shares (the first 3,500,000 shares subject to full value awards will count at a rate of one-to-one and all shares subject to awards other than full value awards will count at a rate of one-to-one).

Share Counting. If an outstanding award granted under the 2022 LTIP is cancelled or forfeited, expires, terminates or is settled in cash, the shares underlying such award will again be available under the 2022 LTIP (and will not count against the limit on full value awards). Shares that are not issued upon the net settlement of a stock-settled SAR under the 2022 LTIP or Prior LTIPs, shares that are delivered to or withheld by the company to pay the exercise price of a stock option under the 2022 LTIP or Prior LTIPs, shares delivered to or withheld by the company to pay withholding taxes related to awards under the 2022 LTIP or Prior LTIPs and shares that are purchased on the open market with the proceeds of a stock option exercise under the 2022 LTIP or Prior LTIPs will not again be available under the 2022 LTIP.

Administration. The Compensation Committee, which is made up entirely of independent directors, will administer the 2022 LTIP, and may delegate some or all of its authority to our President and CEO or another executive officer as it deems appropriate, except to the extent such delegation is prohibited by applicable law.

Award Types. The 2022 LTIP provides for: (1) nonqualified and incentive stock options (NQSOs and ISOs, respectively); (2) SARs; (3) restricted stock awards (RSAs); and (4) restricted stock units (RSUs).

Non-Management Director Limit. The aggregate dollar value of all equity awards (determined based upon the grant date fair value of such awards) and cash compensation granted under the 2022 LTIP or otherwise during any calendar year to a single non-management director may not exceed $500,000; provided, however, that in the calendar year in which a non-management director first joins the Board or is first designated as Chairman of the Board or Lead Director, the maximum aggregate dollar value of equity-based and cash compensation granted to the participant may be up to two hundred percent (200%) of the foregoing limit and the foregoing limit will not count any tandem SARs.

Stock Options and SARs. Except for substitute awards, the exercise price of a stock option and the base price of a SAR may not be less than 100% of the fair market value of our common stock on the date of grant. A SAR typically will provide for payment of an amount (in cash or shares of common stock) based upon the increase in the price of our common stock over the base price per share. The exercise price and the required withholding taxes of a stock option may be paid in cash, in shares of our common stock, through a net-exercise or a broker-assisted cashless exercise. Stock options and SARs must expire no later than seven years from the date of grant. The Compensation Committee may provide that an option or SAR with an exercise or base price, as applicable, less than the fair market value per share of common stock shall automatically be exercised immediately prior to expiration. Options and SARs granted under the 2022 LTIP may not become exercisable, vest or be settled, in whole or in part, prior to the one-year anniversary of the date of grant, except that the Compensation Committee may provide that options or SARs become exercisable, vest or settle prior to such date in the event of the participant’s death or disability or in the event of a change in control. Further, up to 5% of the aggregate number of shares of common stock authorized for issuance under the 2022 LTIP may be issued pursuant to awards subject to any, or no, vesting conditions, as the Compensation Committee determines appropriate. Subject to adjustment for changes in capitalization, without the prior approval of the stockholders of the company, the Compensation Committee will not amend or replace any previously granted option or SAR in a transaction that constitutes a “repricing,” including, but not limited to: (i) the reduction, directly or indirectly, in the per-share price of an outstanding option or SAR by amendment, cancellation or substitution; (ii) any action that is treated as a repricing under generally accepted accounting practices; (iii) at any time when the per-share price of an outstanding option or SAR is above the fair market value of a share of common stock, canceling (or accepting the surrender of) an option or SAR in exchange for another option, SAR or other equity security or cash (unless the cancellation and exchange occurs in connection with a merger, acquisition, or similar transaction); and (iv) any other action that is treated as a repricing by the rules or regulations of the New York Stock Exchange.

Stock Awards. The 2022 LTIP provides for the grant of stock awards, consisting of RSAs and RSUs, which will be subject to the restrictions, if any, that the Compensation Committee deems appropriate, including a continued employment or service requirement. The Compensation Committee may determine that any stock award will be subject to the attainment of performance measures over an established performance period. Generally, the holder of an RSA will have the rights of a stockholder, including the right to vote and receive dividends. The holder of an RSU will have no rights as a stockholder of the company but may be entitled to receive dividend equivalents. Notwithstanding the foregoing, dividends or dividend equivalents credited/payable in connection with RSAs or RSUs that are not yet vested will be subject to the same restrictions and risk of forfeiture as the underlying RSAs or RSUs and will not be paid until the underlying RSAs or RSUs vest.

RSAs and RSUs granted under the 2022 LTIP may not become exercisable, vest or be settled, in whole or in part, for non-management directors, prior to the one-year anniversary, and for all other participants, prior to the three-year anniversary, of the date of grant, except that the Compensation Committee may provide that RSAs or RSUs become exercisable, vest or settle prior to such date in the event of the participant’s death or disability or in the event of a change in control. Further, up to 5% of

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Corporate Governance

2022 PROXY STATEMENT

CORPORATE GOVERNANCE

the aggregate number of shares of common stock authorized for issuance under the 2022 LTIP may be issued pursuant to awards subject to any, or no, vesting conditions, as the Compensation Committee determines appropriate.

Performance Measures. The Compensation Committee may specify that an award or a portion of an award is conditioned on the satisfaction of performance criteria selected by the Compensation Committee and specified at the time the award is granted. “Performance Measures” means one or more of the following (or a derivation of the following): objective corporate-wide or subsidiary, division, operating unit or individual measures, stated in either absolute terms, per-share or relative terms, such as rates of growth or improvement, compared to a previous year’s results or to a designated comparison group, either based upon United States Generally Accepted Accounting Principles (GAAP) or non-GAAP financial results, individually or in combination, measured annually or cumulatively over a period of years: (1) the attainment by a share of common stock of a specified fair market value for a specified period of time, (2) earnings per share, (3) return to stockholders, (4) return on assets, (5) return on equity, (6) revenue (organic or otherwise), (7) cash flow, (8) operating expense reduction, (9) return on investment, (10) return on capital, (11) operating margin, (12) net income, (13) earnings before interest, taxes, depreciation, amortization and/or change in estimated earnout payables or net earnings (either before or after interest, taxes, depreciation, amortization and/or change in estimated earnout payables), (14) operating earnings, (15) net cash provided by operations, or (16) strategic business criteria, consisting of one or more objectives such as geographic business expansion goals, cost targets, customer satisfaction ratings, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation, risk management, audit scores, productivity, efficiency, ESG-related goals or objectives, and goals relating to acquisitions or divestitures, or any combination of the foregoing or any other performance criteria as the Compensation Committee may deem appropriate.

In the sole discretion of the Compensation Committee, the Compensation Committee may provide that one or more adjustments shall be made to one or more of the Performance Measures, provided that such adjustment is timely approved in connection with the establishment of such Performance Measures.

Amendment or Termination of the 2022 LTIP. The Board may amend or terminate the 2022 LTIP, subject to any requirement of stockholder approval required by law or the rules of the New York Stock Exchange; provided, however, that no amendment may impair in any material way an award holder’s rights without his or her consent; provided that no such consent will be required if the Compensation Committee determines in its sole discretion and prior to the date of any change in control that such amendment either is required or advisable in order for the company, the 2022 LTIP or the award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or is not reasonably likely to significantly diminish the benefits provided under such award, or that any such diminishment has been adequately compensated.

Adjustment. In the event of any change in capitalization or any distribution to holders of our common stock other than a regular cash dividend, the Compensation Committee will equitably adjust the number of shares available under the plan, the share limitations described above and the terms of outstanding awards.

Change in Control. In the event of the consummation of any acquisition by any person or group of 50% or more of the combined voting power of our outstanding securities then entitled to vote for the election of directors or in the event of any change during any two-year period in the majority of the members of the Board whose election is not approved by at least two-thirds of the members of the Board who either were directors at the beginning of such period or whose election was previously so approved, then the Compensation Committee may through the terms of an award or otherwise provide that any or all of the following will occur, either immediately upon the change in control, or upon termination of a participant’s employment or service within six months prior to or twenty-four months following the change in control: (i) all outstanding options and SARs will immediately become vested and exercisable in full; (ii) the restriction period applicable to any outstanding RSA or RSU will lapse; (iii) the performance period applicable to any outstanding award will lapse; and/or (iv) the performance measures applicable to any outstanding award will be deemed to be satisfied at their target levels or, if greater, on a pro rata basis based on actual achievement as of the date of the change in control. The Board may require that the acquiring company substitute or cash out outstanding awards. Certain additional requirements apply to awards that are subject to Section 409A of the Code.

Substitute Awards. The Committee may grant awards in substitution for any award previously granted by a company or other entity in connection with a corporate transaction, such as a merger or consolidation with another entity or acquisition of property or stock of another entity. Substitute awards will not count against the 2022 LTIP overall share limit or any sublimit in the 2022 LTIP (nor will shares of common stock subject to substitute awards be added to the shares available for awards under the 2022 LTIP), except as may be required by the Code. As permitted by applicable stock exchange rules, the Committee may grant awards pursuant to a pre-existing plan of a company acquired by or combined with the company and such awards will not reduce the shares available under the 2022 LTIP (nor will shares of common stock subject to such awards be added to the shares available for awards under the 2022 LTIP), provided that such awards are made only to those who were not employed by or providing services to the company immediately prior to the acquisition.

United States Federal Income Tax Consequences. The following discussion is intended to be a summary only of the federal income tax aspects of awards granted under the 2022 LTIP and not of state, local or foreign taxes that may apply. Individual tax consequences may vary.

•Section 162(m). Under Section 162(m) of the Code, compensation to named executive officers over $1,000,000 is generally not deductible for federal income tax purposes.

•ISOs. A participant who is granted an ISO does not realize any taxable income upon the date of grant or the date of exercise (except possibly for alternative minimum tax). Similarly, we are not entitled to any deduction at the time of grant or at the time of exercise. If the participant makes no disposition of the shares acquired pursuant to an ISO before the later of two years from the date of grant or one year from the date of the exercise of such shares by the participant, any gain or loss realized on a subsequent disposition of the shares will be treated as a long-term capital gain or loss. Under such circumstances, we will not be entitled to any deduction for federal income tax purposes.

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2022 PROXY STATEMENT

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CORPORATE GOVERNANCE

•NQSOs and SARs. A participant who is granted a NQSO or a SAR does not have taxable income at the date of grant. Taxable, ordinary income occurs on the date of exercise in an amount equal to the difference between the exercise or base price of the shares and the market value of the shares on the date of exercise. We are entitled to a corresponding deduction for the same amount.

•RSAs. A participant who has been granted an RSA will not realize taxable income at the time of the grant, and we will not be entitled to a deduction at the time of the grant, assuming that the restrictions constitute a substantial risk of forfeiture for U.S. income tax purposes. When such restrictions lapse, the participant will receive ordinary income in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares. We will be entitled to a corresponding deduction. The participant may elect to include the value the RSA as income at the time it is granted under Section 83(b) of the Code, and we will take a corresponding income tax deduction.
•RSUs. Recipients of RSUs generally should not recognize income until such units are converted into cash or shares of our common stock. Upon conversion, the recipient will normally recognize ordinary income equal to the amount of cash and fair market value of the shares, if any, received upon such conversion. If the recipient is an employee, such ordinary income generally is subject to withholding of income and employment taxes. We generally will be allowed a deduction for federal income tax purposes in an amount equal to the ordinary income recognized by the employee.

New Plan Benefits. Because benefits under the 2022 LTIP will depend on the Compensation Committee’s actions and the fair market value of our common stock at various future dates, it is not possible to determine at this time the benefits that might be received by officers, employees and non-management directors if the 2022 LTIP is approved by stockholders. As of December 31, 2021, the closing price of our common stock was $169.67 per share.

Vote Required. The approval of the 2022 LTIP requires the affirmative vote of the holders of a majority of the shares of our common stock having voting power, present in person, deemed to be present or represented by proxy at the Annual Meeting.

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THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE ARTHUR J. GALLAGHER & CO. 2022 LONG-TERM INCENTIVE PLAN, INCLUDING 13,500,000 SHARES AUTHORIZED FOR ISSUANCE THEREUNDER

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2022 PROXY STATEMENT

CORPORATE GOVERNANCE

Equity Compensation Plan Information

The following table provides information as of December 31, 2021,2023, regarding the number of shares of our common stock that may be issued under our equity compensation plans.

 (a)  (b)  (c) 

 

 

 

 

 

 

 

 

 

(a)

 

(b)

 

(c)

Plan Category

 

Number of securities

to be issued

upon exercise of

outstanding options,

warrants and rights

  

Weighted-average

exercise price of

outstanding options,

warrants and rights

  

Number of securities remaining

available for future issuance

under equity compensation

plans (excluding securities

reflected in column (a))

 

 

Number of securities
to be issued upon
exercise of
outstanding
options, warrants
and rights

 

Weighted-average
exercise price of
outstanding options,
warrants and rights

 

Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans approved by security holders

 

 

9,636,968

(1) 

 

 

81.30

(2) 

 

 

15,176,698

(3) 

 

 

10,040,567

 

(1)

 

 

123.85

 

(2)

 

 

17,249,089

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans not approved by security holders

 

 

12,212

(4) 

 

 

—

 

 

 

—

 

 

 

12,488

 

(4)

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

9,649,180

 

 

 

81.30

(2) 

 

 

15,176,698

 

 

 

10,053,054

 

 

 

123.85

 

(2)

 

 

17,249,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

This amount includes the following:

7,539,640(1)

This amount includes the following:
•
7,857,981 shares that may be issued in connection with outstanding stock options;

223,025•

179,773 shares that may be issued in connection with earned performance share units,PSUs, and unearned performance share unitsPSUs valued at target levels; and

1,874,303•

2,015,197 unvested restrictedRSUs.
(2)
Indicates the weighted average exercise price of the outstanding stock units.

options included in column (a).

(2)

Indicates the weighted average exercise price of the outstanding stock options included in column (a).

(3)

This amount includes the following:

9,531,150(3)

This amount includes the following:
•
12,213,485 shares available under the 20172022 Long-Term Incentive Plan; and

5,645,548•

5,035,604 shares available under our Employee Stock Purchase Plan.

(4)

This amount represents deferred restricted stock units

(4)
This amount represents deferred RSUs under the Restricted Stock Plan, an equity compensation plan not approved by stockholders under which we have outstanding awards. All of our directors, officers and employees were eligible to receive awards under the plan, which provided for the grant of contingent rights to receive shares of our common stock. Awards under the plan were granted at the discretion of the Compensation Committee. Each award granted under the plan represents the right of the holder of the award to receive shares of our common stock, cash or a combination of shares and cash, subject to the holder’s continued employment with us for a period of time after the grant date of the award. The Compensation Committee determined each recipient of an award under the plan, the number of shares of common stock subject to such an award and the period of continued employment required for the vesting of such award. The last year we made awards under this plan was 2009.

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2022 PROXY STATEMENT

21

Audit Matters

Audit Matters

Item 3ITEM 2 – Ratification of Appointment of Independent Auditor

The Audit Committee has considered the qualifications of Ernst & Young LLP and has appointed Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.2024. As a matter of good governance, the Board is submitting the appointment of Ernst & Young LLP to our stockholders for ratification. If the appointment of Ernst & Young LLP is not ratified, the Audit Committee will consider the outcome of this vote in its future deliberations regarding the selection of our independent registered public accounting firm.

Principal Accountant Fees and Services

The following is a summary of Ernst & Young LLP’s fees for professional services rendered to us for the fiscal years ended December 31, 20212023 and 2020:2022:

2023

 

2022

 

2021

  2020 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Audit Fees(1)

 

$

5,126,000

 

 

$

4,723,000

 

$

7,374,000

 

 

$

6,371,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Audit-Related Fees(2)

 

 

1,450,000

 

 

 

1,420,000

 

 

2,033,000

 

 

 

1,828,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Compliance Fees(3)

 

 

116,000

 

 

 

1,022,000

 

 

610,000

 

 

 

208,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Advisory Fees(4)

 

 

623,000

 

 

 

525,000

 

 

466,000

 

 

 

554,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Other Fees(5)

 

 

4,000

 

 

 

7,000

 

 

11,000

 

 

 

6,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

7,319,000

 

 

$

7,697,000

 

$

10,494,000

 

 

$

8,967,000

 

 

 

 

 

 

 

 

(1)

Audit fees include fees associated with the annual audit of our company and our subsidiaries and the effectiveness of internal control over financial reporting, the review of our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K, and statutory audits required internationally.

(2)

Audit-related fees principally include issuance of service auditor reports (SOC 1 and SOC 2) related to operations at several of our subsidiaries, due diligence in connection with acquisitions, debt and equity issuance comfort letter procedures and advisory work related to our compliance with foreign statutory requirements.

(3)

Tax compliance fees include fees associated with the preparation of our annual Federal, state and international tax returns.

(4)

Tax advisory fees include tax advice and tax planning related to Federal, state and international tax matters.

(5)

All other fees principally include fees for access to an online accounting information database.

(1)
Audit fees include fees associated with the annual audit of our company and audit-relatedour subsidiaries and the effectiveness of internal control over financial reporting, the review of our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K, and statutory audits required internationally.
(2)
Audit-related fees principally include issuance of service auditor reports (SOC 1 and SOC 2) related to operations at several of our subsidiaries, due diligence in connection with acquisitions, debt and equity issuance comfort letter procedures and advisory work related to our compliance with foreign statutory requirements.
(3)
Tax compliance fees include fees associated with the preparation of our annual Federal, state and international tax returns.
(4)
Tax advisory fees include tax advice and tax planning related to Federal, state and international tax matters.
(5)
All other fees principally include fees for access to an online accounting information database.

Audit fees were higher in 20212023 due to increases in fees charged for audit services and an increase in audit fees and scope of services provided primarily as a result of the acquisition of Willis Reactivity during 2023 and other audit-related matters. Audit-related fees were higher in 2023 due to increased activity related to debt and equity registration statements, service auditor report (SOC 1reports and SOC 2) work in 2021, partially offset by less statutory audit and due diligence work.compliance-related matters. Tax advisory fees were lower in 2023 due to a decrease in scope of services. Tax compliance fees were higher in 20212023 due to an increase in scope of services primarily as a result of acquisition and legal entity restructuring activity. Tax compliance fees were lower in 2021 duerelated to a decrease in scope of services provided. In 2021, ourfiling amended prior year income tax compliance work was transitioned to a different international accounting firm.returns.

Audit Committee Pre-Approval Policies and Procedures

All audit services, audit-related services, tax services and other services for fiscal years 20212023 and 20202022 were pre-approved by the Audit Committee. It is the policy of the Audit Committee to pre-approve the engagement of Ernst & Young LLP before we engage such firm to render audit or other permitted non-audit services. The Audit Committee has adopted procedures for pre-approving all audit and permitted non-audit services provided by Ernst & Young LLP. The Audit Committee annually pre-approves a list of specific services and categories of services, subject to a specified cost level. Part of this approval process includes making a determination as to whether permitted non-audit services are consistent with the SEC’s rules on auditor independence. The Audit Committee has delegated pre-approval authority to the ChairmanChair of the Audit Committee for the types of services that Ernst & Young LLP has historically been retained to perform related to integrated audit and other recurring services, subject to reporting any such approvals at the next Audit Committee meeting.

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting to respond to appropriate questions and to make a statement if the representative so desires.

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THE BOARD RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST

The Board recommends that you vote “FOR” ratification of the appointment of Ernst & YOUNGYoung LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBERas our independent registered public accounting firm for the year ending December 31, 20222024

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2024 PROXY STATEMENT

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2022 PROXY STATEMENT

Audit Committee Report

The Audit Committee represents and assists the Board in fulfilling its responsibilities for general oversight of the integrity of the company’s financial statements, risk assessment and risk management, and compliance with legal and regulatory requirements. The Audit Committee manages the company’s relationship with and is responsible for the appointment, retention, termination and compensation of Ernst & Young LLP. Ernst & Young LLP has served as the company’s auditor since 1973. The Audit Committee reviews Ernst & Young LLP’s independence, capabilities, expertise, performance and fees in deciding whether to retain its services.

The company’s management is responsible for the preparation, presentation and integrity of its consolidated financial statements, accounting and financial reporting principles, and internal controls designed to assure compliance with accounting standards and applicable laws and regulations. Ernst & Young LLP is responsible for auditing the company’s consolidated financial statements and expressing an opinion as to their conformity with U.S. generally accepted accounting principles and for auditing the effectiveness of the company’s internal controls over financial reporting. The Audit Committee monitors the financial reporting process and reports its findings to the Board.

The Audit Committee carried out its duties and responsibilities, including the following specific actions:

•

Audit Matters

Audit Committee Report

The Audit Committee represents and assists the Board in fulfilling its responsibilities for general oversight of the integrity of the company’s financial statements, risk assessment and risk management, and compliance with legal and regulatory requirements. The Audit Committee manages the company’s relationship with and is responsible for the appointment, retention, termination and compensation of Ernst & Young LLP. Ernst & Young LLP has served as the company’s auditor since 1973. The Audit Committee reviews Ernst & Young LLP’s independence, capabilities, expertise, performance and fees in deciding whether to retain its services.

The company’s management is responsible for the preparation, presentation and integrity of its consolidated financial statements, accounting and financial reporting principles, and internal controls designed to assure compliance with accounting standards and applicable laws and regulations. Ernst & Young LLP is responsible for auditing the company’s consolidated financial statements and expressing an opinion as to their conformity with U.S. generally accepted accounting principles and for auditing the effectiveness of the company’s internal controls over financial reporting. The Audit Committee monitors the financial reporting process and reports its findings to the Board.

The Audit Committee carried out its duties and responsibilities, including the following specific actions:

•
Reviewed and discussed with management and Ernst & Young LLP the company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 20212023 and its internal control over financial reporting as of December 31, 2021;

2023;
•

Reviewed and discussed with Ernst & Young LLP all matters required to be discussed by applicable standards of the Public Company Accounting Oversight Board (PCAOB) and the SEC; and

•

Obtained the written disclosures and letter from Ernst & Young LLP regarding its communications with the Audit Committee concerning Ernst & Young LLP’s independence as required by the PCAOB, including the requirements under PCAOB Rule 3526, and has discussed with Ernst & Young LLP its independence.

Based on these reviews and discussions with management and Ernst & Young LLP, the Audit Committee recommended to the Board that the company’s audited consolidated financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for filing with the SEC. The Audit Committee believes that the retention of Ernst & Young LLP to serve as the company’s independent registered public accounting firm is in the best interests of the company.

AUDIT COMMITTEE

Ralph Nicoletti (Chair)

William Bax

Teresa Clarke

Norman Rosenthal

Based on these reviews and discussions with management and Ernst & Young LLP, the Audit Committee recommended to the Board that the company’s audited consolidated financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, for filing with the SEC. The Audit Committee believes that the retention of Ernst & Young LLP to serve as the company’s independent registered public accounting firm is in the best interests of the company.

AUDIT COMMITTEE

Ralph J. Nicoletti (Chair)

William L. Bax

Teresa H. Clarke

Christopher C. Miskel

Norman L. Rosenthal

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2022 PROXY STATEMENT

23

Compensation Discussion and Analysis

Compensation Discussion and Analysis

COMPENSATION TOPICS

This Compensation Discussion and Analysis discusses the compensation of the following named executive officers:

•Pat Gallagher

Chairman, President and Chief Executive Officer

•Doug Howell

Chief Financial Officer

•Tom Gallagher

President – Global P/C Brokerage

•Scott Hudson

President – Risk Management

•Walt Bay

General Counsel and Secretary

Non-GAAP financial measures. See Exhibit B for additional information regarding the non-GAAP financial measures referred to

Overview of Our Executive Compensation Program

22

Pat Gallagher

Chairman and

Chief Executive Officer

Doug Howell

Chief Financial

Officer

Tom Gallagher

President

Scott Hudson

President –

Risk Management

Walt Bay

General Counsel and

Secretary

Key Executive Compensation Practices

23

2023 Compensation

24

Compensation Committee Report

32

Executive Compensation Tables

33

•
2023 Summary Compensation Table

33

•
2023 Grants of Plan-Based Awards

35

•
Outstanding Equity Awards at 2023 Fiscal Year-End

36

•
2023 Option Exercises and Stock Vested

37

•
2023 Pension Benefits

38

•
2023 Nonqualified Deferred Compensation

39

•
2023 Potential Payments upon Termination or Change in this Proxy Statement (adjusted revenue, adjusted EBITDAC, and adjusted EBITDAC per share, as defined for our annual cash incentive and performance share unit programs, and adjusted EBITDAC margin and organic revenue growth), including required reconciliations to the most directly comparable GAAP financial measures.Control

39

See Exhibit A for additional information regarding the non-GAAP financial measures referred to in this Proxy Statement (adjusted revenue, adjusted EBITDAC, adjusted EBITDAC per share, adjusted EBITDAC margin and organic revenue growth as used in our annual cash incentive and performance share unit programs), including required reconciliations to the most directly comparable GAAP financial measures.

2024 PROXY STATEMENT

21

Compensation Discussion and Analysis

Overview of Our Executive Compensation Program

The Compensation Committee (the Committee) believes that our executive compensation program promotes the long-term interests of the company and its stockholders. We reward performance by emphasizing a balance of short- and long-term compensation vehicles. The key principles and features of the program are set forth below.

Principle

Program Features

Principle

Program Features

Pay for Performance

•
Our program emphasizes at-risk incentive award opportunities tied to key financial measures.

•
Maximum award opportunities under our annual cash incentive program are determined based on achievement of adjusted revenue and adjusted EBITDAC growth goals set by the Compensation Committee. Final award determinations reflect the Committee’s consideration of additional factors including organic revenue growth, adjusted EBITDAC margin, divisional performance and individual achievement, including progress toward inclusion and diversity goals.

•
Performance share units (PSUs), representing 75% of our CEO’s and a significant portion60% of other executive officers’ long-term incentive compensation, are tied to three-year growth in adjusted EBITDAC per share.

Stockholder Alignment

•  Performance share units,
PSUs, stock options restricted stock units and Deferred Equity Participation Plan (DEPP) awards encourage executive officers to pursue the growth of our business in a way that benefits stockholders over the long term.

•
Our executive officers own significant amounts of Gallaghercompany stock and are subject to stock ownership guidelines (six times salary for CEO, four times for CFO and three times for other executive officers). All of our executive officers meet these guidelines.

Attract and Retain

World-Class Talent

•
Compensation elements and award opportunities enable us to compete effectively for executive talent.

•
The Compensation Committee engages aan external compensation consultant to conduct a market assessment to ensure that our program is highly competitive.

•
High performers are awarded above-target pay when company performance goals are exceeded.

•
DEPP awards encourage retention over the long term by requiring executivesexecutive officers to remain employed with us through at least age 62 in order to vest in their awards.

Committee Discretion

•
While annual incentive awards are determined primarily based on achievement of company performance objectives, the Committee exercises discretion when necessary to adjust awards based on factors such as organic revenue growth, individual or division performance, changes in accounting standards, economic or business conditions, inclusion and diversity objectives, adherence to our cultural values or similar matters.

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24

Compensation Discussion and Analysis

2022 PROXY STATEMENT

Key Executive Compensation Practices

COMPENSATION DISCUSSION AND ANALYSIS

Key Pay and Governance Practices

The Compensation Committee continually evaluates emerging best practices related to executive compensation and governance and considers modifications to our executive compensation program that support our strategic objectives, provide an appropriate balance of risk and reward for our named executive officers, and align their compensation with the long-term interests of the company. In 2023, stockholders expressed support for our executive compensation program, approving our “say on pay” proposal with 92.5% of the vote. The following charts summarize certain of our key pay and governanceexecutive compensation practices.

What We Do

What We Don’t Do

What We Doimg134299666_20.jpg 

Double-trigger change-in-control agreements

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No automatic single-trigger change-in-control payments in our equity plans or our change in control agreements

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Double-trigger change-in-control agreements

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Our 2022 Long-Term Incentive Plan requiresequity plans require the Board to approve any accelerated payouts on a change in control (i.e., not single-trigger)(no automatic single-trigger vesting)

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No new excise tax gross-ups in executive officer change-in-control agreements

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Performance share units (PSUs)PSUs with three-year performance period

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No guaranteed incentive awards for executive officers

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Minimum vesting requirements for equity awards under our plans. In practice, PSUs cliff vest in three years and stock options vest ratably over years three through five and RSUs cliff vest in five years

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No employment agreement with any of our named executive officers

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Executive compensation clawbacks (see below)

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No pledges of common stock by directors or executive officers

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Stock ownership guidelines for(see below)

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No hedging of common stock by directors, executive officers and directors

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Clawback policy for equity and cash incentive awards

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Our by-laws provide for proxy access (3% ownership / 3 years / group of up to 20 / greater of 20% of Board seats or 2 directors)

other employees

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Equity grant policy, including a uniform grant date for annual equity awards

What We Don’t Do

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No single-trigger change-in-control payments in our equity plans or our change in control agreements

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No guaranteed incentive awards for senior executives

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No employment agreement with any of our named executive officers

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No pledging of common stock by executive officers and directors without prior approval

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No hedging of common stock by directors, executive officers or employees

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No excessive perquisites or related tax gross-ups

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No new excise tax gross-ups upon change in control

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No stock option repricing or stock option cash buyouts or liberal share recycling in equity plans

Stockholder Views

When making determinations regarding corporate governanceClawbacks. As required by the NYSE, the Board has adopted an Incentive Compensation Recovery Policy under which the company will seek to recover incentive compensation “erroneously awarded” to Section 16 Officers in the event of a qualifying accounting restatement. In addition, our plan documents and award agreements provide that the company may recover executive compensation, our Boardofficers’ annual cash incentive and equity awards in the event of Directors pays close attentioncertain material misconduct or behavior that could cause harm to stockholders or material reputational risk to the viewscompany, including activity contrary, inimical, or harmful to the interests of the company, that violates company policies including our Insider Trading Policy and Global Standards of Business Conduct or conduct that could give rise to criminal or civil penalties.

Stock Ownership Guidelines. As set forth in our Governance Guidelines, executive officers with at least five years of service are expected to own an amount of our stockholders, includingcommon stock with a value equal to a multiple of his or her annualized base salary, as follows: six times annualized base salary for the 91.8% approval rate receivedChief Executive Officer, four times annualized base salary for our “say on pay” proposalthe Chief Financial Officer and three times annualized base salary for the other executive officers. For purposes of determining whether executive officers have met the stock ownership guidelines, shares owned directly and net shares underlying vested stock options, unvested restricted stock units, deferred vested shares, and amounts deemed invested in 2021, when making determinations regarding corporate governancecompany stock through the company’s nonqualified deferred compensation plans (including the DEPP and executive compensation.

In addition, during the year, membersSS&T Plan), are included in calculating ownership levels. All of our management team engagedexecutive officers are currently in compliance with stockholders representing more than 50% of our outstanding shares to discuss the 2022 Long-Term Incentive Plan and related share authorization request, as well as various environmental, social and governance (ESG) and executive compensation matters. Based in part on feedback from our stockholders, in 2021 we published our first Climate Disclosure Report includingthese guidelines. See “Director Compensation” for information regarding stock ownership guidelines applicable to our carbon emissions. In addition, we considered the views of our stockholders when determining the size and design of the 2022 Long-Term Incentive Plan, and related share authorization request, included in this Proxy Statement.directors.

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2024 PROXY STATEMENT

2022 PROXY STATEMENT

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23

Compensation Discussion and Analysis

2023 Compensation

COMPENSATION DISCUSSION AND ANALYSIS

2021 Compensation

Components of Compensation for Named Executive Officers

Compensation Element

Objective

Key Features

Compensation Element

Base Salary

Objective

Key Features

Base Salary

Recognize the experience and expertise of our named executive officers and compensate them for fulfilling the duties and responsibilities of their positions

Base salaries reflect internal pay equity considerations and may be increased from time to time based on job performance, promotion into a new role, expansion of duties, or market conditions

See 2023 Compensation Actions for the 2023 base salary decisions for our named executive officers

Annual Cash Incentives

Reward strong operational and financial performance that further short-term strategic objectives

Maximum annual cash incentive opportunities are tied to significant growth in adjusted revenue and adjusted EBITDAC. Final awards are subject to the Compensation Committee’s discretion and are determined by thesuch Committee based on various factors, including the company’s organic revenue growth, individual or division performance, changes in accounting standards, economic or business conditions, inclusion and diversity objectives, adherence to our culturecultural values or similar matters

See page 2725 for more information

Long-Term Incentives

Performance share units (PSUs), stock options and restricted stock units

Tie a significant portion of compensation to our long-term performance, promote retention of named executive officers and align the financial interests of named executive officers with those of stockholders

PSUs and stock options and restricted stock units each tie named executive officers’ long-term wealth to the performance of our stock while multi-year vesting requirements reinforce sustainable value creation and promote retention of key executivesexecutive officers

See pages 2725 to 3129 for more information

Deferred Equity Participation Plan (DEPP)

Promote retention of named executive officers and align their financial interests with those of stockholders

Vesting of awards is delayed until named executive officers reach age 62, and for one-year increments after such age

Each named executive officer has made irrevocable elections to invest their awards in a fund representing our common stock

See page 3634 for more information

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2022 PROXY STATEMENT

Compensation Discussion and Analysis

COMPENSATION DISCUSSION AND ANALYSIS

Annual Cash Incentives

In 2021,2023, consistent with performance results, the Compensation Committee approved maximum award opportunitiesawards under our annual cash incentive program, to be determined as follows: (i) target award opportunitiesawards of 200%225% of base salary for our CEO and 100%125% of base salary for our other named executive officers (these percentages were unchanged from 2022), multiplied by (ii) a percentage determined by the combination of adjusted revenue growth and adjusted EBITDAC growth set forth in the table below. The percentages set outin the table below are maximum award opportunities and the Compensation Committee retains discretion to reduce awards for performance that does not meet its objectives.

    

 

 

Adjusted Revenue Growth*

 

       

0% to 2.49%

 

 

 

2.5% to 4.99%

 

 

 

5% to 7.49%

 

 

 

7.5% to 9.99%

 

 

 

 

≥ 10%

Adjusted

EBITDAC

Growth*

 

 

    0% to 4.99%    

 

 

 

100%

 

 

 

100%

 

 

 

100%

 

 

 

100%

 

 

 

100%

 

 

 

    5% to 9.99%    

 

 

 

100%

 

 

 

100%

 

 

 

125%

 

 

 

125%

 

 

 

150%

 

 

 

    10% to 13.99%    

 

 

 

100%

 

 

 

125%

 

 

 

150%

 

 

 

150%

 

 

 

175%

 

 

 

    14% to 19.99%    

 

 

 

100%

 

 

 

125%

 

 

 

150%

 

 

 

175%

 

 

 

200%

 

 

 

    ≥20%    

 

 

 

100%

 

 

 

150%

 

 

 

175%

 

 

 

200%

 

 

 

200%

 

 

 

 

 

 

 

 

Adjusted Revenue Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0% to 2.49%

2.5% to 4.99%

5% to 7.49%

7.5% to 9.99%

≥ 10%

 

0% to 4.99%

 

100%

 

 

100%

 

 

100%

 

 

100%

 

 

100%

Adjusted

5% to 9.99%

 

100%

 

 

100%

 

 

125%

 

 

125%

 

 

150%

EBITDAC

10% to 13.99%

 

100%

 

 

125%

 

 

150%

 

 

150%

 

 

175%

Growth*

14% to 19.99%

 

100%

 

 

125%

 

 

150%

 

 

175%

 

 

200%

 

≥ 20%

 

100%

 

 

150%

 

 

175%

 

 

200%

 

 

200%

*

We define “adjusted revenue” the same here as we do in our other filings (i.e., revenue for the brokerage segment and revenue before reimbursements for the risk management segment excluding gains on sales of books of business and adjusted to remove the effect of foreign currency translation). However, we define “adjusted EBITDAC” for our annual cash incentives and performance share units as follows: EBITDAC for the brokerage and risk management segments excluding (i) gains on sales of books of business, (ii) lease abandonment and workforce termination charges, and (iii) the effect of foreign currency translation. Unlike adjusted EBITDAC as presented in our most recent earnings release, in this context the measure does not exclude acquisition integration costs and other acquisition-related adjustments.

* We define “adjusted EBITDAC” for our annual cash incentives and PSUs as follows: EBITDAC for the brokerage and risk management segments excluding (i) gains on sales of books of business, (ii) lease abandonment and workforce termination charges, and (iii) the effect of foreign currency translation. Unlike adjusted EBITDAC as presented in our most recently filed Annual Report on Form 10-K, in this context the measure does not exclude acquisition integration costs other than de minimis amounts included therein related to severance costs.

For the annual cash incentive program, the Compensation Committee uses adjusted revenue growth and adjusted EBITDAC growth as defined above because it believes these measures:

•

incentivize our executivesexecutive officers to make business decisions that align with the long-term interests of our stockholders,

•

hold our executivesexecutive officers accountable for acquisition-relatedintegration expenses associated with our merger and acquisition activity, and

•

provide strong line of sight between operating decisions and the annual cash incentives earned by our executives.

executive officers.

In 2021,2023, we achieved adjusted revenue growth of 13.1%18.7% and adjusted EBITDAC growth of 17.2%19.0%. Based on this performance, as highlighted in the table above, each named executive officer qualified for a maximum award opportunity of 200% of his target award. Final awards for each named executive officer, discussed under 20212023 Compensation Actions, were determined in the discretion of the Compensation Committee taking into account achievements of the company, the applicable division and each individual, among other factors.

Long-Term Incentives

In 2021,2023, the Compensation Committee determined a target long-term incentive award value (as a percentage of base salary) for each named executive officer. In considerationThe Committee based this target value upon a number of the company’s consistently strong financial performance over recent yearsfactors including retention considerations, internal pay equity, our historical practices and to better align Pat Gallagher’s compensation with the compensationexternal market data (see discussion of similarly situated CEOs in our peer group, the Committee increased Pat Gallagher’s target long-term incentive award from 315% to 360% of base salary.pay comparison groups on page 31). The Compensation Committee allocated the target award value for each named executive officer between PSUs and stock options. PSUs continue to make up the largest portion of each named executive officer’s award due to the Committee’s commitment to drive business performance and align executive interests with stockholder interests.

For the PSUs, the Compensation Committee uses a three-year average of adjusted EBITDAC per share growth (as defined) because it believes this measure:

•

incentivizes our executivesexecutive officers to make business decisions that align with the long-term interests of our stockholders,

•

holds our executivesexecutive officers accountable for acquisition-relatedintegration expenses associated with our merger and acquisition activity,

•

provides strong line of sight between operating decisions and the long-term incentives earned by our executives,executive officers, and

•

by calculating it on a per-share basis, ensures that we maintain an optimal capital structure and act as effective stewards of our stockholders’ investment.

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2024 PROXY STATEMENT

2022 PROXY STATEMENT

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25

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Discussion and Analysis

Set forth below is the target award value and allocation between award types for each named executive officer. See 2023 Compensation Actions for the actual grant date fair value of the PSU and stock option awards granted.

 

 

 

 

 

 

 

 

 

 

 

Named Executive

Officer

 

Target Percent      

of Salary      

 

Target Grant

Amount

  

Performance      

Share Units      

 

Stock      

Options      

Target
Percent
of Salary*

Target Grant
Amount

Performance
Share Units

Stock
Options

 

   

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

 

 

360%      

 

 

 

    $

 

 

4,680,000

 

 

 

 

 

 

75%      

 

 

 

25%      

 

 

435%

 

 

$

5,655,000

 

 

 

75%

 

 

25%

 

   

Doug Howell

 

 

125%      

 

 

 

    $

 

 

1,187,500

 

 

 

 

 

 

60%      

 

 

 

40%      

 

 

150%

 

 

$

1,425,000

 

 

 

60%

 

 

40%

 

   

Tom Gallagher

 

 

125%      

 

 

 

    $

 

 

1,250,000

 

 

 

 

 

 

60%      

 

 

 

40%      

 

 

150%

 

 

$

1,500,000

 

 

 

60%

 

 

40%

 

   

Scott Hudson

 

 

125%      

 

 

 

    $

 

 

875,000

 

 

 

 

 

 

60%      

 

 

 

40%      

 

 

150%

 

 

$

1,125,000

 

 

 

60%

 

 

40%

 

   

Walt Bay

 

 

125%      

 

 

 

    $

 

 

931,250

 

 

 

 

 

 

60%      

 

 

 

40%      

 

 

150%

 

 

$

1,112,500

 

 

 

60%

 

 

40%

 

Performance Share Units (PSUs)

* See “Comparative Market Assessment” on page 31 for more information regarding these percentages.

PSUs. PSUs are granted on a provisional basis and are earned based on our average annual growth in “adjusted EBITDAC” per share (see the definition of “adjusted EBITDAC” under Annual Cash Incentives) over a three-year period. The award is forfeited for growth less than 4%; 4-9% growth results in a number of earned PSUs interpolated on a straight-line basis between 50% and 100%; 9-14% growth results in a number of earned PSUs interpolated on a straight-line basis between 100% and 200%; and growth of 14% and above results in named executive officers earning 200% of their original award amounts. Earned PSUs vest on the third anniversary of the grant date and settle in shares. For 2021,2023, our one-year growth in adjusted EBITDAC per share was 10.4%16.4%. PSUs granted in 20212023 and earned on the basis of average 2021-20232023-2025 performance will vest on March 16, 202415, 2026 and PSUs granted in 20202022 and earned on the basis of average 2020-20222022-2024 performance will vest on March 12, 2023.15, 2025. Based on 2019-20212021-2023 average annual growth in adjusted EBITDAC per share of 14.1%13.7%, named executive officers earned 200%194% of PSUs granted in 2019.2021. See 2021Outstanding Equity Awards at 2023 Fiscal Year End and 2023 Option Exercises and Stock Vested for more information.

Stock Options. Stock options vest one-third on each of the third, fourth and fifth anniversaries of the grant date and restricted stock units cliff vest on the fifth anniversary of the grant date. See Outstanding Equity Awards at 2021 2023 Fiscal Year-End and 20212023 Option Exercises and Stock Vested for information regarding vesting and exercise activity in 20212023 for these awards.

Perquisites

In lightorder to support our named executive officers’ efficiency in the performance of travel safety concerns at the outset of the COVID-19 pandemic,their duties, the Board has approved the use of Directors determined thatprivate aircraft by named executive officers should use chartered aircraft for business travel, as well as for personal travel when approved by our CEO. Named executive officers also received corporate and auto insurance, financial advisory services and other perquisites as reported in footnote (6) to the 2023 Summary Compensation Table. In addition, the company provides for reimbursement of certain taxes incurred outside the U.S. The company does not provide tax gross-ups on perquisites, including with respectperquisites. See footnote (6) to the imputed income from personal use of chartered aircraft. See footnote 6 to the 20212023 Summary Compensation Table for information about any such expenses for named executive officers in 2021.2023.

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2022 PROXY STATEMENT

COMPENSATION DISCUSSION AND ANALYSIS

2021 Compensation Actions

Compensation Discussion and Analysis

2023 Compensation Actions

Pat Gallagher – Chairman and CEO

Performance

Performance

Compensation

Compensation

The Compensation Committee believes that Pat Gallagher performed extremely well in 2021,2023, leading the company to 13.1%18.7% adjusted revenue growth, 17.2%19.0% adjusted EBITDAC growth and 10.4%16.4% adjusted EBITDAC per share growth in our combined brokerage and risk management segments (for definitions of these measures see Annual Cash Incentives above). Gallagher’s total return to stockholders in 20212023 was 39.0%20.5%. This performance compares favorably to the S&P 500 and S&P P&C Insurance indices,index, which had a total shareholder returnsreturn of 28.7% and 17.5%, respectively.10.7%.

In addition, the Committee recognized the following aspects of Mr.Pat Gallagher’s performance:

Organic growth. The company achieved 8.6%9.8% organic revenue growth during the year, 8.0%8.9% in the brokerage segment and 12.2%15.8% in the risk management segment.

Mergers and acquisitions.The company completed 3851 acquisitions, including the treaty reinsurance brokerage operations of Willis Towers Watson (“Willis Re”), the largest and most strategic acquisitionrepresenting $885.1 million in the company’s history, representing $1.0 billion inestimated total acquired annualized revenue.revenue, including larger acquisitions such as Buck, Cadence Insurance, Eastern Insurance and My Plan Manager. The company also made significant progress integrating the Willis Re and Buck acquisitions.

Quality and productivity.Productivity. The company increased its adjusted EBITDAC margin 12248 basis points to 31.8%32.5%.

Capital management. The company returned $392.0$473.6 million to stockholders as dividends, maintained significant liquidity and remained well within its debt covenants.

ESG.Sustainability. In 2021,2023, the company released its first Climate Disclosurean updated Sustainability Report, which includes information regardinga goal of Net Zero emissions in the company’s carbon emissions prepared in accordance with the Greenhouse Gas Protocol’s Corporate Accountingdirect operations (Scope 1 and Reporting Standard. Mr.Scope 2) by 2050 and an interim 2030 goal. Pat Gallagher also made continued progress on inclusion and diversity, including the establishment of the company’s Global Inclusioninitiatives to track and Diversity Committee and Inclusion Roundtable.improve supplier diversity.

Culture. Despite the vast majority of our colleagues working apart from one another due to the pandemic, Mr. Pat Gallagher continued to effectively promote our culture to colleagues around the world. In addition, for the eleventh consecutive year, the company was recognized by Ethisphere as a World’s Most Ethical Company.

Based on Pat Gallagher’s and the company’s performance, the Compensation Committee made the following compensation decisions for 2021:2023:

Base salary – increased from $1,250,000 toremained the same, at $1,300,000.

Annual cash incentive – $5,200,000,$5,850,000, 200% of his target award.

20212023 target PSU award – 28,87022,524 PSUs with a grant date value of $3,692,473.$3,988,775.

Stock option award – 76,97530,029 stock options with an exercise price of $127.90$177.09 and a grant date value of $1,799,676.$1,388,841.

DEPP award – $1,500,000.$2,250,000.

OverIn early 2023, the past three years, our total returnCompensation Committee approved an increase in Pat Gallagher's 2023 target long-term incentive award from 360% to stockholders (including dividends) was 142.1%, while Pat Gallagher’s compensation increased by 71.5%.435% of base salary. Please see "Comparative Market Assessment" below. The Compensation Committee believes that, with this change, Pat Gallagher’s compensation is appropriately aligned with the long-term interests of the company and its stockholders.

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2024 PROXY STATEMENT

2022 PROXY STATEMENT

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27

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Discussion and Analysis

Doug Howell – Chief Financial Officer

Performance

Performance

Compensation

Compensation

The Compensation Committee evaluated Doug Howell’s performance in light of the company’s overall performance as described above for Pat Gallagher. In addition, the Compensation Committee considered the following items:

•
his contributions as a member of the senior management team to the company’s strong overall financial performance;

•
his leadership of significant expense saving initiatives, despite an inflationary environment, as well as the return of travel and other expenses post-pandemic, resulting in an increase of our adjusted EBITDAC margin of 12248 basis points to 31.8%32.5%;

•
success in obtainingmaintaining investment grade credit ratings from S&P, Moody’s and Moody’sFitch in support of the company’s first issuances of public debt;

•  his contributions to the successful negotiation and completion of the acquisition of Willis Re, the largest and most strategic acquisition in the company’s history, including management of $3.0
$1.95 billion in public debt issuances and equity offerings to finance the transaction;successful renewal of our $1.7 billion credit facility; and

•  $97.4 million
successful execution and financing of net earnings from our clean energy investments.acquisition program using primarily cash and debt.

Based on Doug Howell’s and the company’s performance, the Compensation Committee made the following compensation decisions for 2021:2023:

Base salary – increased from $900,000 toremained the same, at $950,000.

Annual cash incentive – $1,900,000,$2,375,000, 200% of his target award.

20212023 target PSU award – 5,8604,541 PSUs with a grant date value of $749,494.$804,166.

Stock option award – 31,26512,107 stock options with an exercise price of $127.90$177.09 and a grant date value of $730,976.$559,949.

DEPP award – $600,000.

Special acquisition bonus –in consideration of his contributions to the Willis Re acquisition in 2021, including the completion of debt and common stock offerings to finance the transaction, Doug Howell was awarded a one-time cash bonus of $500,000 in early 2022.$900,000.

Tom Gallagher – President, Global P/C Brokerage

President*

Performance

Performance

Compensation

Compensation

In evaluating Tom Gallagher’s performance in 2021,2023, the Compensation Committee considered the following items:

•
his contributions as a member of the senior management team to the company’s strong overall financial performance;

•
the strong financial performance of our global P/C brokerage business, including 13.1% adjusted revenue growth, 16.1% adjusted EBITDAC growth and 8.1% organic revenue growth;

business;

•
completion by our global P/C brokerage business of 2543 acquisitions representing $889$500.9 million in estimated acquired annualized revenue;
•
his ongoing oversight of the integration of the Willis Re acquisition into our global P/C brokerage business; and

•
his leadership role in successfully negotiating and completingreorganizing the acquisitionleadership structure of Willis Re, the largest and most strategic acquisitionour global P/C brokerage business units in the company’s history.light of continued global growth.

Based on Tom Gallagher’s and the company’s performance, the Compensation Committee made the following compensation decisions for 2021:2023:

Base salary – increased from $900,000 toremained the same, at $1,000,000.

Annual cash incentive – $2,000,000,$2,500,000, 200% of his target award.

20212023 target PSU award – 6,1704,780 PSUs with a grant date value of $789,143.$846,490.

Stock option award – 32,89512,744 stock options with an exercise price of $127.90$177.09 and a grant date value of $769,085.$589,410.

DEPP award – $600,000.

Special acquisition bonus –in consideration of his leadership role in the Willis Re acquisition in 2021, Tom Gallagher was awarded a one-time cash bonus of $1,000,000 in early 2022.$900,000.

* On October 24, 2023, the Board of Directors appointed Tom Gallagher as President, succeeding Pat Gallagher in such role, effective January 1, 2024. Performance results are based on Tom Gallagher's prior role as President - P/C Brokerage.

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2022 PROXY STATEMENT

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Discussion and Analysis

Scott Hudson – President, Risk Management

Performance

Performance

Compensation

Compensation

In evaluating Scott Hudson’s performance in 2021,2023, the Compensation Committee considered the following items:

•
his contributions as a member of the senior management team to the company’s strong overall financial performance;

•
the strong financial performance of our risk management segment, including 9.5%18.4% adjusted revenue growth, 21.5%28.6% adjusted EBITDAC growth and 12.2%15.8% organic revenue growth;

•
the completion by our risk management segment of a large acquisition representing $59.1 million in estimated acquired annualized revenue; and
•
the ongoing diversification of our risk management segment’s book of business driven by significant growth in carrier and captive manager claims management outsourcing opportunities;

opportunities.

•  the reshaping of our risk management segment’s workforce to one that is over 70% virtual and a significant reduction in the segment’s physical office footprint; and

•  continued progress by our risk management segment in its overall utilization of our service centers in India and Las Vegas.

Based on Scott Hudson’s and the company’s performance, the Compensation Committee made the following compensation decisions for 2021:2023:

Base salary – remained the same, at $700,000.$750,000.

Annual cash incentive – $1,400,000,$1,875,000, 200% of his target award.

20212023 target PSU award – 4,3203,585 PSUs with a grant date value of $552,528.$634,868.

Stock option award – 23,0259,558 stock options with an exercise price of $127.90$177.09 and a grant date value of $538,325.$442,058.

DEPP award – $500,000.$750,000.

Walt Bay – General Counsel and Secretary

Performance

Performance

Compensation

Compensation

In evaluating Walt Bay’s performance in 2021,2023, the Compensation Committee considered the following items:

•
his contributions as a member of the senior management team to the company’s strong overall financial performance;

•
strong leadership of the company’s legal and compliance departments;

•
successful management of the company’s legal and reputational risks, including litigation, mergers and acquisitions and regulatory compliance issues;

and

•
his role as a strategic advisor to our Board, CEO and executive management team on key legal and business matters; and

matters.

•  his leadership role in successfully negotiating and completing the acquisition of Willis Re, the largest and most strategic acquisition in the company’s history.

Based on Walt Bay’s and the company’s performance, the Compensation Committee made the following compensation decisions for 2021:2023:

Base salary – increased from $675,000 toremained the same, at $725,000.

Annual cash incentive – $1,450,000,$1,812,500, 200% of his target award.

20212023 target PSU award – 4,5953,545 PSUs with a grant date value of $587,701.$627,784.

Stock option award – 24,5009,452 stock options with an exercise price of $127.90$177.09 and a grant date value of $572,810.$437,155.

DEPP award – $450,000.$675,000.

2024 PROXY STATEMENT

29

Compensation Discussion and Analysis

Compensation Decision-Making Process

The Compensation Committee is responsible for determining compensation opportunities for our named executive officers, establishing the annual total value to be transferred through our equity plans, setting thresholds, targets and maximum awards for incentive compensation, establishing performance measures and approving final award amounts. To determine compensation opportunities for our named executive officers, the Committee takes into account the compensation objectives noted earlier under Components of Compensation for Named Executive Officers, compensation data for our comparison groups, trends in the financial service and insurance brokerage sectors and the strategic value of a given role, among other factors. The Compensation Committee may delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee, members of the Board or officers or other employees of the company all or any portion of the Committee’s authority, duties and responsibilities, to the extent permitted by law or applicable plan documents.

Special acquisition bonus –Tally Sheets

The Compensation Committee also considers the data compiled in considerationa tally sheet prepared by management for each named executive officer. Tally sheets provide:

•
a comprehensive view of our compensation payout exposure under various termination scenarios (for example, voluntary or involuntary termination, retirement, and change in control);
•
details regarding all compensation, benefits and perquisites delivered to our named executive officers during the most recent four-year period and a projection for the coming year; and
•
an analysis of equity and deferred compensation, which provides insight into total wealth accumulation for each officer, as well as the sensitivity of these figures to changes in our stock price.

This information provides a comprehensive context in which the Committee can determine the appropriate type and amount of compensation for each named executive officer.

Role of the CEO

At the beginning of each year, Pat Gallagher proposes performance objectives for the company and himself. The Compensation Committee and the Board review these objectives with Mr. Gallagher and make modifications as necessary. Following this review and discussion, the Compensation Committee and the Board finalize and approve the objectives for Mr. Gallagher and the company. The objectives include both quantitative financial measurements and qualitative strategic and operational considerations that focus on factors Mr. Gallagher and the Board believe create long-term stockholder value. Mr. Gallagher reviews and discusses preliminary considerations regarding his own compensation with the Compensation Committee but does not participate in the Committee’s final determination of his leadership rolecompensation. Mr. Gallagher also reviews the performance of each other named executive officer and presents a summary of these performance reviews to the Committee, along with preliminary recommendations regarding salary adjustments, if any, and annual award amounts.

Role of the Compensation Consultant

The Compensation Committee retained Pearl Meyer as its independent executive compensation consultant. In connection with its engagement, Pearl Meyer reviewed 2023 proxy season results and implications for our pay practices; assisted in negotiating the acquisitionreview and confirmation of Willis Re in 2021, Walt Bay was awarded a one-time cash bonusour peer group for executive compensation and performance review purposes; provided updates on emerging executive compensation trends, including proxy advisory firm and regulatory developments; and reviewed and assessed individual elements of $500,000 in early 2022.our pay programs for executive officers, including the competitiveness of pay levels and incentive program design. The Committee assessed Pearl Meyer’s independence pursuant to SEC and NYSE rules and concluded that no conflict of interest exists that would prevent Pearl Meyer from serving as an independent consultant to the Committee.

30

img134299666_7.jpg 

Compensation Discussion and Analysis

Comparative Market Assessment

Professional / Financial Services Firms

The Compensation Committee reviews compensation data from two different comparison groups as a market reference for its named executive officer compensation decisions.

LOGOProxy Comparison Group

The Compensation Committee uses the Proxy Comparison Group as a reference point for our compensation plan structure, pay mix, general equity granting practices and individual pay levels.

This group is focused on our direct competitors for executive talent. Its members are selected from insurance brokers and carriers and from professional and financial services companies that may compete with us for executive talent or in specific lines of business.

The companies listed below under “Insurance Brokers” are of particular interest for the Compensation Committee. Although Aon plc and Marsh & McLennan Companies are larger than we are on certain size dimensions, the Committee believes it is important to understand their compensation programs given that they directly compete with us for executive talent. Additionally, we are similarly-sized or significantly larger, depending on the size dimension, compared to the median-sized company in the broader peer group.

The Compensation Committee used the companies set forth below for the 2023 analysis. There were no changes from the comparison group disclosed in the prior year.

Automatic Data Processing, Inc.

2022 PROXY STATEMENT

31

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Decision-Making Process

The Compensation Committee is responsible for determining compensation opportunities for our named executive officers, establishing the annual total value to be transferred through our equity plans, setting thresholds, targets and maximum awards for incentive compensation, establishing performance measures and approving final award amounts. To determine compensation opportunities for our named executive officers, the Committee takes into account the compensation objectives noted earlier under Components of Compensation for Named Executive Officers, compensation data for our comparison groups, trends in the financial service and insurance brokerage sectors and the strategic value of a given role, among other factors.

Tally Sheets

The Compensation Committee also considers the data compiled in a tally sheet prepared by management for each named executive officer. Tally sheets provide:

a comprehensive view of our compensation payout exposure under various termination scenarios (for example, voluntary or involuntary termination, retirement, and change in control);

details regarding all compensation, benefits and perquisites delivered to our named executive officers during the most recent four-year period and a projection for the coming year; and

an analysis of equity and deferred compensation, which provides insight into total wealth accumulation for each officer, as well as the sensitivity of these figures to changes in our stock price.

This information provides a comprehensive context in which the Committee can determine the appropriate type and amount of compensation for each named executive officer.

Role of the CEO

At the beginning of each year, Pat Gallagher proposes performance objectives for the company and himself. The Compensation Committee and the Board review these objectives with Mr. Gallagher and make modifications as necessary. Following this review and discussion, the Compensation Committee and the Board finalize and approve the objectives for Mr. Gallagher and the company. The objectives include both quantitative financial measurements and qualitative strategic and operational considerations that focus on factors Mr. Gallagher and the Board believe create long-term stockholder value. Mr. Gallagher reviews and discusses preliminary considerations regarding his own compensation with the Compensation Committee but does not participate in the Committee’s final determination of his compensation. Mr. Gallagher also reviews the performance of each other named executive officer and presents a summary of these performance reviews to the Committee, along with preliminary recommendations regarding salary adjustments, if any, and annual award amounts.

Role of the Compensation Consultant

The Compensation Committee retained Pearl Meyer & Partners, LLC (Pearl Meyer) as its independent executive compensation consultant. In connection with its engagement, Pearl Meyer reviewed 2021 proxy season results and implications for our pay practices; assisted in the review and confirmation of our peer group for executive compensation and performance review purposes; provided updates on emerging executive compensation trends, including proxy advisory firm and regulatory developments; and reviewed and assessed all elements of our pay programs for executive officers, including the competitiveness of pay levels and incentive program design. The Committee assessed Pearl Meyer’s independence pursuant to SEC and NYSE rules and concluded that no conflict of interest exists that would prevent Pearl Meyer from serving as an independent consultant to the Committee.

The Bank of New York Mellon Corporation

32

2022 PROXY STATEMENT

COMPENSATION DISCUSSION AND ANALYSIS

Comparative Market Assessment

The Compensation Committee reviews compensation data from two different comparison groups as a market reference for its named executive officer compensation decisions.

Proxy Comparison Group

The Compensation Committee uses the Proxy Comparison Group as a reference point for our compensation plan structure, pay mix, general equity granting practices and individual pay levels.

This group is focused on our direct competitors for executive talent. Its members are selected from insurance brokers and carriers and from professional and financial services companies that may compete with us for executive talent or in specific lines of business.

The companies listed below under “Insurance Brokers” are of particular interest for the Compensation Committee. Although Aon, Marsh & McLennan and Willis Towers Watson are larger than we are on certain size dimensions, the Committee believes it is important to understand their compensation programs given that they directly compete with us for executive talent. Additionally, we are similarly-sized to the median-sized company in the broader peer group.

The Compensation Committee used the companies set forth below for the 2021 analysis. There were no changes from 2020. See below for a discussion of changes made to this group in 2021 for purposes of the 2022 analysis.

Insurance Brokers

The Charles Schwab Corporation

Fidelity National Financial, Inc.

Aon plc

Franklin Resources, Inc.

Moody’s Corporation

Northern Trust Corporation

Raymond James Financial, Inc.

Robert Half International Inc.

S&P Global Inc.

Survey Comparison Group

The Compensation Committee also uses a Survey Comparison Group as a reference point for individual pay levels for certain executive positions.

This group consists of insurance and general industry companies similar to us in total assets, revenue or number of employees. In 2023, the Compensation Committee reviewed pay data from published surveys conducted by Aon-Hewitt.

Results of the Comparative Market Assessment

For 2023, the Compensation Committee examined the total direct compensation opportunity (base salary, annual cash incentives and long-term incentives) for each named executive officer, as well as individual elements of compensation. Data from the Proxy Comparison Group and Survey Comparison Group were used as a market reference for compensation decisions. The Compensation Committee does not target total compensation to a specific percentile of comparison group compensation.

The comparative market assessment showed that target long-term incentives were below the 50th percentile for Pat Gallagher and at the 50th percentile for the other named executive officers compared to the Proxy Comparison Group. Taking the results of this assessment into consideration, the Compensation Committee approved increases in the long-term incentive targets for named executive officers, other than Pat Gallagher, from 125% of salary to 150% of salary, and for Pat Gallagher from 360% to 435% of salary.

Insurance Brokers

Aon plc

Brown & Brown, Inc.

Marsh & McLennan Companies, Inc.

Willis Towers Watson plc

Insurance Carriers

Insurance Carriers

Alleghany Corporation

American Financial Group Inc.

Arch Capital Group Ltd.

CNA Financial Corp.

Axis Capital Holdings Ltd.

The Hartford Financial Services Group, Inc.

Markel Corp.

W.R. Berkley Corp.

CNA Financial Corp.

The Hanover Insurance Group

Markel Corp.

Old Republic International Corp.

Unum Group

Professional / Financial Services Firms

Fidelity National Financial, Inc.

Raymond James Financial, Inc.

In 2021,

2024 PROXY STATEMENT

31

Compensation Discussion and Analysis

Compensation Committee Report

The Compensation Committee oversees the company’s compensation program for named executive officers on behalf of the Board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth above.

Based on the review and discussion referred to above, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the company’s 2024 Proxy Statement and incorporated by reference in its 2023 Annual Report on Form 10-K, which it files with the SEC.

Compensation Committee

Sherry Barrat (Chair)

David Johnson

Chris Miskel

32

img134299666_7.jpg 

Executive Compensation Tables

Executive Compensation Tables

2023 Summary Compensation Table

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name and
Principal
Position

Year

Salary
($)

Stock
Awards
($)(1)

Option
Awards
($)(2)

Non-Equity
Incentive Plan
Compensation
($)(3)

Bonus
($)(4)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5)

All Other
Compensation
($)(6)

Total
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

2023

1,300,000

 

3,988,775

 

1,388,841

 

5,850,000

 

—

 

36,498

 

2,932,108

 

15,496,222

 

Chairman and

2022

1,300,000

 

3,575,528

 

1,227,365

 

5,850,000

 

—

 

—

 

2,242,033

 

14,194,926

 

Chief Executive Officer

2021

1,300,000

 

3,692,473

 

1,799,676

 

5,200,000

 

—

 

19,063

 

1,871,043

 

13,882,255

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug Howell

2023

950,000

 

804,166

 

559,949

 

2,375,000

 

—

 

984

 

1,177,179

 

5,867,278

 

Chief Financial Officer

2022

950,000

 

726,205

 

498,312

 

2,375,000

 

—

 

—

 

779,346

 

5,328,863

 

 

2021

950,000

 

749,494

 

730,976

 

1,900,000

 

500,000

 

191

 

770,200

 

5,600,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom Gallagher

2023

1,000,000

 

846,490

 

589,410

 

2,500,000

 

—

 

27,671

 

1,725,962

 

6,689,533

 

President

2022

1,000,000

 

764,259

 

524,521

 

2,500,000

 

—

 

—

 

1,382,682

 

6,171,462

 

 

2021

1,000,000

 

789,143

 

769,085

 

2,000,000

 

1,000,000

 

—

 

935,000

 

6,493,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott Hudson

2023

750,000

 

634,868

 

442,058

 

1,875,000

 

—

 

—

 

904,161

 

4,606,086

 

President –

2022

750,000

 

573,194

 

393,305

 

1,875,000

 

—

 

—

 

624,545

 

4,216,044

 

Risk Management

2021

700,000

 

552,528

 

538,325

 

1,400,000

 

—

 

—

 

612,805

 

3,803,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt Bay

2023

725,000

 

627,784

 

437,155

 

1,812,500

 

—

 

—

 

870,068

 

4,472,507

 

General Counsel

2022

725,000

 

569,230

 

390,735

 

1,812,500

 

—

 

—

 

598,359

 

4,095,825

 

and Secretary

2021

725,000

 

587,701

 

572,810

 

1,450,000

 

500,000

 

—

 

583,357

 

4,418,868

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
This column includes the full grant date fair value of PSUs and RSUs granted during each fiscal year. The amounts reported in this column have been calculated in accordance with FASB ASC Topic 718, Compensation Committee conducted a strategic review– Stock Compensation. The amounts reported in this column for PSUs granted during each fiscal year represent the value of each award at the grant date based upon the probable outcome of the proxy comparison groupperformance conditions under the program, determined in light of concerns overaccordance with FASB ASC Topic 718. In accordance with SEC rules, any estimate for forfeitures is excluded from, and does not reduce, such amounts. Maximum payouts for the comparability of insurance carriers,2023 PSU awards as well as the growing importance of other screening criteria, including human capital management, which increases the relevance of the company’s total numberdate of employees in the determination of an appropriate peer group. Following this review, the Compensation Committee adopted a new peer group for the 2022 analysis. The new peer group retains 10 of the 16 peer group members for the 2021 analysis, with the following changes: (i) the removal of Alleghany Corporation, Unum Group, Old Republic International Corp., W.R. Berkley Corp., The Hanover Insurance Group and Axis Capital Holdings Ltd.; and (ii) the addition of Automatic Data Processing, Inc., Franklin Templeton, Moody’s Corporation, Nielsen Holdings plc, Northern Trust Corporation, Robert Half International Inc., S&P Global Inc., The Bank of New York Mellon Corporation, The Charles Schwab Corporation and The Hartford Financial Services Group, Inc. The Committee believes the new peer group provides a better representation of the talent market for the Company’s executives.

Survey Comparison Group

The Compensation Committee also uses a Survey Comparison Groupgrant were as a reference point for individual pay levels for certain executive positions.

This group consists of insurance and general industry companies similar to us in total assets, revenue or number of employees. In 2021, the Compensation Committee reviewed pay data from a published survey conducted by Aon-Hewitt.

Results of the Comparative Market Assessment

For 2021, the Compensation Committee examined the total direct compensation opportunity (base salary, annual cash incentives and long-term incentives) for each named executive officer, as well as each individual element of compensation. Data from the Proxy Comparison Group and Survey Comparison Group were used as a market reference for compensation decisions. The Compensation Committee does not target total compensation to a specific percentile of comparison group compensation.

The comparative market assessment led the Committee to approve increases in the 2022 annual cash incentive targets for named executive officers, other thanfollows: Pat Gallagher from 100%– $7,977,550; Doug Howell – $1,608,331; Tom Gallagher – $1,692,980; Scott Hudson – $1,269,735; and Walt Bay – $1,255,568. For a discussion of salary to 125% of salary, and for Pat Gallagher from 200% to 225% of salary, which we will disclose in our 2023 Proxy Statement.

LOGO

2022 PROXY STATEMENT

33

Compensation Committee Report

The Compensation Committee oversees the company’s compensation program for named executive officers on behalf of the Board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth above.

BasedPSUs, see page 26. For additional information on the review and discussion referredvaluation assumptions with respect to above, the Compensation Committee recommendedstock grants, refer to the Board that the Compensation Discussion and Analysis be includedNote 12 to our consolidated financial statements in the company’s 2022 Proxy Statement and incorporated by reference in its 2021 Annual Report on Form 10-K for the year ended December 31, 2023.

(2)
This column represents the full grant date fair value of stock option awards granted during each fiscal year. The amounts reported in this column have been calculated in accordance with FASB ASC Topic 718. In accordance with SEC rules, any estimate for forfeiture is excluded from, and does not reduce, such amounts. For additional information on the valuation assumptions with respect to option grants, refer to Note 10 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2023.
(3)
This column represents annual performance-based cash incentive awards related to services rendered in 2021, 2022 and 2023. Awards are reported for the year in which it filesthey are earned, regardless of the year in which they are paid. The 2021, 2022 and 2023 awards were paid fully in cash in April of 2022 and 2023 and expected to be paid April of 2024, respectively.
(4)
The amounts set forth for 2021 represent one-time cash bonuses awarded to Doug Howell, Tom Gallagher and Walt Bay in connection with their contributions to completing the SEC.

Wills Re acquisition. These amounts were paid out in April of 2022.
(5)
The amounts shown in this column represent the aggregate change in actuarial present value of each named executive officer’s benefits under our pension plan, except where such change is a negative value. When that is the case, SEC rules require that a zero be included in this table. In 2023, such figures were all positive. Scott Hudson and Walt Bay do not have any accrued benefits under our pension plan.

COMPENSATION COMMITTEE

Sherry S. Barrat (Chair)

David S. Johnson

Kay W. McCurdy

34

2024 PROXY STATEMENT

2022 PROXY STATEMENT

Executive Compensation Tables

2021 Summary Compensation Table

   Name and
   Principal Position		 Year  

Salary

($)

  

Stock

Awards

($) (1)

  

Option

Awards

($) (2)

  

Non-Equity

Incentive Plan

Compensation

($) (3)

  Bonus (4)  

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

($) (5)

  

All Other

Compensation

($) (6)

  

Total

($)

         

Pat Gallagher

Chairman, President and Chief Executive Officer

  2021   1,300,000   3,692,473   1,799,676   5,200,000   —   19,063   1,871,043  13,882,255  
  2020   1,250,000   2,953,046   684,815   4,375,000   —   98,106   1,816,494  11,177,460  
  2019   1,250,000   2,103,166   471,776   3,750,000   —   120,475   1,265,199  8,960,616  
         

Doug Howell

Chief Financial Officer

  2021   950,000   749,494   730,976   1,900,000   500,000   191   770,200  5,600,861  
  2020   900,000   983,200   171,129   1,575,000   —   3,566   716,222  4,349,117  
  2019   900,000   897,377   151,011   1,800,000   —   3,849   671,219  4,423,456  
         

Tom Gallagher

President – Global P/C Brokerage

  2021   1,000,000   789,143   769,085   2,000,000   1,000,000   —   935,000  6,493,228  
  2020   900,000   674,711   313,087   1,575,000   —   79,381   657,787  4,199,945  
  2019   900,000   672,536   302,022   1,800,000   —   96,662   549,991  4,321,211  
         

Scott Hudson

President – Risk Management

  2021   700,000   552,528   538,325   1,400,000   —   —   612,805  3,803,658  
  2020   700,000   524,775   243,456   1,225,000   —   —   557,382  3,250,593  
  2019   700,000   523,304   234,549   1,225,000   —   —   526,225  3,209,078  
         

Walt Bay

General Counsel and Secretary

  2021   725,000   587,701   572,810   1,450,000   500,000   —   583,357  4,418,868  
  2020   675,000   616,115   176,124   1,181,250   —   —   528,205  3,176,694  
  2019   675,000   614,833   169,754   1,350,000   —   —   478,840  3,288,427  

(1)

This column includes the full grant date fair value of PSUs and restricted stock units granted during each fiscal year. The amounts reported in this column have been calculated in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. The amounts reported in this column for PSUs granted during each fiscal year represent the value of each award at the grant date based upon the probable outcome of the performance conditions under the program, determined in accordance with FASB ASC Topic 718. In accordance with SEC rules, any estimate for forfeitures is excluded from, and does not reduce, such amounts. Maximum payouts for the PSU awards as of the date of grant were as follows: Pat Gallagher – $7,384,946; Doug Howell – $1,498,988; Tom Gallagher – $1,578,286; Scott Hudson – $1,105,056; and Walt Bay – $1,175,402. For a discussion of PSUs, see page 28. For additional information on the valuation assumptions with respect to stock grants, refer to Note 12 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2021.33

(2)

Executive Compensation Tables

This column represents the full grant date fair value of stock option awards granted during each fiscal year. The amounts reported in this column have been calculated in accordance with FASB ASC Topic 718. In accordance with SEC rules, any estimate for forfeiture is excluded from, and does not reduce, such amounts. For additional information on the valuation assumptions with respect to option grants, refer to Note 10 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2021.

(3)

This column represents annual performance-based cash incentive awards related to services rendered in 2019, 2020 and 2021. Awards are reported for the year in which they are earned, regardless of the year in which they are paid. These awards were paid fully in cash in March of 2020, April of 2021 and expected to be paid April of 2022, respectively.

(6)
For 2023, includes the following:

(4)

The amounts set forth for 2021 represent one-time cash bonuses awarded to Doug Howell, Tom Gallagher and Walt Bay in connection with their contributions to completing the Wills Re acquisition. These amounts are expected to be paid out in April of 2022.

 

 

 

 

 

 

 

 

 

Named
Executive
Officer

DEPP
Awards*
($)

SS&T
Plan Match**
($)

401(k)
Match***
($)

Corporate
Auto &
Insurance
($)

Financial
Advisory
Services
($)

Non U.S Tax
Reimbursement
($)(1)

Private
Aircraft****
($)

Other*****
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

 

 

2,250,000

 

 

 

 

341,000

 

 

 

 

16,500

 

 

 

 

8,664

 

 

 

 

—

 

 

 

 

—

 

 

 

 

186,448

 

 

 

 

129,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug Howell

 

 

900,000

 

 

 

 

149,750

 

 

 

 

16,500

 

 

 

 

8,664

 

 

 

 

17,555

 

 

 

 

—

 

 

 

 

57,895

 

 

 

 

26,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom Gallagher

 

 

900,000

 

 

 

 

158,500

 

 

 

 

16,500

 

 

 

 

5,064

 

 

 

 

—

 

 

 

 

507,361

 

 

 

 

84,112

 

 

 

 

54,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott Hudson

 

 

750,000

 

 

 

 

114,750

 

 

 

 

16,500

 

 

 

 

—

 

 

 

 

17,555

 

 

 

 

—

 

 

 

 

5,356

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt Bay

 

 

675,000

 

 

 

 

110,375

 

 

 

 

16,500

 

 

 

 

8,664

 

 

 

 

17,555

 

 

 

 

—

 

 

 

 

24,618

 

 

 

 

17,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

The amounts shown in this column represent the aggregate change in actuarial present value of each named executive officer’s benefits under our pension plan, except where such change is a negative value. When that is the case, SEC rules require that a zero be included in this table. In 2021, such figure was: Tom Gallagher – $(313). Scott Hudson and Walt Bay do not have any accrued benefits under our pension plan.

(1)
The amount reported in this column represents non-U.S. tax reimbursements related to an expatriate assignment that ended in 2016.

LOGO

2022 PROXY STATEMENT

35

EXECUTIVE COMPENSATION TABLES

(6)

For 2021, includes the following:

Named Executive

    Officer

 

DEPP

Awards*

($)

  

Supplemental

Plan Match**

($)

  

401(k)

Match***

($)

  

Corporate

Auto &

Insurance

($)

  

Financial

Advisory

Services

($)

  

Non U.S Tax
Reimbursement

($)

  

Chartered

Aircraft****

($)

  

Club

Memberships

Not

Exclusively

For Business

Use, Cell
Phone

Allowance,

Corporate

Event Tickets,
Employee
Commission
Return

($)

 
        

Pat Gallagher

  1,500,000   269,250       14,500   8,664   —   —   37,817   40,812     
        

Doug Howell

  600,000   111,750       14,500   8,664   16,555   —   —   18,731     
        

Tom Gallagher

  600,000   114,250       14,500   5,064   —   156,546   38,487   6,153     
        

Scott Hudson

  500,000   81,750       14,500   —   16,555   —   —   —     
        

Walt Bay

  450,000   80,813       14,500   8,664   16,555   —   —   12,825     

*Deferred Equity Participation Plan (DEPP)

Deferred cash awards under the DEPP are nonqualified deferred compensation awards under Section 409A of the Internal Revenue Code. Each named executive officer has made an irrevocable election to have such awards deemed invested in a fund representing shares of our common stock. Awards under the DEPP do not vest until participants reach age 62 (or the one-year anniversary of the date of grant for participants over the age of 61, which applies to Pat Gallagher, Doug Howell, Tom Gallagher and Tom Gallagher)Scott Hudson). Accordingly, amounts in the plan are subject to forfeiture in the event of a voluntary termination of employment prior to age 62 (or the minimum one-year vesting period). Awards deemed invested in our common stock provide an incentive for our named executive officers to manage our company for earnings growth and total shareholder return. In addition, the deferred realization of these awards encourages retention of our named executive officers until a normal retirement age, and for one-year increments after such age.

**Supplemental Savings and Thrift Plan (Supplemental(SS&T Plan) Match

The SupplementalSS&T Plan allows certain highly compensated employees (those with compensation greater than an amount set annually by the IRS)Internal Revenue Service (IRS) to defer up to 80% of their base salary and annual cash incentive payment. We match any deferrals of salary and annual cash incentive payments on a dollar-for-dollar basis up to the lesser of (i) the amount deferred or (ii) 5% of the employee’s regular earnings minus the maximum contribution that we could have matched under the 401(k) Plan. All such cash deferrals and match amounts may be deemed invested, at the employee’s election, in a number of investment options that include various mutual funds, an annuity product and a fund representing our common stock. Such employees may also defer restricted stock units and PSUs, but these deferrals are not subject to company matching. Amounts held in the SupplementalSS&T Plan accounts are payable as of the employee’s termination of employment, or at such other time as the employee elects in advance of the deferral, subject to certain exceptions set forth in IRS regulations.

***401(k) Match

Under our 401(k) Savings and Thrift Plan (401(k) Plan), a tax qualified retirement savings plan, participating employees, including our named executive officers, may contribute up to 75% of their earnings on a before-tax or after-tax basis into their 401(k) Plan accounts, subject to limitations imposed by the Internal Revenue Service (IRS).IRS. For fiscal 2021,year 2023, we matched an amount equal to one dollar for every dollar an employee contributed on the first 5% of his or her regular earnings, subject to standard IRS compensation limits. The 401(k) Plan has other standard terms and conditions.

****CharteredPrivate Aircraft

Amounts in this column represent the incremental cost to the company of personal use of aircraft chartered by the company.private aircraft. See page 2826 for additional information. The incremental cost of aircraft chartered by the company is calculated as the actual cost billed to the company for the applicable chartered flight. The incremental cost of personal use of company aircraft is calculated using the hourly incremental variable cost for flight services, including fuel costs, crew trip expenses and landing and parking fees. Fixed costs that do not change based on usage, such as pilot salaries, amortized costs of the company aircraft and maintenance costs not related to trips, are excluded. Where more than one executive officer was on the same flight, the cost was allocated proportionally between them. The imputed income attributable to such flights was taxable income and the associated taxes were not reimbursed or paid by the company.

*****Other

Amounts in this column include club memberships not exclusively for business use, cell phone allowance, corporate event tickets, and for Pat Gallagher and Tom Gallagher $25,891 relating to travel in connection with a one-time retirement event for certain recent retirees in recognition of their contributions to the company.

36

34

img134299666_7.jpg 

2022 PROXY STATEMENT

Executive Compensation Tables

EXECUTIVE COMPENSATION TABLES

20212023 Grants of Plan-Based Awards

Name

 Plan  Grant
Date		  

 

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards

  

 

   Estimated Future Payouts
Under Equity
Incentive Plan Awards

  

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units

(#)

 

  

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

 

  

   Exercise   
or Base
Price of
Option
Awards
($/sh)

 

  

Grant
Date Fair
Value of
   Stock and   
Option
Awards
($)

 

 

Threshold 
($)

 

Target

($)

  

Maximum
($)

  

Threshold
(#)

  

Target
(#)

  

Maximum
(#)

 
            

Pat Gallagher

  LTIP(1)     3/16/21    —    —     —     —     —     —     —   76,975     127.90    1,799,676  
            
   LTIP(2)     3/16/21    —    —     —     14,435     28,870     57,740     —   —     —    3,692,473  
            
   ANNUAL(3)     N/A    N/A    2,600,000     5,200,000     —     —     —     —   —     —    N/A  
            

Doug Howell

  LTIP(1)     3/16/21    —    —     —     —     —     —     —   31,265     127.90    730,976  
            
   LTIP(2)     3/16/21    —    —     —     2,930     5,860     11,720     —   —     —    749,494  
            
   ANNUAL(3)     N/A    N/A    950,000     1,900,000     —     —     —     —   —     —    N/A  
            

Tom Gallagher

  LTIP(1)     3/16/21    —    —     —     —     —     —     —   32,895     127.90    769,085  
            
   LTIP(2)     3/16/21    —    —     —     3,085     6,170     12,340     —   —     —    789,143  
            
   ANNUAL(3)     N/A    N/A    1,000,000     2,000,000     —     —     —     —   —     —    N/A  
            

Scott Hudson

  LTIP(1)     3/16/21    —    —     —     —     —     —     —   23,025     127.90    538,325  
            
   LTIP(2)     3/16/21    —    —     —     2,160     4,320     8,640     —   —     —    552,528  
            
   ANNUAL(3)     N/A    N/A    700,000     1,400,000     —     —     —     —   —     —    N/A  
            

Walt Bay

  LTIP(1)     3/16/21    —    —     —     —     —     —     —   24,500     127.90    572,810  
            
   LTIP(2)     3/16/21    —    —     —     2,298     4,595     9,190     —   —     —    587,701  
            
  ANNUAL(3)     N/A    N/A    725,000     1,450,000     —     —     —     —   —     —    N/A  

 

 

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards

 

Estimated Future Payouts
Under Equity
Incentive Plan Awards

 

All Other
Stock
Awards:
Number of
Shares of

 

All Other
Option
Awards:
Number of
Securities

 

Exercise
or Base
Price of
Option

 

Grant Date
Fair Value
of Stock

 

Name

Plan

Grant
Date

Threshold
($)

 

Target
($)

 

Maximum
($)

 

Threshold
(#)

 

Target
(#)

 

Maximum
(#)

 

Stock or
Units (#)

 

Underlying
Options (#)

 

Awards
($/sh)

 

and Option
Awards ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pat

LTIP(1)

3/15/23

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

30,029

 

177.09

 

 

1,388,841

 

Gallagher

LTIP(2)

3/15/23

 

—

 

 

—

 

 

—

 

 

11,262

 

 

22,524

 

 

45,048

 

 

—

 

 

—

 

 

—

 

 

3,988,775

 

ANNUAL(3)

N/A

N/A

 

 

2,925,000

 

 

5,850,000

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug

LTIP(1)

3/15/23

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

12,107

 

 

177.09

 

 

559,949

 

Howell

LTIP(2)

3/15/23

 

—

 

 

—

 

 

—

 

 

2,271

 

 

4,541

 

 

9,082

 

 

—

 

 

—

 

 

—

 

 

804,166

 

ANNUAL(3)

N/A

N/A

 

 

1,187,500

 

 

2,375,000

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom

LTIP(1)

3/15/23

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

12,744

 

 

177.09

 

 

589,410

 

Gallagher

LTIP(2)

3/15/23

 

—

 

 

—

 

 

—

 

 

2,390

 

 

4,780

 

 

9,560

 

 

—

 

 

—

 

 

—

 

 

846,490

 

ANNUAL(3)

N/A

N/A

 

 

1,250,000

 

 

2,500,000

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott

LTIP(1)

3/15/23

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

9,558

 

 

177.09

 

 

442,058

 

Hudson

LTIP(2)

3/15/23

 

—

 

 

—

 

 

—

 

 

1,793

 

 

3,585

 

 

7,170

 

 

—

 

 

—

 

 

—

 

 

634,868

 

ANNUAL(3)

N/A

N/A

 

 

937,500

 

 

1,875,000

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt

LTIP(1)

3/15/23

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

9,452

 

 

177.09

 

 

437,155

 

Bay

LTIP(2)

3/15/23

 

—

 

 

—

 

 

—

 

 

1,773

 

 

3,545

 

 

7,090

 

 

—

 

 

—

 

 

—

 

 

627,784

 

 

ANNUAL(3)

N/A

N/A

 

 

906,250

 

 

1,812,500

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Stock options under our 2017

(1)
Stock options under our 2022 Long-Term Incentive Plan, vesting one-third on each of the third, fourth and fifth anniversaries of the grant date.
(2)
The amounts represent the range of possible shares issuable to each named executive officer on the third anniversary of the grant date related to PSUs under our 2022 Long-Term Incentive Plan. See page 26.
(3)
The amounts in this line represent the range of possible annual cash incentive award the named executive officer was eligible to receive in April 2024, related to 2023 performance under our annual cash incentive program. The amounts were subject to performance criteria and subject to the Compensation Committee’s downward discretion. The amounts actually paid to each named executive officer are reported in the “Non-Equity Incentive Plan Compensation” column of the 2023 Summary Compensation Table and footnote (3) thereto.

2024 PROXY STATEMENT

35

(2)

Executive Compensation Tables

The amounts represent the range of possible shares issuable to each named executive officer on the third anniversary of the grant date related to performance share units under our 2017 Long-Term Incentive Plan. See page 28.

(3)

The amounts in this line represent the range of possible annual cash incentive award the named executive officer was eligible to receive in April 2022, related to 2021 performance under our annual cash incentive program. The amounts were subject to performance criteria and subject to the Compensation Committee’s downward discretion. The amounts actually paid to each named executive officer are reported in the “Non-Equity Incentive Plan Compensation” column of the 2021 Summary Compensation Table and footnote (3) thereto.

LOGO

2022 PROXY STATEMENT

37

EXECUTIVE COMPENSATION TABLES

Outstanding Equity Awards at 20212023 Fiscal Year-End

 

 

 

 

Option Awards(1)

Stock Awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Option Awards (1)

 

  

Stock Awards

 

 

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)

Option
Exercise
Price
($)

Option
Expiration
Date

Number of
Shares or Units
of Stock That
Have Not
Vested(2)
(#)

Market Value of
Shares or Units
of Stock That
Have Not
Vested(3)
($)

Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested(4)
(#)

Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested(5)
($)

Number of

Securities

Underlying

Unexercised

Options (#)

 

Exercisable

  

Number of

Securities

Underlying

Unexercised

Options (#)

 

Unexercisable

  

Option

Exercise

Price ($)

  

Option

Expiration

Date

  

Number

of Shares or

Units of Stock

That Have Not

Vested (2) (#)

  

Market Value
of Shares or

Units of Stock

That Have Not

Vested (3)  ($)

  

Equity

Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or  Other
Rights
That
Have Not
Vested (4)
(#)

 

 

  

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested (5)
($)

 

 
 

Pat Gallagher

  51,000   0   46.17   3/11/22   —     —     —     —   
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  62,900   0   43.71   3/17/23   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  38,867   19,433   56.86   3/16/24   —     —     —     —   

 

 

58,300

 

 

 

—

 

 

 

56.86

 

 

3/16/24

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

41,400

 

 

 

—

 

 

 

70.74

 

 

3/15/25

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  13,801   27,599   70.74   3/15/25   —     —     —     —   

 

 

29,367

 

 

 

14,683

 

 

 

79.59

 

 

3/14/26

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Pat Gallagher

 

 

22,851

 

 

 

45,699

 

 

 

86.17

 

 

3/12/27

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

76,975

 

 

 

127.90

 

 

3/16/28

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   44,050   79.59   3/14/26   —     —     —     —   

 

 

—

 

 

 

35,825

 

 

 

158.56

 

 

3/15/29

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

30,029

 

 

 

177.09

 

 

3/15/30

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   68,550   86.17   3/12/27   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

56,008

 

 

 

12,595,034

 

 

 

90,148

 

 

 

20,272,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  0   76,975   127.90   3/16/28   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,900

 

 

 

—

 

 

 

70.74

 

 

3/15/25

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

                      52,850   8,967,060   126,280   21,425,928 

 

 

9,401

 

 

 

4,699

 

 

 

79.59

 

 

3/14/26

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

5,711

 

 

 

11,419

 

 

 

86.17

 

 

3/12/27

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Doug Howell

  19,100   0   46.17   3/11/22   —     —     —     —   

 

 

—

 

 

 

31,265

 

 

 

127.90

 

 

3/16/28

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

14,545

 

 

 

158.56

 

 

3/15/29

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  26,700   0   43.71   3/17/23   —     —     —     —   

 

 

—

 

 

 

12,107

 

 

 

177.09

 

 

3/15/30

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,043

 

 

 

3,832,720

 

 

 

18,242

 

 

 

4,102,261

 

 

  13,201   6,599   56.86   3/16/24   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  4,967   9,933   70.74   3/15/25   —     —     —     —   

 

 

37,300

 

 

 

—

 

 

 

56.86

 

 

3/16/24

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

29,800

 

 

 

—

 

 

 

70.74

 

 

3/15/25

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   14,100   79.59   3/14/26   —     —     —     —   

 

 

18,801

 

 

 

9,399

 

 

 

79.59

 

 

3/14/26

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 
  0   17,130   86.17   3/12/27   —     —     —     —   
 
  0   31,265   127.90   3/16/28   —     —     —     —   
 
                      29,525   5,009,507   28,840   4,893,283 
 

Tom Gallagher

  26,800   0   46.17   3/11/22   —     —     —     —   

 

 

10,447

 

 

 

20,893

 

 

 

86.17

 

 

3/12/27

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 
  35,400   0   43.71   3/17/23   —     —     —     —   
 
  24,867   12,433   56.86   3/16/24   —     —     —     —   
 
  9,934   19,866   70.74   3/15/25   —     —     —     —   
 

 

 

—

 

 

 

32,895

 

 

 

127.90

 

 

3/16/28

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   28,200   79.59   3/14/26   —     —     —     —   

 

 

—

 

 

 

15,310

 

 

 

158.56

 

 

3/15/29

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

12,744

 

 

 

177.09

 

 

3/15/30

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   31,340   86.17   3/12/27   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

11,970

 

 

 

2,691,769

 

 

 

19,200

 

 

 

4,317,696

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  0   32,895   127.90   3/16/28   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,300

 

 

 

—

 

 

 

56.86

 

 

3/16/24

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

                      16,900   2,867,423   28,000   4,750,760 

 

 

23,200

 

 

 

—

 

 

 

70.74

 

 

3/15/25

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

14,601

 

 

 

7,299

 

 

 

79.59

 

 

3/14/26

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Scott Hudson

  42,600   0   46.17   3/11/22   —     —     —     —   

 

 

8,124

 

 

 

16,246

 

 

 

86.17

 

 

3/12/27

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

23,025

 

 

 

127.90

 

 

3/16/28

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  30,700   0   43.71   3/17/23   —     —     —     —   

 

 

—

 

 

 

11,480

 

 

 

158.56

 

 

3/15/29

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

9,558

 

 

 

177.09

 

 

3/15/30

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  20,201   10,099   56.86   3/16/24   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

8,381

 

 

 

1,884,674

 

 

 

14,400

 

 

 

3,238,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  7,734   15,466   70.74   3/15/25   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,800

 

 

 

—

 

 

 

70.74

 

 

3/15/25

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   21,900   79.59   3/14/26   —     —     —     —   

 

 

10,567

 

 

 

5,283

 

 

 

79.59

 

 

3/14/26

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

5,877

 

 

 

11,753

 

 

 

86.17

 

 

3/12/27

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Walt Bay

 

 

—

 

 

 

24,500

 

 

 

127.90

 

 

3/16/28

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   24,370   86.17   3/12/27   —     —     —     —   

 

 

—

 

 

 

11,405

 

 

 

158.56

 

 

3/15/29

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

 

 

9,452

 

 

 

177.09

 

 

3/15/30

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

  0   23,025   127.90   3/16/28   —     —     —     —   

 

 

 

 

 

 

 

 

 

 

 

 

 

14,664

 

 

 

3,297,708

 

 

 

14,270

 

 

 

3,209,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                      13,150   2,231,161   20,820   3,532,529 

(1)
Stock options vest or vested in accordance with the following vesting schedules:

38

Expiration Date

2022 PROXY STATEMENT

EXECUTIVE COMPENSATION TABLES

 

Name

 

Option Awards (1)

 

  

Stock Awards

 

 
 

Number of

Securities

Underlying

Unexercised

Options (#)

 

Exercisable

  

Number of

Securities

Underlying

Unexercised

Options (#)

 

Unexercisable

  

Option

Exercise

Price ($)

  

Option

Expiration

Date

  

Number

of Shares or

Units of Stock

That Have Not

Vested (2) (#)

  

Market Value
of Shares or

Units of Stock

That Have Not

Vested (3)  ($)

  

Equity

Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or  Other
Rights
That
Have Not
Vested (4)
(#)

 

 

  

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested (5)
($)

 

 
        

Walt Bay

  17,700   0   43.71   3/17/23   —     —     —     —   
        
  14,534   7,266   56.86   3/16/24   —     —     —     —   
        
  5,601   11,199   70.74   3/15/25   —     —     —     —   
        
  0   15,850   79.59   3/14/26   —     —     —     —   
        
  0   17,630   86.17   3/12/27   —     —     —     —   
        
  0   24,500   127.90   3/16/28   —     —     —     —   
        
                      22,750   3,859,993   18,990   3,222,033 

(1)

Stock options vest or vested in accordance with the following vesting schedules:

Expiration Date

One-third vests on each of:

3/11/2216/24

March 11, 2018, March 11, 2019 and March 11, 2020

3/17/23

March 17, 2019, March 17, 2020 and March 17, 2021

3/16/24

March 16, 2020, March 16, 2021 and March 16, 2022

3/15/25

March 15, 2021, March 15, 2022 and March 15, 2023

3/14/26

March 14, 2022, March 14, 2023 and March 14, 2024

3/12/27

March 12, 2023, March 12, 2024 and March 12, 2025

3/16/28

March 16, 2024, March 16, 2025 and March 16, 2026

(2)

3/15/29

The following table provides information with respect to the vesting of each named executive officer’s unvested restricted stock units

March 15, 2025, March 15, 2026 and earned performance share units as of December 31, 2021:March 15, 2027

3/15/30

March 15, 2026, March 15, 2027 and March 15, 2028

Vesting Date

 Type of award Pat
Gallagher		 Doug
Howell		  Tom
Gallagher		 Scott
Hudson		 Walt
Bay
      

3/16/22

   Restricted Stock Units*         —      3,700             —           —     4,550  
      

3/15/23

   Restricted Stock Units*         —      3,250             —           —     4,000  
      

3/14/24

   Restricted Stock Units*         —      2,825             —           —     3,500  
      

3/12/25

   Restricted Stock Units*         —      2,850             —           —     2,250  
      

3/16/22

   Performance Share Units** 52,850      16,900     16,900   13,150     8,450  
      

Total

  52,850    29,525     16,900   13,150   22,750  

*

36

Granted in 2017, 2018, 2019 and 2020 (vesting five years from the date of grant).img134299666_7.jpg 

**

Granted in 2019; 200% of award earned based on our 2019-2021 performance.

Executive Compensation Tables

LOGO

2022 PROXY STATEMENT

39

(2)
The following table provides information with respect to the vesting of each named executive officer’s unvested RSUs and earned PSUs as of December 31, 2023:


Vesting Date

 

Type of award

Pat
Gallagher

Doug
Howell

Tom
Gallagher

Scott
Hudson

Walt
Bay

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/14/24

 

Restricted Stock Units*

 

 

—

 

 

 

 

2,825

 

 

 

 

—

 

 

 

 

—

 

 

 

 

3,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/12/25

 

Restricted Stock Units*

 

 

—

 

 

 

 

2,850

 

 

 

 

—

 

 

 

 

—

 

 

 

 

2,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/16/24

 

Performance Share Units**

 

 

56,008

 

 

 

 

11,368

 

 

 

 

11,970

 

 

 

 

8,381

 

 

 

 

8,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

56,008

 

 

 

 

17,043

 

 

 

 

11,970

 

 

 

 

8,381

 

 

 

 

14,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE COMPENSATION TABLES* Granted in 2019 and 2020 (vesting five years from the date of grant).

** Granted in 2021, 200% of award earned based on our 2021-2023 performance.

(3)
The amounts in this column are based on a closing stock price of $224.88 for our common stock on December 31, 2023.
(4)
The following table provides information with respect to the vesting of each named executive officer’s unearned unvested PSUs as of December 31, 2023:


Vesting Date

 

Type of award

Pat
Gallagher

Doug
Howell

Tom
Gallagher

Scott
Hudson

Walt
Bay

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/15/25

 

Performance Share Units*

 

 

45,100

 

 

 

 

9,160

 

 

 

 

9,640

 

 

 

 

7,230

 

 

 

 

7,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/15/26

 

Performance Share Units**

 

 

45,048

 

 

 

 

9,082

 

 

 

 

9,560

 

 

 

 

7,170

 

 

 

 

7,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

90,148

 

 

 

 

18,242

 

 

 

 

19,200

 

 

 

 

14,400

 

 

 

 

14,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Granted in 2022, to be earned on the basis of 2022-2024 performance. The amounts reported represent maximum payouts (200% of target awards) based on 2022-2023 performance. See page 26 for more information.

(3)

The amounts in this column are based on a closing stock price of $169.67 for our common stock on December 31, 2021.

(4)

The following table provides information with respect to the vesting of each named executive officer’s unearned unvested performance share units as of December 31, 2021:

** Granted in 2023, to be earned on the basis of 2023-2025 performance. The amounts reported represent maximum payouts (200% of target awards) based on 2023 performance. See page 26 for more information.

Vesting Date

 Type of award Pat
Gallagher		  Doug
Howell		  Tom
Gallagher		  Scott
Hudson		  Walt
Bay		 

 

3/12/23

 

 

 

Performance Share Units*

 

 

 

 

 

 

68,540   

 

 

 

 

 

 

 

 

17,120

 

 

 

 

 

 

 

 

 

15,660   

 

 

 

 

 

 

 

 

12,180   

 

 

 

 

 

 

 

 

9,800

 

 

 

 

 

3/16/24

 

 

 

Performance Share Units**

 

 

 

 

 

 

57,740   

 

 

 

  

 

11,720

 

 

 

  

 

12,340   

 

 

 

 

 

 

 

8,640   

 

 

 

 

 

 

 

 

9,190

 

 

 

 

 

Total

 

  

 

 

 

 

126,280   

 

 

 

 

 

 

 

 

28,840

 

 

 

 

 

 

 

 

 

28,000   

 

 

 

 

 

 

 

 

20,820   

 

 

 

 

 

 

 

 

18,990

 

 

 

 

(5)
The amounts in this column are based on a closing stock price of $224.88 for our common stock on December 31, 2023.

*

Granted in 2020, to be earned on the basis of 2020-2022 performance. The amounts reported represent maximum payouts (200% of target awards) based on 2020-2021 performance. See page 28 for more information.

**

Granted in 2021, to be earned on the basis of 2021-2023 performance. The amounts reported represent maximum payouts (200% of target awards) based on 2021 performance. See page 28 for more information.

(5)

The amounts in this column are based on a closing stock price of $169.67 for our common stock on December 31, 2021.

20212023 Option Exercises and Stock Vested

 Option Awards  Stock Awards 
 

Option Awards

Stock Awards

Name

 

Number of

Shares

Acquired

on Exercise

(#)

  

Value

Realized on

Exercise

($)

  

Number of

Shares

Acquired on

Vesting

(#) (1) (2)

  

Value

Realized on

Vesting

($) (1)

 

Number of
Shares
Acquired
on Exercise
(#)

Value
Realized on
Exercise
($)

Number of
Shares
Acquired
on
Vesting
(#)(1)(2)

Value
Realized on
Vesting
($)(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

  —   —   53,800   7,009,620 

 

 

62,900

 

 

 

 

9,429,968

 

 

 

 

68,540

 

 

 

12,677,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug Howell

  1,200   93,336   24,750   1,263,816 

 

 

16,800

 

 

 

 

3,013,367

 

 

 

 

20,370

 

 

 

1,576,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom Gallagher

  27,700   2,050,631   19,400   2,527,632 

 

 

25,400

 

 

 

 

3,676,904

 

 

 

 

15,660

 

 

 

2,896,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott Hudson

  16,650   1,660,021   15,100   1,967,384 

 

 

18,700

 

 

 

 

2,747,883

 

 

 

 

12,180

 

 

 

2,252,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt Bay

  —   —   15,050   1,977,846 

 

 

21,800

 

 

 

 

3,818,074

 

 

 

 

13,800

 

 

 

2,535,578

 

 

 

 

 

 

 

 

 

 

 

(1)

These columns reflect the vesting of restricted stock units and performance share units, as applicable. Restricted stock units awarded on March 17, 2016 vested on March 17, 2021 with value realized of $128.43 per share plus accrued cash dividend equivalents. Performance share units awarded on March 15, 2018 were earned at 200% on the basis of 2018-2020 performance and vested on March 15, 2021 with value realized of $127.21

(1)
These columns reflect the vesting of RSUs and PSUs, as applicable. RSUs awarded on March 15, 2018 vested on March 15, 2023 with value realized of $177.09 per share plus accrued cash dividend equivalents. PSUs awarded on March 12, 2020 were earned at 200% on the basis of 2020-2022 performance and vested on March 12, 2023 with value realized of $182.76 per share plus accrued cash dividend equivalents.
(2)
Pursuant to the terms of the SS&T Plan (see page 34), Doug Howell deferred receipt of his RSUs vesting in 2023 and half of his PSUs vesting in 2023. He elected lump-sum distributions of the deferred RSUs in July 2028 and the deferred PSUs in July 2024.

2024 PROXY STATEMENT

37

(2)

Executive Compensation Tables

Pursuant to the terms of the Supplemental Plan (see page 36), Doug Howell deferred receipt of half of his performance share units vesting in 2021. He elected a lump-sum distribution in July 2023.

2021

2023 Pension Benefits

Name

 Plan Name  

Number
of

    Years of    

Credited

Service

(#) (1)

  

Present

Value of

Accumulated

Benefit ($)

 
   

Pat Gallagher

  Arthur J. Gallagher & Co. Employees’ Pension Plan          25          1,017,698     
   

Doug Howell

  Arthur J. Gallagher & Co. Employees’ Pension Plan           1          31,528     
   

Tom Gallagher

  Arthur J. Gallagher & Co. Employees’ Pension Plan           25          648,646     
   

Scott Hudson

  Arthur J. Gallagher & Co. Employees’ Pension Plan           —          —     
   

Walt Bay

  Arthur J. Gallagher & Co. Employees’ Pension Plan           —          —     

(1)

The last year of credited service was 2005. Total years of actual service were as follows at December 31, 2021: Pat Gallagher - 47; Doug Howell - 18; Tom Gallagher - 41; Scott Hudson - 11; and Walt Bay - 14.

40

2022 PROXY STATEMENT

No payments were made under our defined benefit plans during 2023.

Name

 

Plan Name

Number of
Years of
Credited
Service
(#)(1)

Present
Value of
Accumulated
Benefit
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

 

Arthur J. Gallagher & Co. Employees’ Pension Plan

 

 

25

 

 

 

 

904,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug Howell

 

Arthur J. Gallagher & Co. Employees’ Pension Plan

 

 

1

 

 

 

 

26,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom Gallagher

 

Arthur J. Gallagher & Co. Employees’ Pension Plan

 

 

25

 

 

 

 

525,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott Hudson

 

Arthur J. Gallagher & Co. Employees’ Pension Plan

 

 

—

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt Bay

 

Arthur J. Gallagher & Co. Employees’ Pension Plan

 

 

—

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
The last year of credited service was 2005. Total years of actual service were as follows at December 31, 2023: Pat Gallagher - 49; Doug Howell - 20; Tom Gallagher - 43; Scott Hudson - 13; and Walt Bay - 16.

EXECUTIVE COMPENSATION TABLES

We maintain the Arthur J. Gallagher & Co. Employees’ Pension Plan (the Pension Plan) which is qualified under the Internal Revenue Code and which historically covered substantially all domestic employees. In 2005, we amended the Pension Plan to freeze the accrual of future benefits for all domestic employees effective July 1, 2005. Benefits under the Pension Plan are based upon the employee’s highest average annual earnings for a five calendar-year period with us and are payable after retirement in the form of an annuity or a lump sum. The maximum amount of annual earnings that may be considered in calculating benefits under the Pension Plan is $210,000 (the maximum amount of annual earnings allowable by law in 2005, the last year that benefits accrued under the Pension Plan).

Benefits under the Pension Plan are calculated as an annuity equal to 1% of the participant’s highest annual average earnings multiplied by years of service, and commencing upon the participant’s retirement on or after age 65. The maximum benefit under the pension plan upon retirement would be $53,318 per year, payable at age 65 in accordance with IRS regulations. Participants also may elect to commence their pensions anytime on or after attaining age 55 if they retire prior to age 65, with an actuarial reduction to reflect the earlier commencement date, ranging from 54% at age 55 to no reduction at age 65. All of our named executive officers with accumulated benefits under the plan are eligible to take this early retirement option. Pat Gallagher and Tom Gallagher are eligible for normal age retirement under the Pension Plan. For additional information on the valuation assumptions with respect to pensions, refer to Note 13 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2021.2023.

2021

38

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Executive Compensation Tables

2023 Nonqualified Deferred Compensation

Name

 Plan Name 

Executive

Contributions

in Last Fiscal

Year

($) (1)

  

Registrant

Contributions

in Last Fiscal

Year

($) (2)

  

Aggregate

Earnings

in Last

Fiscal

Year

($) (3)

  

Aggregate

Withdrawals/

Distributions

in Last
Fiscal

Year

($) (4)

  

Aggregate   

Balance at   

Last   

Fiscal   

Year   

End   

($) (4)(5)    

 

Plan Name

Executive
Contributions
in Last Fiscal
Year(1)
($)

Registrant
Contributions
in Last Fiscal
Year(2)
($)

Aggregate
Earnings
in Last
Fiscal
Year(3)
($)

Aggregate
Withdrawals/
Distributions
in Last Fiscal
Year(4)
($)

Aggregate
Balance at
Last Fiscal
Year
End(4)(5)
($)

   

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

 DEPP  —   1,500,000   6,867,792   2,562,752  23,280,178

 

 

 

 

 

 

 

 

 

 

 

Pat Gallagher

 

Supplemental Plan

 

 

 

 

567,500

 

 

 

 

 

 

269,250

 

 

 

 

 

 

3,255,341

 

 

 

 

 

 

—

 

 

 

 

23,437,116

 

DEPP

 

 

—

 

 

 

2,250,000

 

 

 

5,665,597

 

 

 

 

2,070,418

 

 

 

 

31,562,361

 

 

   

 

SS&T Plan

 

 

715,000

 

 

 

341,000

 

 

 

4,098,449

 

 

 

 

—

 

 

 

 

28,193,642

 

 

Doug Howell

 DEPP  —   600,000   8,676,307   —  30,993,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doug Howell

 

Supplemental Plan

 

 

 

 

2,329,306

 

 

 

 

 

 

111,750

 

 

 

 

 

 

11,206,547

 

 

 

 

 

 

—

 

 

 

 

36,118,280

 

DEPP

 

 

—

 

 

 

900,000

 

 

 

6,642,920

 

 

 

 

42,023,978

 

 

 

 

1,096,458

 

 

   

 

SS&T Plan

 

 

2,843,916

 

 

 

149,750

 

 

 

5,391,634

 

 

 

 

—

 

 

 

 

46,800,371

 

 

Tom Gallagher

 DEPP  —   600,000   334,982   854,251  806,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tom Gallagher

 

Supplemental Plan

 

 

 

 

128,750

 

 

 

 

 

 

114,250

 

 

 

 

 

 

442,464

 

 

 

 

 

 

—

 

 

 

 

2,238,947

 

DEPP

 

 

—

 

 

 

900,000

 

 

 

520,275

 

 

 

 

31,135

 

 

 

 

2,977,852

 

 

   

 

SS&T Plan

 

 

175,000

 

 

 

158,500

 

 

 

63,996

 

 

 

 

—

 

 

 

 

2,942,905

 

 

Scott Hudson

 DEPP  —   500,000   3,812,085   —  13,645,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott Hudson

 

Supplemental Plan

 

 

 

 

134,750

 

 

 

 

 

 

81,750

 

 

 

 

 

 

281,325

 

 

 

 

 

 

—

 

 

 

 

1,559,171

 

DEPP

 

 

—

 

 

 

750,000

 

 

 

4,930,824

 

 

 

 

20,713,970

 

 

 

 

913,715

 

 

   

 

SS&T Plan

 

 

206,250

 

 

 

114,750

 

 

 

470,372

 

 

 

 

—

 

 

 

 

2,364,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walt Bay

 DEPP  —   450,000   4,050,848   —  14,490,134

 

DEPP

 

 

—

 

 

 

675,000

 

 

 

3,602,267

 

 

 

 

—

 

 

 

 

21,114,475

 

 

 

Supplemental Plan

 

 

 

 

100,000

 

 

 

 

 

 

80,813

 

 

 

 

 

 

310,904

 

 

 

 

 

 

—

 

 

 

 

3,087,428

 

SS&T Plan

 

 

126,875

 

 

 

110,375

 

 

 

764,979

 

 

 

 

—

 

 

 

 

4,008,238

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amounts in this column include amounts reported in the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns in the 2021 Summary Compensation Table. For Doug Howell, the amount in this column also includes the value of performance share units which vested in 2021 and which he deferred until 2023. For more information regarding such deferred by Doug Howell, see also footnote (2) to the 2021 Option Exercises and Stock Vested table.

(1)
Amounts in this column include amounts reported in the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns in the 2023 Summary Compensation Table.
(2)
These amounts are included in the “All Other Compensation” column of the 2023 Summary Compensation Table.
(3)
Amounts in this column are not included in the 2023 Summary Compensation Table. These amounts represent the change in market value on deferred and matched amounts under the SS&T Plan and on our contributions to the DEPP, based on the market-rate returns and dividend equivalents credited to participant accounts for the period January through December 2023. Participants may direct their SS&T Plan account balances into a number of deemed investment options that include mutual funds, an annuity product and a fund representing our common stock, and may change such deemed investments on any regular business day, subject to our Insider Trading Policy. Awards under the DEPP are credited with returns of deemed investments elected by the participant, including a fund representing our common stock. Each of our named executive officers has elected the fund representing our common stock.
(4)
For Pat Gallagher, this amount includes both an accelerated distribution under the DEPP to cover applicable taxes on vested awards and receipt of a distribution in accordance with prior elections under the DEPP. Doug Howell, Tom Gallagher and Scott Hudson also received an accelerated distribution under the DEPP to cover applicable taxes on a vested award.
(5)
The DEPP amounts include the following amounts also reported as compensation in this and prior years’ Summary Compensation Tables (as applicable): Pat Gallagher - $12,150,000; Doug Howell - $8,200,000; Tom Gallagher - $5,300,000; Scott Hudson - $3,000,000; and Walt Bay - $2,675,000.

(2)

These amounts are included in the “All Other Compensation” column of the 2021 Summary Compensation Table.

(3)

Amounts in this column are not included in the 2021 Summary Compensation Table. These amounts represent the change in market value on deferred and matched amounts under the Supplemental Plan and on our contributions to the DEPP, based on the market-rate returns and dividend equivalents credited to participant accounts for the period January through December 2021. Participants may direct their Supplemental Plan account balances into a number of deemed investment options that include mutual funds, an annuity product and a fund representing our common stock, and may change such deemed investments on any regular business day. Awards under the DEPP are credited with returns of deemed investments elected by the participant, including a fund representing our common stock. Each of our named executive officers has elected the fund representing our common stock.

(4)

For Pat Gallagher and Tom Gallagher, this amount includes both an accelerated distribution under the DEPP to cover applicable taxes on vested awards and receipt of a distribution in accordance with prior elections under the DEPP.

(5)

The DEPP amounts include the following amounts also reported as compensation in this and prior years’ Summary Compensation Tables (as applicable): Pat Gallagher - $8,400,000; Doug Howell - $6,700,000; Tom Gallagher - $3,800,000; Scott Hudson - $1,750,000; and Walt Bay - $1,550,000.

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2022 PROXY STATEMENT

41

EXECUTIVE COMPENSATION TABLES

20212023 Potential Payments upon Termination or Change in Control

Change-in-Control Agreements

We provide our named executive officers with change-in-control agreements, which we believe are an important part of their overall compensation. In addition to helping secure their continued dedication to stockholder interests prior to or following a change in control, the Compensation Committee also believes these agreements are important for recruitment and retention, as all or nearly all of our competitors for talent have similar agreements in place for their senior employees. In general, compensation levels under these agreements are separate and unrelated to named executive officers’ overall compensation decisions for a given year.

Double Trigger

Each named executive officer’s change-in-control agreement provides for payments if there is a “Termination” of the individual within 24 months after a “Change in Control” (commonly referred to in combination as a “double trigger”).

•

A Change in Control occurs (i) if a person or group is or becomes the beneficial owner, directly or indirectly, of our securities representing 50% or more of the voting power to elect directors, (ii) if there is a change in the composition of the Board such that within a period of two consecutive years, individuals who at the beginning of such two-year period constitute the Board and any new directors elected or nominated by at least two-thirds of the directors who were either directors at the beginning of the two-year period or were so elected or nominated, cease for any reason to constitute at least a majority of the Board, or (iii) our stockholders approve the sale of all or substantially all of our assets or any merger, consolidation, issuance of securities or purchase of assets, the result of which would be the occurrence of any event described in (i) or (ii) above. A substantially similar change-in-control definition is used under our equity plans, the DEPP and the SupplementalSS&T Plan, except that our equity plans and the DEPP do not include subsection (iii) above.

•

A Termination means either (i) a termination of employment by us for any reason other than death, physical or mental incapacity or “cause” (defined as gross misconduct or willful and material breach of the change-in-control agreement) or (ii)

2024 PROXY STATEMENT

39

Executive Compensation Tables

resignation upon the occurrence of (1) a material change in the nature or scope of the individual’s authorities, powers, functions or duties, (2) a reduction in total compensation, (3) any relocation of the individual’s principal place of employment more than 35 miles from his or her location prior to the Change in Control, (4) a breach of the change-in-control agreement by us or (5) a good faith determination by the individual that as a result of the Change in Control, his or her position is materially affected.

Payments upon Double Trigger

Under the change-in-control agreements, each named executive officer subject to a Termination within 24 months after a Change in Control is entitled to receive:

•

Severance – two-times salary, bonus and annual cash incentive. A lump sum severance payment equal to salary, bonus and annual cash incentive compensation payments for a 24-month period on the basis of a salary rate not less than his annual salary prior to the termination, or if greater, the salary at the time of the Change in Control and the bonus and annual cash incentive payment prior to termination or, if greater, the bonus and annual cash incentive payment prior to the Change in Control. The severance payment would be made in a lump sum not more than seven days after the date of termination.

•

No new excise tax gross-up payments. Our change-in-control agreements entered into prior to 2008 provide that the named executive officer would be eligible to receive an excise tax “gross-up”“gross-up” payment as defined in Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, relating to so-called “excess parachute payments.” However, our change-in-control agreements entered into after 2008 do not contain excise tax gross-ups, and it is our policy not to enter into new change-in-control agreements that contain excise tax gross-ups, or amend existing change-in-control agreements without removing these provisions.

•

Participation in benefit plans. The change-in-control agreements also provide for continued participation in welfare benefit plans, including medical, dental, life and disability insurance, on the same basis and at the same cost as prior to the Termination, for the shorter of a two-year period or until the individual becomes covered by a different plan with coverage or benefits equal to or greater than the plan provided by us. The agreements also provide for the payment of any unpaid salary and a lump sum cash payment for accumulated but unused vacation.

Other Termination and Change-in-Control Payments

The table below shows potential incremental payments, benefits and equity award accelerations upon termination of our named executive officers. The amounts are determined under existing agreements and plans for various termination scenarios. The amounts assume that the trigger events for all such payments occurred on December 31, 20212023 and use the closing price of our common stock on that date of $169.67.$224.88. The amounts in the table below do not include the amount of pension or deferred compensation our named executive officers would receive under each termination scenario. Instead, these amounts are reflected in the 20212023 Pension Benefits and 20212023 Nonqualified Deferred Compensation tables presented above.

•

Stock options. All of our named executive officers have outstanding stock options, which they are eligible to exercise upon termination of employment. If they are terminated for cause they are eligible to exercise all options that are vested at the time of termination, subject to the restrictive covenant and clawback provisions in their award agreements. Because our named executive officers have all

42

2022 PROXY STATEMENT

EXECUTIVE COMPENSATION TABLES

reached the age of 55, upon a voluntary resignation or termination without cause, their stock options would not be subject to forfeiture if their departure from the company is at least two years after the date of grant. If a named executive officer is terminated due to death or disability, all stock options vest and remain outstanding through their original expiration date. Upon a change in control, stock options granted prior to the approval of our 2017 Long-Term Incentive Plan vest immediately and may be exercised through their original expiration date. For stock options granted after the approval of our 2017 Long-Term Incentive Plan, accelerated vesting at a change in control requires Board approval.

Restricted stock units.options would not be subject to forfeiture if their departure from the company is at least two years after the date of grant. If a named executive officer is terminated due to death or disability, all stock options vest and remain outstanding through their original expiration date. Upon a change in control, stock options granted prior to the approval of our 2017 Long-Term Incentive Plan vest immediately and may be exercised through their original expiration date. For stock options granted after the approval of our 2017 and 2022 Long-Term Incentive Plans, accelerated vesting at a change in control (or at termination of employment within six months prior to or twenty-four months following the change in control) requires Board approval.

•
RSUs. Doug Howell and Walt Bay have outstanding restricted stock units.RSUs. Upon a termination for cause, all unvested restricted stock unitsRSUs would lapse. Because they have reached the age of 55, upon a voluntary resignation or termination without cause, their restricted stock unitsRSUs would not be subject to forfeiture if their departure from the company is at least two years after the date of grant, although vesting and distribution will still occur in accordance with the original schedule. If they terminate because of death or disability the awards vest immediately. Accelerated vesting of their RSUs at a change in control (or upon termination of employment within six months prior to or twenty-four months following the change in control) requires Board approval.
•
PSUs. All of our named executive officers have outstanding PSUs. Upon a termination for cause, all unvested PSUs would lapse. Because our named executive officers have all reached the age of 55, upon a voluntary resignation or termination without cause, the earned portion of PSUs would not be subject to forfeiture if their departure from the company is at least two years after the date of grant, although vesting and distribution will still occur in accordance with the original schedule. If they terminate because of death or disability the awards vest immediately at target. Upon a change in control, all restricted stock units grantedor upon termination of employment within six months prior to the approval of our 2017 Long-Term Incentive Plan vest immediately. For restricted stock units granted after the approval of our 2017 Long-Term Incentive Plan, accelerated vesting ator twenty-four months following a change in control, requiresimmediate vesting of all earned PSUs and the deemed satisfaction of performance conditions at target levels for unearned PSUs or, if greater, on a pro rata basis based on actual achievement as of the date of the change in control, require Board approval.

•

PSUs. All of our named executive officers have outstanding PSUs. Upon a termination for cause, all unvested PSUs would lapse. Because our named executive officers have all reached the age of 55, upon a voluntary resignation or termination without cause, the earned portion of PSUs would not be subject to forfeiture if their departure from the company is at least two years after the date of grant, although vesting and distribution will still occur in accordance with the original schedule. If they terminate because of death or disability the awards vest immediately at target. Upon a change in control, all earned PSUs granted prior to the approval of our 2017 Long-Term Incentive Plan vest immediately and the performance conditions for unearned PSUs are deemed satisfied at target levels or, if greater, on a pro rata basis based on actual achievement as of the date of the change in control. For PSUs granted after the approval of our 2017 Long-Term Incentive Plan, Board approval is required at a change in control both for accelerated vesting and for the deemed satisfaction of performance conditions described in the prior sentence.

•

DEPP. All of our named executive officers participate in the DEPP. Amounts in this plan vest on the earliest to occur of (1) the date the participant turns 62 (or the one-year anniversary of the date of grant for participants over 61), (2) death, (3) termination of employment because of disability, (4) termination in a manner that grants the person severance pay under our Severance

40

img134299666_7.jpg 

Executive Compensation Tables

Plan (filed as an exhibit to our Securities Exchange Act of 1934, as amended (Exchange Act) filings) and (5) a change in control. Accordingly, vesting would accelerate under all of the termination scenarios other than a voluntary resignation or a termination for cause.

•

Termination for Cause. Where applicable, termination “for cause” under our plans generally means a termination of employment based upon the good faith determination of the company that one or more of the following events has occurred: (i) the participant has committed a dishonest or fraudulent act to the material detriment of the company; (ii) the participant has been convicted (or pleaded guilty or nolo contendere) for a crime involving moral turpitude or for any felony; (iii) material and persistent insubordination on the part of the participant; (iv) the loss by the participant, for any reason, of any license or professional registration without the company’s written consent; (v) the diversion by the participant of any business or business opportunity of the company for the benefit of any party other than the company; (vi) material violation of the company’s Global Standards of Business Conduct by the participant; or (vii) the participant has engaged in illegal conduct, embezzlement or fraud with respect to the assets, business or affairs of the company.

•

Termination for Cause. Where applicable, termination “for cause” under our plans generally means a termination of employment based upon the good faith determination of the company that one or more of the following events has occurred: (i) the participant has committed a dishonest or fraudulent act to the material detriment of the company; (ii) the participant has been convicted (or pleaded guilty or nolo contendere) for a crime involving moral turpitude or for any felony; (iii) material and persistent insubordination on the part of the participant; (iv) the loss by the participant, for any reason, of any license or professional registration without the company’s written consent; (v) the diversion by the participant of any business or business opportunity of the company for the benefit of any party other than the company; (vi) material violation of the company’s Global Standards of Business Conduct by the participant; or (vii) the participant has engaged in illegal conduct, embezzlement or fraud with respect to the assets, business or affairs of the company.
•
No Liberal Change-in-Control Definitions in Equity Plans or DEPP. None of our equity plans or the DEPP has a “liberal” change-in-control definition (i.e., they do not provide for buyout thresholds lower than 50%, and a change in control is deemed to occur upon completion, rather than stockholder approval, of a transaction).

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2022 PROXY STATEMENT

43

 

Executive Benefits
and Payments
Upon Separation

Voluntary
Resignation
($)

 

Death or
Disability
($)

 

Termination
with Cause
($)

 

Termination
without
Cause
($)

 

Change in
Control(1)
($)

 

Termination
without Cause or
Resignation for
Good Reason
Following
Change in
Control
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance Pay

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,300,000

 

 

 

—

 

 

 

14,300,000

 

 

 

Stock Options

 

 

15,937,237

 

 

 

19,748,237

 

 

 

—

 

 

 

15,937,237

 

 

 

19,748,237

 

 

 

19,748,237

 

 

PSUs(2)

 

 

12,759,016

 

 

 

29,808,808

 

 

 

—

 

 

 

12,759,016

 

 

 

29,808,808

 

 

 

29,808,808

 

Pat Gallagher

 

DEPP(3)

 

 

28,821,215

 

 

 

31,562,361

 

 

 

28,821,215

 

 

 

31,562,361

 

 

 

31,562,361

 

 

 

31,562,361

 

 

Benefit Plan Participation(4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

58,290

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

22,288,923

 

 

 

Total

 

 

57,517,468

 

 

 

81,119,406

 

 

 

28,821,215

 

 

 

61,558,614

 

 

 

81,119,406

 

 

 

117,766,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance Pay

 

 

—

 

 

 

—

 

 

 

—

 

 

 

730,769

 

 

 

—

 

 

 

6,650,000

 

 

Stock Options

 

 

5,298,727

 

 

 

6,841,945

 

 

 

—

 

 

 

5,298,727

 

 

 

6,841,945

 

 

 

6,841,945

 

 

RSUs

 

 

1,310,932

 

 

 

1,310,932

 

 

 

—

 

 

 

1,310,932

 

 

 

1,310,932

 

 

 

1,310,932

 

Doug Howell

 

PSUs(2)

 

 

2,589,811

 

 

 

6,041,265

 

 

 

—

 

 

 

2,589,811

 

 

 

6,041,265

 

 

 

6,041,265

 

 

DEPP(3)

 

 

—

 

 

 

1,096,458

 

 

 

—

 

 

 

1,096,458

 

 

 

1,096,458

 

 

 

1,096,458

 

 

Benefit Plan Participation(4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

51,766

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

Total

 

 

9,199,469

 

 

 

15,290,600

 

 

 

—

 

 

 

11,026,696

 

 

 

15,290,600

 

 

 

21,992,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance Pay

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,000,000

 

 

 

—

 

 

 

7,000,000

 

 

 

Stock Options

 

 

7,453,806

 

 

 

9,078,201

 

 

 

—

 

 

 

7,453,806

 

 

 

9,078,201

 

 

 

9,078,201

 

 

 

PSUs(2)

 

 

2,726,814

 

 

 

6,359,485

 

 

 

—

 

 

 

2,726,814

 

 

 

6,359,485

 

 

 

6,359,485

 

Tom Gallagher

 

DEPP(3)

 

 

1,881,394

 

 

 

2,977,852

 

 

 

1,881,394

 

 

 

2,977,852

 

 

 

2,977,852

 

 

 

2,977,852

 

 

 

Benefit Plan Participation(4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

65,061

 

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

Total

 

 

12,062,014

 

 

 

18,415,538

 

 

 

1,881,394

 

 

 

14,158,472

 

 

 

18,415,538

 

 

 

25,480,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance Pay

 

 

—

 

 

 

—

 

 

 

—

 

 

 

375,000

 

 

 

—

 

 

 

5,250,000

 

 

 

Stock Options

 

 

5,546,919

 

 

 

6,765,049

 

 

 

—

 

 

 

5,546,919

 

 

 

6,765,049

 

 

 

6,765,049

 

 

 

PSUs(2)

 

 

1,909,212

 

 

 

4,633,715

 

 

 

—

 

 

 

1,909,212

 

 

 

4,633,715

 

 

 

4,633,715

 

Scott Hudson

 

DEPP

 

 

—

 

 

 

913,715

 

 

 

—

 

 

 

913,715

 

 

 

913,715

 

 

 

913,715

 

 

 

Benefit Plan Participation(4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

67,084

 

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

Total

 

 

7,456,131

 

 

 

12,312,479

 

 

 

—

 

 

 

8,744,845

 

 

 

12,312,479

 

 

 

17,629,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance Pay

 

 

—

 

 

 

—

 

 

 

—

 

 

 

446,154

 

 

 

—

 

 

 

5,075,000

 

 

 

Stock Options

 

 

4,773,836

 

 

 

5,981,926

 

 

 

—

 

 

 

4,773,836

 

 

 

5,981,926

 

 

 

5,981,926

 

 

RSUs

 

 

1,315,678

 

 

 

1,315,678

 

 

 

—

 

 

 

1,315,678

 

 

 

1,315,678

 

 

 

1,315,678

 

Walt Bay

 

PSUs(2)

 

 

2,030,747

 

 

 

4,731,254

 

 

 

—

 

 

 

2,030,747

 

 

 

4,731,254

 

 

 

4,731,254

 

 

DEPP

 

 

—

 

 

 

21,114,475

 

 

 

—

 

 

 

21,114,475

 

 

 

21,114,475

 

 

 

21,114,475

 

 

 

Benefit Plan Participation(4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

67,082

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,320,573

 

 

Total

 

 

8,120,261

 

 

 

33,143,333

 

 

 

—

 

 

 

29,680,889

 

 

 

33,143,333

 

 

 

44,605,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE COMPENSATION TABLES

   

Executive Benefits

and Payments

Upon Separation

 

Voluntary

Resignation

  

Death or

Disability

  

Termination

with Cause

  

Termination

without

Cause

  

Change in

Control (1)

  

Termination

without Cause or

Resignation for

Good Reason

Following

Change in Control

 

Pat Gallagher

 

Severance Pay

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,300,000

 

 

$

—

 

 

$

13,000,000

 

 

Stock Options (2)

 

 

28,861,933

 

 

 

37,801,104

 

 

 

19,971,303

 

 

 

28,861,933

 

 

 

37,801,104

 

 

 

37,801,104

 

 

Restricted Stock Units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

PSUs (3)

 

 

8,979,744

 

 

 

24,290,102

 

 

 

—

 

 

 

8,979,744

 

 

 

24,290,102

 

 

 

24,290,102

 

 

DEPP (4)

 

 

21,263,670

 

 

 

23,280,178

 

 

 

21,263,670

 

 

 

23,280,178

 

 

 

23,280,178

 

 

 

23,280,178

 

 

Benefit Plan Participation (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

64,133

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,815,995

 

 

 

18,177,755

 

  

Total

 

$

59,105,347

 

 

$

85,371,384

 

 

$

41,234,973

 

 

$

62,421,855

 

 

$

96,187,379

 

 

$

116,613,272

 

Doug Howell

 

Severance Pay

 

$

—

 

 

$

—

 

 

$

—

 

 

$

657,692

 

 

$

—

 

 

$

5,700,000

 

 

Stock Options (2)

 

 

10,699,805

 

 

 

13,436,099

 

 

 

7,702,572

 

 

 

10,699,805

 

 

 

13,436,099

 

 

 

13,436,099

 

 

Restricted Stock Units

 

 

1,683,488

 

 

 

2,176,367

 

 

 

—

 

 

 

1,683,488

 

 

 

2,176,367

 

 

 

2,176,367

 

 

PSUs (3)

 

 

2,869,451

 

 

 

6,441,592

 

 

 

—

 

 

 

2,869,451

 

 

 

6,441,592

 

 

 

6,441,592

 

 

DEPP

 

 

—

 

 

 

30,993,083

 

 

 

—

 

 

 

30,993,083

 

 

 

30,993,083

 

 

 

30,993,083

 

 

Benefit Plan Participation (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

64,592

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,243,502

 

 

 

9,052,966

 

  

Total

 

 $

 

15,252,744

 

 

 

 $

 

53,047,141

 

 

 

 $

 

7,702,572

 

 

 

 $

 

46,903,519

 

 

 

 $

 

58,290,643

 

 

 

 $

 

 

67,864,699

 

 

 

 

 

Tom Gallagher

 

Severance Pay

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,000,000

 

 

$

—

 

 

$

6,000,000

 

 

Stock Options (2)

 

 

17,464,967

 

 

 

21,455,881

 

 

 

11,556,801

 

 

 

17,464,967

 

 

 

21,445,881

 

 

 

21,445,881

 

 

Restricted Stock Units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

PSUs (3)

 

 

2,871,479

 

 

 

6,289,425

 

 

 

—

 

 

 

2,871,479

 

 

 

6,289,425

 

 

 

6,289,425

 

 

DEPP

 

 

—

 

 

 

806,603

 

 

 

—

 

 

 

806,603

 

 

 

806,603

 

 

 

806,603

 

 

Benefit Plan Participation (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

50,768

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,540,813

 

  

Total

 

 $

 

20,336,446

 

 

 

 $

 

28,551,909

 

 

 

 $

 

11,556,801

 

 

 

 $

 

22,143,049

 

 

 

 $

 

28,541,909

 

 

 

 $

 

41,133,490

 

 

 

Scott Hudson

 

Severance Pay

 

$

—

 

 

$

—

 

 

$

—

 

 

$

296,154

 

 

$

—

 

 

$

4,200,000

 

 

Stock Options (2)

 

 

16,814,143

 

 

 

19,810,792

 

 

 

12,172,071

 

 

 

16,814,143

 

 

 

19,810,792

 

 

 

19,810,792

 

 

Restricted Stock Units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

PSUs (3)

 

 

2,234,317

 

 

 

4,802,651

 

 

 

—

 

 

 

2,234,317

 

 

 

4,802,651

 

 

 

4,802,651

 

 

DEPP

 

 

—

 

 

 

13,645,025

 

 

 

—

 

 

 

13,645,025

 

 

 

13,645,025

 

 

 

13,645,025

 

 

Benefit Plan Participation (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

47,946

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

  

Total

 

 $

 

19,048,460

 

 

 

 $

 

38,258,468

 

 

 

 $

 

12,172,071

 

 

 

 $

 

32,989,639

 

 

 

 $

 

38,258,468

 

 

 

 $

 

42,506,414

 

 

 

Walt Bay

 

Severance Pay

 

$

—

 

 

$

—

 

 

$

—

 

 

$

390,385

 

 

$

—

 

 

$

4,350,000

 

 

Stock Options (2)

 

 

7,778,542

 

 

 

10,274,012

 

 

 

4,423,179

 

 

 

7,778,542

 

 

 

10,274,012

 

 

 

10,274,012

 

 

Restricted Stock Units

 

 

2,075,242

 

 

 

2,464,357

 

 

 

—

 

 

 

2,075,242

 

 

 

2,464,357

 

 

 

2,464,357

 

 

PSUs (3)

 

 

1,435,740

 

 

 

3,712,700

 

 

 

—

 

 

 

1,435,740

 

 

 

3,712,700

 

 

 

3,712,700

 

 

DEPP

 

 

—

 

 

 

14,490,134

 

 

 

—

 

 

 

14,490,134

 

 

 

14,490,134

 

 

 

14,490,134

 

 

Benefit Plan Participation (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

59,511

 

 

Excise Tax Gross-Up

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,495,711

 

 

 

7,543,627

 

 

Total

 

 $

 

11,289,524

 

 

 

 $

 

30,941,203

 

 

 

 $

 

4,423,179

 

 

 

 $

 

26,170,043

 

 

 

 $

 

35,436,914

 

 

 

 $

 

42,894,341

 

 

 

(1)

For stock options, restricted stock units(1)

For stock options, RSUs and PSUs granted after 2017, assumes Board approval of accelerated payouts at a change in control.
(2)
For purposes of this table we assume that unearned PSUs are valued at actual achievement as of December 31, 2023.
(3)
The participant has reached age 62, which means that substantially all award balances under the plan are vested.
(4)
Represents the lump sum present value of two years of benefits as described above under Participation in benefit plans.

2024 PROXY STATEMENT

41

(2)

A substantial portionItem 3 – Advisory vote to Approve the Compensation of the values shown represent fully vested amounts, which are disclosed above under Outstanding Equity Awards at 2021 Fiscal Year-end.our Named Executive Officers

(3)

For purposes of this table we assume that unearned PSUs are valued at actual achievement as of December 31, 2021.

(4)

The participant has reached age 62, which means that substantially all award balances under the plan are vested.

(5)

Represents the lump sum present value of two years of benefits as described above under Participation in benefit plans.

44

2022 PROXY STATEMENT

Item 43 – Advisory Votevote to Approve the Compensation of Ourour Named Executive Officers

Pursuant to Section 14A of the Exchange Act, we are asking our stockholders to vote, on a non-binding, advisory basis, to approve the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, compensation tables and related narrative discussion in this Proxy Statement. This proposal, commonly known as “say-on-pay”“say-on-pay”, gives our stockholders the opportunity to express their views on the compensation of our named executive officers.officers and is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our executive compensation philosophy, policies and practices. Our stockholders are given the opportunity to vote, on a non-binding, advisory basis, on say-on-pay proposals annually. Our stockholders will have the next opportunity to vote on such a proposal at the 20232025 Annual Meeting.

We believe that our compensation program for named executive officers is structured in the best manner possible to support our company and business objectives, as well as to support our culture and traditions developed since our founding in 1927. We believe our program strikes the appropriate balance between using responsible, measured pay practices and effectively motivating our executives to dedicate themselves fully to value creation for our stockholders.

We encourage you to read our Compensation Discussion and Analysis on pages 2421 to 3331 of this Proxy Statement and our Executive Compensation tables on pages 3533 to 44.41.

ResolutionThe vote is advisory, which means that the vote is not binding on the Board or the Compensation Committee and Recommendation

neither the Board nor the Compensation Committee will be required to take any action, or refrain from taking any action, as a result of the outcome of the vote on this proposal. The Board strongly endorsesand the company’sCompensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program for named executive officers and recommends that stockholders vote in favor of the following resolution:program.

Resolution and Recommendation

The Board strongly endorses the company’s compensation program for named executive officers and recommends that stockholders vote in favor of the following resolution:

RESOLVED, that the compensation of the named executive officers of Arthur J. Gallagher & Co., as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the executive compensation tables and the related narrative in this Proxy Statement, is hereby APPROVED.

img134299666_34.jpg 

The Board recommends that you vote “FOR” the advisory resolution approving the compensation of the company’s named executive officers

42

img134299666_7.jpg 

Pay Versus Performance

Pay Versus Performance

As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive “compensation actually paid” and the company’s financial performance for each of the last three completed calendar years. For further information concerning the company’s pay for performance philosophy and how the company aligns executive compensation with performance, see Overview of Our Executive Compensation Program and Components of Compensation for Named Executive Officers.

 

 

 

 

 

 

 

 

 

 

 

 

 

Value of Initial Fixed $100
Investment Based On:

 

 

 

 

 

 

 

 

Year

 

Summary
Compensation
Table Total for
PEO(1)

 

 

Compensation
Actually Paid
to PEO(2)

 

 

Average
Summary
Compensation
Table Total for
Non-PEO
Named
Executive
Officers(3)

 

 

Average
Compensation
Actually Paid
to Non-PEO
Named
Executive
Officers(4)

 

 

Total
Shareholder
Return(5)

 

 

Peer Group
Total
Shareholder
Return(6)

 

 

Net
Income
(millions)

 

 

Adjusted
EBITDAC
Growth(7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

$

15,496,222

 

 

$

32,997,722

 

 

$

5,408,851

 

 

$

9,743,063

 

 

$

120.50

 

 

$

108.60

 

 

$

969.5

 

 

 

19.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

$

14,194,926

 

 

$

23,190,737

 

 

$

4,953,048

 

 

$

6,908,560

 

 

$

112.43

 

 

$

97.54

 

 

$

1,114.2

 

 

 

18.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

$

13,882,255

 

 

$

36,172,141

 

 

$

5,079,153

 

 

$

11,580,235

 

 

$

139.01

 

 

$

141.53

 

 

$

906.8

 

 

 

17.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

$

11,177,460

 

 

$

26,471,099

 

 

$

3,744,087

 

 

$

8,713,871

 

 

$

132.15

 

 

$

106.24

 

 

$

818.8

 

 

 

21.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
The dollar amounts reported in this column are the amounts reported for Pat Gallagher (the company’s Chairman and Chief Executive Officer) for each of the corresponding years in the “Total” column of the Summary Compensation Table.
(2)
The dollar amounts reported in this column represent the amount of “compensation actually paid” to Pat Gallagher, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect total compensation actually realized or received. In accordance with these rules, these amounts reflect “Total Compensation” as set forth in the Summary Compensation Table for each year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation Actually Paid to PEO

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Compensation Table Total

 

$

15,496,222

 

 

$

14,194,926

 

 

$

13,882,255

 

 

$

11,177,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less, value of “Stock Awards” and “Option Awards” reported in Summary Compensation Table

 

$

5,377,616

 

 

$

4,802,893

 

 

$

5,492,149

 

 

$

3,637,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less, Change in Pension Value reported in Summary Compensation Table

 

$

36,498

 

 

 

—

 

 

$

19,063

 

 

$

98,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, year-end fair value of outstanding and unvested equity awards granted in the year

 

$

11,639,809

 

 

$

7,503,151

 

 

$

13,095,137

 

 

$

10,030,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, fair value as of vesting date of equity awards granted and vested in the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years

 

$

12,000,551

 

 

$

7,566,230

 

 

$

14,263,150

 

 

$

10,345,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus (less), change in fair value from prior year end until the vesting date of equity awards granted in prior years that vested in the year

 

$

(762,443

)

 

$

(1,297,632

)

 

$

416,987

 

 

$

(1,371,701

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year

 

$

37,697

 

 

$

26,954

 

 

$

25,824

 

 

$

25,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less, prior year-end fair value for any equity awards forfeited in the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, pension service cost for services rendered during the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation Actually Paid to Pat Gallagher

 

$

32,997,722

 

 

$

23,190,737

 

 

$

36,172,141

 

 

$

26,471,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)
The dollar amounts reported in this column represent the average of the amounts reported for the company’s named executive officers as a group (excluding Pat Gallagher) in the “Total” column of the Summary Compensation Table in each applicable year. The named executive officers included for these purposes in each applicable year 2020 through 2023 are as follows: Doug Howell, Tom Gallagher, Scott Hudson and Walt Bay.

2024 PROXY STATEMENT

43

Pay Versus Performance

(4)
The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the named executive officers of Arthur J. Gallagher & Co.as a group (excluding Pat Gallagher), as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rules, these amounts reflect “Total Compensation” as set forth in the Summary Compensation Table for each year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed pursuantat the time of the grant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Compensation Actually Paid to Non-PEO Named Executive Officers

2023

2022

2021

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Compensation Table Total

 

$

5,408,851

 

 

$

4,953,048

 

 

$

5,079,153

 

 

$

3,744,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less, value of “Stock Awards” and “Option Awards” reported in Summary Compensation Table

 

$

1,235,470

 

 

$

1,109,940

 

 

$

1,322,515

 

 

$

925,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less, Change in Pension Value reported in Summary Compensation Table

 

$

7,164

 

 

 

—

 

 

$

48

 

 

$

20,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, year-end fair value of outstanding and unvested equity awards granted in the year

 

$

2,387,352

 

 

$

1,578,828

 

 

$

2,958,220

 

 

$

2,498,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, fair value as of vesting date of equity awards granted and vested in the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years

 

$

3,439,861

 

 

$

1,941,447

 

 

$

4,681,938

 

 

$

3,877,807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus (less), change in fair value from prior year end until the vesting date of equity awards granted in prior years that vested in the year

 

$

(258,894

)

 

$

(462,939

)

 

$

174,571

 

 

$

(467,652

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year

 

$

8,526

 

 

$

8,115

 

 

$

8,916

 

 

$

8,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less, prior year-end fair value for any equity awards forfeited in the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus, pension service cost for services rendered during the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Compensation Actually Paid to Non-PEO Named Executive Officers

 

$

9,743,063

 

 

$

6,908,560

 

 

$

11,580,235

 

 

$

8,713,871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)
Total Shareholder Return (TSR) is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the company’s share price at the end of each fiscal year shown and the beginning of the measurement period, by (b) the company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31 of the prior fiscal year.
(6)
Includes Aon plc; Marsh & McLennan Companies, Inc.; Willis Towers Watson plc; and Brown & Brown, Inc.
(7)
“Adjusted EBITDAC” growth as defined for our annual cash incentives and PSUs under Annual Cash Incentives and Long-Term Incentives. See Exhibit A for reconciliations of non-GAAP measures.

44

img134299666_7.jpg 

Pay Versus Performance

Description of Relationships between Information Presented in Pay versus Performance Table

As discussed in more detail under Overview of our Executive CompensationProgram, an important part of the company’s executive compensation program is pay-for-performance. While we use several performance measures to align executive compensation with company performance, not all of those measures are presented in the Pay versus Performance table. We seek to promote the long-term interests of the company and its stockholders and therefore the performance measures used by the company do not always correspond directly to compensation actually paid for a particular year (as calculated in accordance with SEC rules). In accordance with SEC rules, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table.


Compensation Actually Paid, Cumulative TSR and Peer Group TSR

img134299666_35.jpg 

Compensation Actually Paid and Net Income

img134299666_36.jpg 

2024 PROXY STATEMENT

45

Pay Versus Performance

Compensation Actually Paid and Adjusted EBITDAC Growth

img134299666_37.jpg 

Financial Performance Measures

The most important financial performance measure used to link compensation actually paid to the compensation disclosure rules ofcompany’s named executive officers for the Securitiesmost recently completed fiscal year to the company’s performance is adjusted EBITDAC growth, although we also consider adjusted revenue growth and Exchange Commission, includingadjusted EBITDAC per share growth in connection with final award determinations for annual cash incentives and PSU payouts.

The measures used for both long-term and short-term incentive awards have been selected because the Compensation DiscussionCommittee believes they incentivize our executive officers to make business decisions that align with the long-term interests of our stockholders and Analysis,act as effective stewards of our stockholders’ investment. We believe these measures hold our executive officers accountable for integration expenses associated with our merger and acquisition activity and provide a strong connection between operating decisions and cash incentives. Further, calculating adjusted EBITDAC growth on a per-share basis to determine PSUs awards promotes management accountability around the executive compensation tablesfinancing of our merger and the related narrative in this Proxy Statement, is hereby APPROVED.acquisition activity within an appropriate capital structure.

 

Most Important Measures in Determining NEO Pay

LOGO

Adjusted EBITDAC growth

Adjusted Revenue growth

Adjusted EBITDAC per share growth

46

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THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ADVISORY RESOLUTION APPROVING THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

CEO Pay Ratio

CEO Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of Pat Gallagher, our CEO, to the annual total compensation of the median compensated of all our other employees who were employed as of December 31, 2021.2023. For 2021,2023, Pat Gallagher’s total compensation was $13,882,255$15,496,222 and the annual total compensation of our median compensated employee was $64,135.$63,485. The ratio between these two amounts was 216244 to 1.

This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) and the methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

As of December 31, 2021,2023, our total employee population consisted of approximately 39,53152,155 employees. As permitted by the rule, we excluded approximately 4,0784,334 employees of the businesses we acquired during 2021,2023, which are identified in Note 43 to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2021.2023. We also excluded approximately 1,2812,535 non-U.S. employees, or less than 4%5% of our total U.S. and non-U.S. employee population, from the following non-U.S. jurisdictions: Colombia (260)Ireland (296), Peru (238), Chile (141)(227), Brazil (215), Bermuda (157), Sri Lanka (152), Romania (151), Singapore (112), Guernsey (110), Peru (110), Bermuda (83), Jersey (68), Sweden (65), Jamaica (64)(103), Trinidad and Tobago (98), Sweden (70), Jamaica (57), Norway (56), Singapore (49)United Arab Emirates (55), Sri Lanka (48)Jersey (53), Germany (53), Japan (50), Barbados (44), Brazil (26)(46), Switzerland (24)(34), France (33), Malaysia (33), Cayman Islands (23)(32), Turkey (27), Isle of Man (21)(26), Gibraltar (20)(19), NorwayItaly (19), Hong Kong (17), Malta (16), Taiwan (16), South Africa (14), Republic of Korea (13), Saint Lucia (10)(7), Belgium (6)(7), Spain (5), Saint Vincent and the Grenadines (4), Vietnam (4), Antigua and Barbuda (3), Dominica (3), Grenada (3), United Arab EmiratesDenmark (3), SaintNetherlands (3), Saints Kitts and Nevis (2), Liechtenstein (2), and Vietnam (2)Finland (1). After giving effect to these two adjustments, our employee population consisted of approximately 34,17245,246 individuals.

We used 20212023 gross taxable income as set forth in our payroll data to determine our “median employee,” which we annualized for all permanent employees who did not work for the entire year. Once identified, we calculated the annual total compensation of our “median employee” for 20212023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of the 20212023 Summary Compensation Table included in this Proxy Statement.

LOGO

2024 PROXY STATEMENT

2022 PROXY STATEMENT

45

47

Questions & Answers About the Annual Meeting

Questions & Answers About the Annual Meeting

What is the quorum requirement for holding the Annual Meeting?

The holders of a majority of the stock issued and outstanding and entitled to vote at a meeting of the stockholders, present in person or deemed to be present or represented by proxy, shall constitute a quorum for purposes of any Annual Meeting of Stockholders. Broker non-votes and abstentions are counted for purposes of determining the presence of a quorum at this Annual Meeting. If a quorum is not present at the scheduled time of the Annual Meeting, the stockholders entitled to vote thereat, present in person, deemed to be present or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present, deemed to be present or represented.

What are broker non-votes?

A “broker non-vote” occurs with respect to a proposal when a broker, trustee, or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders but is not permitted to vote on other proposals without instructions from the beneficial owner and the beneficial owner fails to provide the nominee with such instructions. Under the rules of the NYSE, brokers, trustees or other nominees may (but are not required to) generally vote on routine matters but cannot vote on non-routine matters. Only the ratification of the appointment of our independent auditor is considered a routine matter. The other proposals are not considered routine matters, and without your instructions, your broker cannot vote your shares.

Will any matters other than those identified in this Proxy Statement be decided at the Annual Meeting?

As of the date of this Proxy Statement, we are not aware of any matters to be raised at the Annual Meeting other than those described in this Proxy Statement. If any other matters are properly presented at the Annual Meeting for consideration, the people named as proxy holders on the proxy card will vote your proxy on those matters in their discretion. If any of our nominees are not available as a candidate for director, the proxy holders will vote your proxy for any other candidate the Board may nominate or the Board may choose to decrease the size of the Board or leave a vacancy on the Board.

Who can vote, and how do I vote?

Only holders of our common stock at the close of business on the record date of March 16, 2022 are entitled to notice of and to vote at the Annual Meeting. We have no other outstanding securities entitled to vote, and there are no cumulative voting rights for the election of directors. At the close of business on the record date, we had 209,614,153 shares of common stock outstanding and entitled to vote. Each holder of our common stock on that date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting.

“Record holders” may vote (1) by completing and returning a proxy card, (2) on the Internet, or (3) using a toll-free telephone number. Please see the proxy card for specific instructions on how to vote using one of these methods. The telephone and

Internet voting facilities for record holders will close at 11:59 p.m. Eastern Daylight Time on May 9, 2022. “Beneficial owners” will receive instructions from their broker or other intermediary (or should contact their broker or other intermediary for instructions) describing the procedures and options for voting. Shares held in the Arthur J. Gallagher & Co. Employees’ 401(k) Savings and Thrift Plan must be voted by 5:00 p.m. Eastern Daylight Time on May 5, 2022.

What is the voting standard and the treatment of abstentions and broker non-votes for each item on the proxy card?

What is the quorum requirement for holding the Annual Meeting?

The holders of a majority of the stock issued and outstanding and entitled to vote at a meeting of the stockholders, present in person or deemed to be present or represented by proxy, shall constitute a quorum for purposes of any Annual Meeting of Stockholders. Broker non-votes and abstentions are counted for purposes of determining the presence of a quorum at this Annual Meeting. If a quorum is not present at the scheduled time of the Annual Meeting, the stockholders entitled to vote thereat, present in person, deemed to be present or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present, deemed to be present or represented.

What are broker non-votes?

A “broker non-vote” occurs with respect to a proposal when a broker, trustee, or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders but is not permitted to vote on other proposals without instructions from the beneficial owner and the beneficial owner fails to provide the nominee with such instructions. Under the rules of the NYSE, brokers, trustees or other nominees may (but are not required to and may elect not to) generally vote on routine matters but cannot vote on non-routine matters. We expect that only the ratification of the appointment of our independent auditor will be considered a routine matter. We do not expect the other proposals to be considered routine matters, and, as such, without your instructions, your broker cannot vote your shares. Whether a proposal is considered routine or non-routine is subject to NYSE rules and final determination by the NYSE. As indicated above, even with respect to routine matters, some brokers choose not to exercise discretionary voting authority. Therefore, we encourage you to provide voting instructions to your broker or other nominee as soon as possible.

Will any matters other than those identified in this Proxy Statement be decided at the Annual Meeting?

As of the date of this Proxy Statement, we are not aware of any matters to be raised at the Annual Meeting other than those described in this Proxy Statement. If any other matters are properly presented at the Annual Meeting for consideration, the people named as proxy holders on the proxy card will vote your proxy on those matters in their discretion. If any of our nominees are not available as a candidate for director, the proxy holders will vote your proxy for any other candidate the Board may nominate or the Board may choose to decrease the size of the Board or leave a vacancy on the Board.

Who can vote, and how do I vote?

Only holders of our common stock at the close of business on the record date of March 18, 2024 are entitled to notice of and to vote at the Annual Meeting. We have no other outstanding securities entitled to vote, and there are no cumulative voting rights for the election of directors. At the close of business on the record date, we had 218,302,819 shares of common stock outstanding and entitled to vote. Each holder of our common stock on that date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting.

“Record holders” may vote (1) by completing and returning a proxy card, (2) on the Internet, or (3) using a toll-free telephone number. Please see the proxy card for specific instructions on how to vote using one of these methods. The telephone and Internet voting facilities for record holders will close at 11:59 p.m. Eastern Daylight Time on May 6, 2024. “Beneficial owners” will receive instructions from their broker or other intermediary (or should contact their broker or other intermediary for instructions) describing the procedures and options for voting. Shares held in the Arthur J. Gallagher & Co. Employees’ 401(k) Savings and Thrift Plan must be voted by 5:00 p.m. Eastern Daylight Time on May 2, 2024.

What is the voting standard and the treatment of abstentions and broker non-votes for each item on the proxy card?

Voting Item

Voting
Standard

Voting
Standard

Treatment of

Abstentions &

Broker Non-Votes

Election of
directors

(Item 1)

Majority of
votes cast

Not counted as votes cast and therefore no effect

2022 Long-Term Incentive Plan (Item 2)

Auditor ratification
(Item 2)

Majority of
stock having
voting power
and present

Abstentions treated as votes against. Broker non-votes have no effect

are not expected to be applicable

Auditor
ratification

Say-on-pay
(Item 3)

Majority of
stock having
voting power
and present

Abstentions treated as votes against. Broker non-votes, not applicable (routine matter, so brokers can vote)

if any, have no effect

Say-on-pay
(Item 4)

Majority of
stock having
voting power
and present

Abstentions treated as votes against. Broker non-votes have no effect

What is the difference between a “record holder” and a “beneficial owner”?

If your shares are registered directly in your name, you are considered the “record holder” of those shares. If, on the other hand, your shares are held in a brokerage account or by a bank or other intermediary, you are considered the “beneficial owner” of shares held in street name, and a Notice of Internet Availability of Proxy Materials (Internet Availability Notice) was forwarded to you automatically from your broker or other intermediary. As a beneficial owner, you have the right to instruct your broker or other intermediary to vote your shares in accordance with your wishes. You are also invited to attend the Annual Meeting. Because a beneficial owner is not the record holder, you may not vote your shares in person at the meeting unless you obtain a “legal proxy” from your broker or other intermediary. Your broker or other intermediary has provided you with an explanation of how to instruct it regarding the voting of your shares. If you do not provide your broker or other intermediary with voting instructions, your broker or other intermediary will not be allowed to vote your shares at the Annual Meeting for any matter other than ratification of the appointment of our independent auditor.

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you

46

48

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2022 PROXY STATEMENT

QUESTIONS & ANSWERS ABOUT THE ANNUAL MEETING

are a record holder and sign the proxy card without giving specific instructions, your shares will be voted in accordance with the recommendations of the Board (FOR all of our nominees to the Board, FOR the 2022 Long-Term Incentive Plan, FOR ratification of the appointment of our independent registered public accounting firm, and FOR the approval of the compensation of our named executive officers).

What is “householding”?

Householding is a procedure approved by the SEC whereby multiple stockholders of record who share the same last name and address will receive only one Internet Availability Notice or one set of proxy materials. Each stockholder of record will continue to receive a separate proxy card. We have undertaken householding to reduce printing costs and postage fees. A stockholder must affirmatively consent to householding. Record holders who wish to begin or discontinue householding may contact Broadridge Investor Communication Solutions, Inc. (Broadridge) by calling 1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Broadridge will undertake the necessary steps to continue or discontinue householding upon such request of a record holder. Beneficial owners who wish to begin or discontinue householding should contact their broker or other intermediary. You can also request prompt delivery of a copy of the Proxy Statement and Annual Report by contacting our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050 (telephone number: 630-773-3800).

What should I do if I receive more than one Internet Availability Notice or proxy card?

If you own some shares of common stock directly as a record holder and other shares indirectly as a beneficial owner, or if you own shares of common stock through more than one broker or other intermediary, you may receive multiple Internet Availability Notices or, if you request proxy materials to be delivered to you by mail, you may receive multiple proxy cards. It is necessary for you to vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the Internet Availability Notices you receive in order to vote all of the shares you own. If you request proxy materials to be delivered to you by mail, each proxy card you receive will come with its own prepaid return envelope. If you vote by mail, please make sure you return each proxy card in the return envelope that accompanied the proxy card.

May I change my vote after I return my proxy?

Yes. If you are a record holder, even after you have submitted your proxy, you may revoke your proxy at any time before it is exercised by delivering a written notice of revocation to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. You may also revoke your proxy and change your vote at any time by timely mailing a proxy card that is properly signed and dated with a later date than your previous vote, by casting a later dated proxy via the Internet or telephone, or by voting on the Internet at the virtual Annual Meeting.

If you are a beneficial owner of shares held in street name, you must contact the holder of record to revoke a previously authorized proxy. Beneficial owners must have a “legal proxy” from their broker to vote in person at the Annual Meeting. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

Who will pay the costs of soliciting these proxies?

We are soliciting proxies from stockholders on behalf of our Board and we will pay the costs of soliciting proxies to be voted at the Annual Meeting. After the Internet Availability Notices are initially distributed, we and our agents may also solicit proxies by mail, electronic mail, telephone or in person. We will also reimburse brokers and other intermediaries for their expenses in sending Internet Availability Notices to beneficial owners. In addition, we have hired Morrow Sodali LLC, 470 West Ave., Stamford, CT 06902, to assist us in soliciting proxies, for which we will pay a fee of $10,000 plus their reasonable out-of-pocket expenses.

What is the deadline for submitting a director nominee under our “proxy access” by-law or a stockholder proposal under Rule 14a-8 to be included in the 2023 Proxy Statement?

Pursuant to Rule 14a-8, if a stockholder wants the company to consider a proposal for inclusion in our proxy materials for presentation at our 2023 Annual Meeting, the proposal should be addressed to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050, must comply with all relevant SEC requirements, and must be received by us not later than close of business on November 22, 2022.

Our by-laws permit a stockholder, or a group of up to 20 stockholders, owning 3% or more of the company’s outstanding common stock continuously for at least three years to nominate and include in the company’s proxy materials directors constituting up to the greater of two or 20% of board seats, if the stockholder(s) and the nominee(s) meet the requirements in our by-laws. Notice of director nominations submitted under these proxy access by-law provisions must be delivered to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050, no earlier than the close of business on October 23, 2022 and no later than the close of business on November 22, 2022. For these purposes, “close of business” means 5:00 p.m. CDT. If the date of the Annual Meeting is more than 30 days before or after May 10, 2023, a notice under our proxy access by-law must be so delivered not earlier than the close of business on the 150th day prior to the 2023 Annual Meeting and not later than the close of business on the later of the 120th day prior to the 2023 Annual Meeting or the 10th day following the date the 2023 Annual Meeting date is publicly announced. Director nominations submitted pursuant to the proxy access provisions of our by-laws must comply with all of the requirements of our by-laws.

How do I submit a proposal regarding a director nomination or other item of business to be presented directly at the 2023 Annual Meeting?

Under our by-laws, notice of any matter that is not submitted for inclusion in our Proxy Statement and proxy card for the 2023 Annual Meeting under Rule 14a-8, but that a stockholder instead wishes to present directly at the Annual Meeting, including director nominations outside of our proxy access by-law and other items of business, must be delivered to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050, not later than the close of business on February 9, 2023 and not earlier than the close of business on January 10, 2023. If the date of the 2023 Annual Meeting is more than 30 days before or after May 10, 2023, notice of any such matter must be delivered not earlier than the close of business on the 120th day prior to the

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2022 PROXY STATEMENT

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Questions & Answers About the Annual Meeting

What is the difference between a “record holder” and a “beneficial owner”?

If your shares are registered directly in your name, you are considered the “record holder” of those shares. If, on the other hand, your shares are held in a brokerage account or by a bank or other intermediary, you are considered the “beneficial owner” of shares held in street name, and a Notice of Internet Availability of Proxy Materials (Internet Availability Notice) was forwarded to you automatically from your broker or other intermediary. As a beneficial owner, you have the right to instruct your broker or other intermediary to vote your shares in accordance with your wishes. You are also invited to attend the Annual Meeting. Because a beneficial owner is not the record holder, you may not vote your shares in person at the meeting unless you obtain a “legal proxy” from your broker or other intermediary. Your broker or other intermediary has provided you with an explanation of how to instruct it regarding the voting of your shares. If you do not provide your broker or other intermediary with voting instructions, your broker or other intermediary may in some cases vote the shares in their discretion, but are not permitted to vote on certain proposals and may choose not to vote on any of the proposals.

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you are a record holder and sign the proxy card without giving specific instructions, your shares will be voted in accordance with the recommendations of the Board (FOR all of our nominees to the Board, FOR ratification of the appointment of our independent registered public accounting firm, and FOR the approval of the compensation of our named executive officers).

What is “householding”?

Householding is a procedure approved by the SEC whereby multiple stockholders of record who share the same last name and address will receive only one Internet Availability Notice or one set of proxy materials. Each stockholder of record will continue to receive a separate proxy card. We have undertaken householding to reduce printing costs and postage fees. A stockholder must affirmatively consent to householding. Record holders who wish to begin or discontinue householding may contact Broadridge Investor Communication Solutions, Inc. (Broadridge) by calling 1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Broadridge will undertake the necessary steps to continue or discontinue householding upon such request of a record holder. Beneficial owners who wish to begin or discontinue householding should contact their broker or other intermediary. You can also request prompt delivery of a copy of the Proxy Statement and Annual Report by contacting our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050 or at the following telephone number: 630-773-3800.

What should I do if I receive more than one Internet Availability Notice or proxy card?

If you own some shares of common stock directly as a record holder and other shares indirectly as a beneficial owner, or if you own shares of common stock through more than one broker or other intermediary, you may receive multiple Internet Availability Notices or, if you request proxy materials to be delivered to you by mail, you may receive multiple proxy cards. It is necessary for you to vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the Internet Availability Notices you receive in order to vote all of the shares you own. If you request proxy materials to be delivered to you by mail, each proxy card you receive will come with its own prepaid return envelope. If you vote by mail, please make sure you return each proxy card in the return envelope that accompanied the proxy card.

May I change my vote or revoke my proxy?

Yes. If you are a record holder, even after you have submitted your proxy, you may revoke your proxy at any time before it is exercised by delivering a written notice of revocation to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. You may also revoke your proxy and change your vote at any time by timely mailing a proxy card that is properly signed and dated with a later date than your previous vote, by casting a later dated proxy via the Internet or telephone, or by voting on the Internet at the virtual Annual Meeting.

If you are a beneficial owner of shares held in street name, you must contact the holder of record to revoke a previously authorized proxy. Beneficial owners must have a “legal proxy” from their broker to vote in person at the Annual Meeting. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

Who will pay the costs of soliciting these proxies?

We are soliciting proxies from stockholders on behalf of our Board and we will pay the costs of soliciting proxies to be voted at the Annual Meeting. After the Internet Availability Notices are initially distributed, we and our agents may also solicit proxies by mail, electronic mail, telephone or in person. We will also reimburse brokers and other intermediaries for their expenses in sending Internet Availability Notices to beneficial owners. In addition, we have hired Morrow Sodali LLC, 333 Ludlow Street, 5th Floor, Stamford, CT 06902, to assist us in soliciting proxies, for which we will pay a fee of $11,000 plus their reasonable out-of-pocket expenses.

QUESTIONS & ANSWERS ABOUT THE ANNUAL MEETING

date of the 2023 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 2023 Annual Meeting or the 10th day following the date the 2023 Annual Meeting date is publicly announced. For these purposes, “close of business” means 5:00 p.m. CDT. We will not entertain any nominations or other items of business at the 2023 Annual Meeting that do not meet the requirements in our by-laws. If we do not receive notice of a matter by February 9, 2023 (or the applicable deadline if the 2023 Annual Meeting is more than 30 days before or after May 10, 2023), SEC rules permit the people named as proxy holders on the proxy card to vote proxies in their discretion when and if the matter is raised at the 2023 Annual Meeting. Any stockholder proposal relating to a director nomination should set forth all information relating to such person required to be disclosed in solicitations of proxies for contested director elections under Regulation 14A of the Exchange Act, including, among other things, the particular experience, qualifications, attributes or skills of the nominee that, in light of our business and structure, led to the stockholder’s conclusion that the nominee should serve on the Board. The proposal should also include the director nominee’s written consent to be named in our Proxy Statement as a nominee and to serve as a director if elected. Stockholders are also advised to review our by-laws, which contain additional disclosure and other requirements regarding the information to be included in the advance notices of stockholder proposals and director nominations.

In addition, notice that a stockholder intends to solicit proxies pursuant to Rule 14a-19, the SEC’s universal proxy rule, in support of nominees submitted under the Company’s advance notice bylaws must be delivered to our Corporate Secretary not later than March 11, 2023.

How do I recommend a proposed director nominee to the Board for consideration?

Any stockholder who wishes to propose director nominees for consideration by the Board’s Nominating/Governance Committee, but does not wish to present such proposal at an annual meeting, may do so at any time by directing a description of each nominee’s name and qualifications for Board membership to the Chair of the Nominating/Governance Committee, c/o our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. The recommendation should contain all of the information regarding the nominee described in the question and answer above and in our by-laws relating to director nominations brought before an annual meeting. The Nominating/Governance Committee evaluates nominee proposals submitted by stockholders in the same manner in which it evaluates other nominees.

Where can I find the voting results of the Annual Meeting?

An automated system administered by Broadridge will tabulate the votes. Voting results will be reported in a Current Report on Form 8-K that we will file with the SEC within four business days following the Annual Meeting.

Any stockholder who would like a copy of our Annual Report on Form 10-K, including the related financial statements and financial statement schedules, may obtain one, without charge, by addressing a request to the attention of the Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. Our copying costs will be charged if copies of exhibits to the Annual Report are requested. You may also obtain a copy of the Annual Report, including exhibits, from our website, investor.ajg.com, by clicking on “Financials.”

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2024 PROXY STATEMENT

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2022 PROXY STATEMENT

Exhibit A

Arthur J. Gallagher & Co. 2022 Long-Term Incentive Plan

I. Introduction

1.1 Purposes. The purposes of the Arthur J. Gallagher & Co. 2022 Long-Term Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of Awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining directors, officers and other employees, and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. As of the effective date of the Plan, no further awards shall be granted under the Prior Plans, as defined in Section 1.2.

1.2 Certain Definitions.

“Agreement” shall mean the written or electronic agreement evidencing an Award hereunder. An Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, memoranda, notices or similar instruments as approved by the Committee.

“Automatic Exercise Date” shall mean the last business day of the term of an Option or SAR.

“Award” shall mean an Option, Restricted Stock Award, Restricted Stock Unit Award, or a SAR, which may be awarded or granted under the Plan (collectively, “Awards”).

“Board” shall mean the Board of Directors of the Company.

“Change in Control” shall have the meaning set forth in Section 4.8(b).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Committee designated by the Board, consisting of two or more members of the Board, each of whom shall be (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of the principal national stock exchange on which the Common Stock is then traded. Any reference herein to the Committee shall be deemed to include any person to whom any duty of the Committee has been delegated pursuant to Section 1.3.

“Common Stock” shall mean the common stock, par value $1.00 per share, of the Company.

“Company” shall mean Arthur J. Gallagher & Co., a Delaware corporation, or any successor thereto.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Fair Market Value” shall mean the closing transaction price (or, at the discretion of the Committee, the real time price) of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion and in accordance with the applicable provisions of Section 409A of the Code, shall at such time deem appropriate. For purposes of Section 2.1(c)(i)(B), Section 2.1(c)(i)(C) and Section 4.5, the Fair Market Value of any shares of Common Stock shall be the market value determined by such methods or procedures as shall be established from time to time by the Committee.

“Free-Standing SAR” shall mean a SAR which is not granted in tandem with, or by reference to, an Option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) or cash with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

“Full Value Award” shall mean any Award settled in shares of Common Stock other than (i) an Option or (ii) a SAR.

“Incentive Stock Option” shall mean an Option that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option and is specified to be an Incentive Stock Option in the applicable Award Agreement.

“Non-Employee Director” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.

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2022 PROXY STATEMENT

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Questions & Answers About the Annual Meeting

What is the deadline for submitting a director nominee under our “proxy access” by-law or a stockholder proposal under Rule 14a-8 to be included in the 2025 Proxy Statement?

Pursuant to Rule 14a-8, if a stockholder wants the company to consider a proposal for inclusion in our proxy materials for presentation at our 2025 Annual Meeting, the proposal should be addressed to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050, must comply with all relevant SEC requirements, and must be received by us not later than close of business on November 22, 2024.

Our by-laws permit a stockholder, or a group of up to 20 stockholders, owning 3% or more of the company’s outstanding common stock continuously for at least three years to nominate and include in the company’s proxy materials directors constituting up to the greater of two or 20% of board seats, if the stockholder(s) and the nominee(s) meet the requirements in our by-laws. Notice of director nominations submitted under these proxy access by-law provisions must be delivered to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050, no earlier than the close of business on October 23, 2024 and no later than the close of business on November 22, 2024. For these purposes, “close of business” means 5:00 p.m. CDT. If the date of the Annual Meeting is more than 30 days before or after May 7, 2025, a notice under our proxy access by-law must be so delivered not earlier than the close of business on the 150th day prior to the 2025 Annual Meeting and not later than the close of business on the later of the 120th day prior to the 2025 Annual Meeting or the 10th day following the date the 2025 Annual Meeting date is publicly announced. Director nominations submitted pursuant to the proxy access provisions of our by-laws must comply with all of the requirements of our by-laws, which are currently under review by our Board. If amendments are approved by our Board, such changes will be timely disclosed pursuant to SEC rules through the filing of a Form 8-K.

How do I submit a proposal regarding a director nomination or other item of business to be presented directly at the 2025 Annual Meeting?

In addition, our by-laws provide notice procedures for stockholders to nominate a person as a director and to propose business to be considered by stockholders at a meeting (but not for inclusion in the proxy statement). Notice of nomination or proposal must set forth the information required by the by-laws (including information required under Rule 14a-19) and must be delivered to our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050, not later than the close of business on February 6, 2025 and not earlier than the close of business on January 7, 2025. If the date of the 2025 Annual Meeting is more than 30 days before or after May 7, 2025, notice of any such matter must be delivered not earlier than the

close of business on the 120th day prior to the date of the 2025 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 2025 Annual Meeting or the 10th day following the date the 2025 Annual Meeting date is publicly announced. For these purposes, “close of business” means 5:00 p.m. CDT. We will not entertain any nominations or other items of business at the 2025 Annual Meeting that do not meet the requirements in our by-laws. If we do not receive notice of a matter within the above-mentioned window (or the applicable deadline if the 2025 Annual Meeting is more than 30 days before or after May 7, 2025), SEC rules permit the people named as proxy holders on the proxy card to vote proxies in their discretion if the matter is raised at the 2025 Annual Meeting.

How do I recommend a proposed director nominee to the Board for consideration?

Any stockholder who wishes to propose director nominees for consideration by the Board’s Nominating/Governance Committee, but does not wish to present such proposal at an annual meeting, may do so at any time by directing a description of each nominee’s name and qualifications for Board membership to the Chair of the Nominating/Governance Committee, c/o our Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. The recommendation should contain all of the information regarding the nominee described in the question and answer above and in our by-laws relating to director nominations brought before an annual meeting. The Nominating/Governance Committee evaluates nominee proposals submitted by stockholders in the same manner in which it evaluates other nominees.

Where can I find the voting results of the Annual Meeting?

An automated system administered by Broadridge will tabulate the votes. Voting results will be reported in a Current Report on Form 8-K that we will file with the SEC within four business days following the Annual Meeting.

Any stockholder who would like a copy of our Annual Report on Form 10-K, including the related financial statements and financial statement schedules, may obtain one, without charge, by addressing a request to the attention of the Corporate Secretary at 2850 Golf Road, Rolling Meadows, Illinois 60008-4050. Our copying costs will be charged if copies of exhibits to the Annual Report are requested. You may also obtain a copy of the Annual Report, including exhibits, from our website, investor.ajg.com, by clicking on “Financials.”

EXHIBIT A: ARTHUR J. GALLAGHER & CO. 2022 LONG-TERM INCENTIVE PLAN

“Nonqualified Stock Option” shall mean an Option which is not an Incentive Stock Option.

“Option” shall mean a right to purchase shares of Common Stock at a specified exercise price, and includes both Incentive Stock Options and Nonqualified Stock Options.

“Participant” shall mean a person who has been granted an Award.

“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an Option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such Award, or, in the case of a Restricted Stock Unit Award, to the holder’s receipt of the shares of Common Stock subject to such Award or of payment with respect to such Award.

Such criteria and objectives shall include one or more of the following (or a derivation of the following) objective corporate-wide or subsidiary, division, operating unit or individual measures, stated in either absolute terms, per-share or relative terms, such as rates of growth or improvement, compared to a previous year’s results or to a designated comparison group, either based upon United States Generally Accepted Accounting Principles (“GAAP”) or non-GAAP financial results, individually or in combination, measured annually or cumulatively over a period of years: (i) the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time, (ii) earnings per share, (iii) return to stockholders, (iv) return on assets, (v) return on equity, (vi) revenue (organic or otherwise), (vii) cash flow, (viii) operating expense reduction, (ix) return on investment, (x) return on capital, (xi) operating margin, (xii) net income, (xiii) earnings before interest, taxes, depreciation, amortization and/or change in estimated earnout payables or net earnings (either before or after interest, taxes, depreciation, amortization and/or change in estimated earnout payables), (xiv) operating earnings, (xv) net cash provided by operations, and (xvi) strategic business criteria, consisting of one or more objectives such as (A) geographic business expansion goals, (B) cost targets, (C) customer satisfaction ratings, (D) reductions in errors and omissions, (E) reductions in lost business, (F) management of employment practices and employee benefits, (G) supervision of litigation, (H) satisfactory audit scores, (I) productivity, (J) efficiency, (K) ESG-related goals or objectives and (L) goals relating to acquisitions or divestitures, or any combination of the foregoing or any other performance criteria that the Committee deems appropriate. The Committee shall certify the extent to which any Performance Measure has been satisfied, and the amount payable as a result thereof.

In the sole discretion of the Committee, the Committee may provide that one or more adjustments shall be made to one or more of the Performance Measures. Such adjustments may include one or more of the following: (i) items related to a change in accounting principles or applicable law; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under GAAP; (ix) items attributable to any stock dividend, stock split, combination or exchange of shares occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments if such adjustment is timely approved in connection with the establishment of such Performance Measures; (xi) items relating to infrequently occurring corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items relating to any other infrequently occurring events or changes in applicable laws, accounting principles or business conditions; (xv) items relating to foreign currency impacts; or (xvi) items relating to such other events as the Committee shall deem appropriate.

“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an Award shall be measured and (ii) the conditions to vesting applicable to an Award shall remain in effect.

“Prior Plans” shall mean the Company’s 2014 Long-Term Incentive Plan and the Company’s 2017 Long-Term Incentive Plan.

“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Award” shall mean an Award of Restricted Stock under this Plan.

“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Unit Award” shall mean an Award of Restricted Stock Units under this Plan.

“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such Award, and (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.

“SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.

“Stock Award” shall mean a Restricted Stock Award or a Restricted Stock Unit Award.

“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.

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2022 PROXY STATEMENT

EXHIBIT A: ARTHUR J. GALLAGHER & CO. 2022 LONG-TERM INCENTIVE PLAN

“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or SAR.

“Tandem SAR” shall mean a SAR which is granted in tandem with, or by reference to, an Option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such Option, shares of Common Stock (which may be Restricted Stock) or cash with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such Option, or portion thereof, which is surrendered.

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

1.3 Administration. This Plan shall be administered by the Committee. Any one or a combination of the following Awards may be made under this Plan to eligible persons: (i) Options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options, (ii) SARs in the form of Tandem SARs or Free-Standing SARs, and (iii) Stock Awards in the form of Restricted Stock Awards or Restricted Stock Unit Awards. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each Award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs, the number of Restricted Stock Units subject to such an Award, the exercise price or base price associated with the Award, the time and conditions of exercise or settlement of the Award and all other terms and conditions of the Award, including, without limitation, the form of the Agreement evidencing the Award. Subject to the minimum vesting criteria set forth in Section 1.5(h), the Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding Options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock or Restricted Stock Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding Restricted Stock, Restricted Stock Units, Options shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding Award shall be deemed to be satisfied at the maximum or any other level. The Committee shall have the authority, subject to the terms of this Plan: (x) to interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and to make exceptions to the Plan or any such rules and regulations if the Committee determines, in good faith, that it is necessary to do so in light of extraordinary circumstances and for the benefit of the Company and so as to avoid unanticipated consequences or to address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of communications or natural catastrophe); (y) to impose, incidental to the grant of an Award, conditions with respect to the Award, such as limiting competitive employment or other activities or applying the Company’s compensation recovery policy, as amended from time to time; and (z) subject to Section 4.2, to amend any outstanding Awards; provided, however, that if any such amendment materially impairs a Participant’s rights with respect to such Award, such amendment shall also be subject to the Participant’s consent. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.

Subject to applicable law and applicable rules and regulations of the New York Stock Exchange, the Committee may delegate some or all of its power and authority hereunder to the Board or to the President and Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to the President and Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, non-management director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an Award to such an officer, non-management director or other person. In addition, the Committee may delegate any or all aspects of day to day administration of the Plan to one or more officers or employees of the Company or any Subsidiary, and/or to any one or more agents.

No member of the Board or Committee, and neither the President and Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the President and Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company or the Committee to assist in the administration of the Plan.

1.4 Eligibility. Participants in this Plan shall consist of such officers, other employees and non-management directors of the Company and its Subsidiaries as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time. For purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary.

1.5 Shares Available.

(a) Share Reserve. Subject to adjustment as provided in Section 4.7 and to all other limits set forth in this Section 1.5, the maximum aggregate number of shares of Common Stock that shall be available for issuance under this Plan is equal to the sum of: (i) 13,500,000; plus (ii) the number of shares of Common Stock subject to any awards granted under the Prior Plans that are outstanding as of the effective date of this Plan that are subsequently settled for cash, forfeited, expired, or for any reason are cancelled or terminated, without resulting in the issuance of shares of Common Stock.

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EXHIBIT A: ARTHUR J. GALLAGHER & CO. 2022 LONG-TERM INCENTIVE PLAN

Subject to adjustment as provided in Section 4.7 only to the extent that such calculation or adjustment will not affect the status of any Option intended to qualify as an Incentive Stock Option under Section 422 of the Code, the number of shares of Common Stock authorized for grant as Incentive Stock Options shall be no more than the total number of shares of Common Stock authorized for grant under the Plan under Section 1.5(a)(i).

(b) Counting Shares Against the Share Reserve. In general, any shares of Common Stock that are issued pursuant to Awards shall be counted against the share reserve limit in Section 1.5 as one (1) share of Common Stock for every one (1) share of Common Stock granted; provided, however, that any Shares in excess of 3,500,000 Shares issued pursuant to Full Value Awards shall be counted against the shares of Common Stock authorized for issuance under this Plan as 3.8 Shares for every one Share issued pursuant to such Award.

(c) Substitute Awards. Substitute Awards shall not reduce the shares of Common Stock authorized for grant under the Plan; nor shall shares of Common Stock subject to Substitute Awards be added to the shares available for Awards under the Plan as provided in Section 1.5(d) below. Additionally, to the extent permitted by NYSE Listed Company Manual Section 303A.08 or other applicable stock exchange rules, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio of formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for grant under the Plan (and shares of Common Stock subject to such Awards shall not be added to the shares available for Awards under the Plan as provided in Section 1.5(d) below); provided, that Awards using such available shares shall not be made after the date awards could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Subsidiaries immediately prior to such acquisition or combination.

(d) Shares Available for Subsequent Issuance. If any shares of Common Stock subject to an Award are forfeited, canceled, terminated or expire, or an Award is settled for cash (in whole or in part), the shares of Common Stock subject to such Award shall, to the extent of such forfeiture, cancelation, termination, expiration or cash settlement, again be available for Awards under the Plan (and shall not be counted against the limit set forth in the second paragraph of Section 1.5(a)).

(e) Shares Not Available for Subsequent Issuance. Notwithstanding anything in this Section 1.5 to the contrary, shares of Common Stock subject to an Award under this Plan (or the Prior Plans) may not be made available for issuance under this Plan if such shares are: (i) shares that were subject to a stock-settled SAR (or stock appreciation right granted under the Prior Plans) and were not issued upon the net settlement or net exercise of such SAR (or stock appreciation right granted under the Prior Plans); (ii) shares delivered to or withheld by the Company to pay the exercise price of an Option (or option granted under the Prior Plans); (iii) shares delivered to or withheld by the Company to pay withholding taxes related to an Award (or award granted under the Prior Plans); or (iv) shares repurchased on the open market with the proceeds of an Option (or option granted under the Prior Plans) exercise.

(f) Source of Shares. Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

(g) Non-Management Director Awards. The aggregate dollar value of equity-based (based on the grant date fair value of equity-based Awards) and cash compensation granted under this Plan or otherwise during any calendar year to any one non-management director shall not exceed $500,000; provided, however, that in the calendar year in which a non-management director first joins the Board of Directors or is first designated as Chairman of the Board of Directors or Lead Director, the maximum aggregate dollar value of equity-based and cash compensation granted to the Participant may be up to two hundred percent (200%) of the foregoing limit and the foregoing limit shall not count any Tandem SARs.

(h) Minimum Vesting. Further, and notwithstanding anything in the Plan to the contrary, (i) Restricted Stock and Restricted Stock Units granted under the Plan may not vest or be settled, in whole or in part, for Board members, prior to the one-year anniversary, and for all other participants, prior to the three-year anniversary, of the date of grant, except that the Committee may provide that Restricted Stock or Restricted Stock Units may vest or settle prior to such date in the event of the Participant’s death or disability or in the event of a Change in Control; (ii) Options granted under the Plan may not become exercisable, vest or be settled, in whole or in part, prior to the one-year anniversary of the date of grant, except that the Committee may provide that Options become exercisable, vest or settle prior to such date in the event of the Participant’s death or disability or in the event of a Change in Control; and (iii) SARs granted under the Plan may not become exercisable, vest or be settled, in whole or in part, prior to the one-year anniversary of the date of grant, except that the Committee may provide that SARs become exercisable, vest or settle prior to such date in the event of the Participant’s death or disability or in the event of a Change in Control. Notwithstanding the foregoing, up to 5% of the aggregate number of shares of Common Stock authorized for issuance under this Plan (as described in Section 1.5(a)) may be issued pursuant to Awards subject to any, or no, vesting conditions, as the Committee determines appropriate.

II. Stock Options and Stock Appreciation Rights

2.1 Stock Options. The Committee may, in its discretion, grant Options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee. Each Option, or portion thereof, that is not an Incentive Stock Option shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which Options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such Options shall constitute Nonqualified Stock Options.

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Options may be granted in addition to, or in lieu of, any other compensation payable to officers, other employees and non-management directors, and in all cases shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Number of Shares and Purchase Price. The number of shares of Common Stock subject to an Option and the purchase price per share of Common Stock purchasable upon exercise of the Option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of a Nonqualified Stock Option or an Incentive Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such Option; provided further, that if an Incentive Stock Option shall be granted to any person who, at the time such Option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option. Notwithstanding the foregoing, the purchase price per share of Common Stock purchasable upon exercise of an Option granted pursuant to a Substitute Award may be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant, provided, that such purchase price complies with the requirements of Sections 409A and 422 of the Code, as applicable.

(b) Option Period and Exercisability. The period during which an Option may be exercised shall be determined by the Committee; provided, however, that no Incentive Stock Option or Nonqualified Stock Option shall be exercised later than seven years after its date of grant; provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such Option shall not be exercised later than five years after its date of grant. The Committee may, in its discretion, determine that an Option is to be granted subject to performance criteria and may establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant of such Option or to the exercisability of all or a portion of such Option. The Committee shall determine whether an Option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. Each Option granted under the Plan shall become vested and exercisable, in whole or in part, at such time or times during its term as set forth in the Agreement and subject to the terms of this Plan. An exercisable Option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

(c) Method of Exercise. An Option may be exercised, to the extent then exercisable, (i) by delivering a written or electronic notice to the Company’s stock plan administrator in a form satisfactory to the Committee specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash or check, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company or stock plan administrator to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value equal to the amount necessary to satisfy such obligation, (D) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the Option, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the Option and (iii) by executing such documents as the Company may reasonably request. Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 4.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

(d) Automatic Exercise of In-the-Money Options. The Committee, in its sole discretion, may provide in an Award Agreement or otherwise that any Option outstanding on the Automatic Exercise Date with an exercise price per share of Common Stock that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by any Participant (or, in the event of Participant’s death, Participant’s personal representative or estate) or the Company be exercised on the Automatic Exercise Date if the Committee, in its sole discretion, determines that such exercise would provide economic benefit to the Participant after payment of the exercise price, applicable taxes and any expenses to effect the exercise. In the sole discretion of the Committee, payment of the exercise price of any Option may be made pursuant to Section 2.1(c)(i)(C) or (D), and the Company may deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 4.5(ii)(C) or (D). Unless otherwise determined by the Committee, this Section 2.1(d) shall not apply to an Option if the Participant of such Option incurs a termination of employment or service on or before the Automatic Exercise Date.

(e) No Stockholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or dividend equivalents in respect of an Option or any shares of Common Stock subject to an Option until the Participant has become the holder of record of such shares of Common Stock.

2.2 Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee. The Agreement relating to a SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Number of SARs and Base Price. The number of SARs subject to an Award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price

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of a Tandem SAR shall be the purchase price per share of Common Stock of the related Option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR. Notwithstanding the foregoing, the base price of a SAR granted pursuant to a Substitute Award may be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant, provided, that such base price complies with the requirements of Section 409A of the Code.

(b) Exercise Period and Exercisability. The period for the exercise of a SAR shall be determined by the Committee; provided, however, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related Option and no Free-Standing SAR shall be exercised later than 7 years after its date of grant. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of a SAR or to the exercisability of all or a portion of a SAR. The Committee shall determine whether a SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. Each SAR granted under the Plan shall become vested and exercisable, in whole or in part, at such time or times during its term as set forth in the Agreement and subject to the terms of this Plan. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If a SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the Shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d).

(c) Method of Exercise. A Tandem SAR may be exercised, to the extent then exercisable, (i) by delivering a written or electronic notice to the Company’s stock plan administrator in a form satisfactory to the Committee specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any Options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised, to the extent then exercisable, (A) by delivering a written or electronic notice to the Company’s stock plan administrator in a form satisfactory to the Committee specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request.

(d) Automatic Exercise of In-the-Money SARs. The Committee, in its sole discretion, may provide in an Award Agreement or otherwise that any SAR outstanding on the Automatic Exercise Date with a base price per share of Common Stock that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by any Participant (or, in the event of Participant’s death, Participant’s personal representative or estate) or the Company be exercised on the Automatic Exercise Date if the Committee, in its sole discretion, determines that such exercise would provide economic benefit to the Participant after payment of the applicable taxes and any expenses to effect the exercise. In the sole discretion of the Committee, the Company may deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 4.5(ii)(C) or (D). Unless otherwise determined by the Committee, this Section 2.2(d) shall not apply to a SAR if the Participant of such SAR incurs a termination of employment or service on or before the Automatic Exercise Date.

(e) No Stockholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or dividend equivalents in respect of a SAR or any shares of Common Stock subject to a SAR until the Participant has become the holder of record of such shares of Common Stock.

2.3 Termination of Employment or Service. All of the terms relating to the exercise, cancellation or other disposition of an Option or SAR upon a termination of employment or service with the Company of the holder of such Option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee, subject to the terms of the Plan.

2.4 Limitations.

(a) No Repricing. Notwithstanding anything in this Plan to the contrary and subject to Section 4.7, without the prior approval of the stockholders of the Company, the Committee will not amend or replace any previously granted Option or SAR in a transaction that constitutes a “repricing,” including, but not limited to: (i) the reduction, directly or indirectly, in the per-share price of an outstanding Option or SAR by amendment, cancellation or substitution; (ii) any action that is treated as a repricing under generally accepted accounting principles; (iii) at any time when the per-share price of an outstanding Option or SAR is above the Fair Market Value of a share of Common Stock, canceling (or accepting the surrender of) an Option or SAR in exchange for another Option, SAR or other equity security or cash (unless the cancellation and exchange occurs in connection with a merger, acquisition, or similar transaction); and (iv) any other action that is treated as a repricing by the rules or regulations of the New York Stock Exchange.

III. Stock Awards

3.1 Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award or a Restricted Stock Unit Award.

3.2 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

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(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such Award (i) if the holder of such Award remains continuously in the employment or service of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such Award (x) if the holder of such Award does not remain continuously in the employment or service of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

(c) Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 4.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such Award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 4.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such Award.

(d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such Award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock. Notwithstanding the foregoing, dividends credited/payable in connection with a Restricted Stock Award that is not yet vested shall be subject to the same restrictions and risk of forfeiture as the underlying Restricted Stock Award and shall not be paid until the underlying Restricted Stock Award vests.

3.3 Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such Award remains continuously in the employment or service of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such Award (x) if the holder of such Award does not remain continuously in the employment or service of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

(c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such Award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive dividend equivalents with respect to the number of shares of Common Stock subject to such Award. Prior to the settlement of a Restricted Stock Unit Award, the holder of such Award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such Award. Notwithstanding the foregoing, any dividend equivalents credited/payable in connection with a Restricted Stock Unit Award that is not yet vested shall be subject to the same restrictions and risk of forfeiture as the underlying Restricted Stock Unit Award and shall not be paid until the underlying Restricted Stock Unit Award vests.

3.4 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such Award upon a termination of employment or service with the Company of the holder of such Award, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee.

IV. General

4.1 Effective Date and Term of Plan. This Plan shall be submitted to the stockholders of the Company for approval at the Company’s 2022 annual meeting of stockholders and, if approved by the stockholders of the Company shall become effective as of the date of such approval. This Plan shall terminate as of the annual meeting of the Company’s stockholders that occurs during the year of the tenth anniversary of its effective date, unless terminated earlier by the Board, and Awards hereunder may be made at any time prior to the termination of this Plan; provided, however, that Incentive Stock Options may not be granted under the Plan after the tenth anniversary of the date of the Board’s original approval of this Plan (March 10, 2022). Termination of this Plan shall not affect the terms or conditions of any Award granted prior to termination. Upon the effective date of this Plan, no further Awards shall be granted under the Prior Plans.

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4.2 Amendment or Termination. The Board may amend or terminate this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including any rule of the New York Stock Exchange, or, if the Common Stock is not listed on the New York Stock Exchange, any rule of the principal national stock exchange on which the Common Stock is then traded; provided, however, that no amendment or termination may impair in any material way the rights of a holder of an outstanding Award without the consent of such holder; provided that no such consent shall be required if the Committee determines in its sole discretion and prior to the date of any Change in Control that such amendment either is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or is not reasonably likely to significantly diminish the benefits provided under such Award, or that any such diminishment has been adequately compensated.

4.3 Agreement. Each Award under this Plan shall be evidenced by a written or electronic Agreement setting forth the terms and conditions applicable to such Award. An Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, memoranda, notices or similar instruments as approved by the Committee. The Committee may provide that an Award shall not be valid until an Agreement is executed by the Company and the recipient of such Award (for clarity, electronic acceptance of an agreement in accordance with the procedures of the Company’s stock plan administrator shall be deemed to be execution) and, upon execution by each party and delivery of the Agreement to the Company within the time period specified by the Company, such Award shall be effective as of the effective date set forth in the Agreement.

4.4 Non-Transferability. Each Award may not be sold, transferred for value, pledged, assigned, or otherwise alienated or hypothecated by a Participant other than by will or the laws of descent and distribution, and each Option or SAR shall be exercisable only by the Participant during his or her lifetime. Notwithstanding the foregoing, outstanding Options may be exercised following the Participant’s death by the Participant’s beneficiaries or as permitted by the Committee. Further, and notwithstanding the foregoing, to the extent permitted by the Committee, the person to whom an Award is initially granted (the “Grantee”) may transfer an Award to any “family member” of the Grantee (as such term is defined in Section A.1(a)(5) of the General Instructions to Form S-8 under the Securities Act of 1933, as amended (“Form S-8”)), to trusts solely for the benefit of such family members and to partnerships in which such family members and/or trusts are the only partners; provided that, (i) as a condition thereof, the transferor and the transferee must execute a written agreement containing such terms as specified by the Administrator, and (ii) the transfer is pursuant to a gift or a domestic relations order to the extent permitted under the General Instructions to Form S-8. Except to the extent specified otherwise in the agreement the Administrator provides for the Grantee and transferee to execute, all vesting, exercisability and forfeiture provisions that are conditioned on the Grantee’s continued employment or service shall continue to be determined with reference to the Grantee’s employment or service (and not to the status of the transferee) after any transfer of an Award pursuant to this Section 4.4, and the responsibility to pay any taxes in connection with an Award shall remain with the Grantee notwithstanding any transfer other than by will or intestate succession.

4.5 Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an Award made hereunder, payment by the holder of such Award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such Award. An Agreement may provide that (i) the Company shall withhold or direct the withholding of whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value equal to the amount necessary to satisfy any such obligation, or withhold or direct the withholding of an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company, (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company or its stock plan administrator to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation, (D) in the case of the exercise of an Option or a SAR and except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the Award.

4.6 Restrictions on Shares. Each Award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any Award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

4.7 Adjustment. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a regular cash dividend, the number and class of securities available under this Plan, the number and class of securities subject to each outstanding Option and the purchase price per security, the terms of each outstanding SAR, the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award, including the number and class of securities subject thereto, the maximum number of securities with respect to which Options or SARs may be granted during any fiscal year of the Company to any one grantee, and the maximum number of shares of Common Stock that may be awarded during any fiscal year of the Company to any one grantee pursuant to a Stock Award that is subject to Performance Measures granted during any fiscal year of the Company to any one grantee shall be equitably adjusted by the Committee. The decision of the Committee regarding any such adjustment shall be final, binding and

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2022 PROXY STATEMENT

EXHIBIT A: ARTHUR J. GALLAGHER & CO. 2022 LONG-TERM INCENTIVE PLAN

conclusive. Adjustments need not be uniform between different Awards or different types of Awards. If any such adjustment would result in a fractional security being (a) available under this Plan, such fractional security shall be disregarded, or (b) subject to an Award under this Plan, the Company shall pay the holder of such Award, in connection with the first vesting, exercise or settlement of such Award, in whole or in part, occurring after such adjustment, an amount in cash determined by multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the vesting, exercise or settlement date over (B) the exercise or base price, if any, of such Award.

4.8 Change in Control.

(a) The Committee may through the terms of the Award or otherwise provide that any or all of the following shall occur, either immediately upon the Change in Control, or upon termination or constructive termination of the Participant’s employment or service within six (6) months prior to or twenty-four (24) months following a Change in Control: (a) all outstanding Options and SARs shall immediately become exercisable in full, (b) the Restriction Period applicable to any outstanding Restricted Stock Award or Restricted Stock Unit Award shall lapse, (c) the Performance Period applicable to any outstanding Award shall lapse, and/or (d) the Performance Measures applicable to any outstanding Award shall be deemed to be satisfied at their target levels or, if greater, on a pro rata basis based on actual achievement as of the date of the Change in Control; provided, however, that notwithstanding anything herein to the contrary, in no event shall any accelerated vesting of an award in connection with a Change in Control be effective unless the Change in Control is consummated. The Board (as constituted prior to such Change in Control) may, in its discretion: (1) require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding Award, with an appropriate and equitable adjustment to such Award as shall be determined by the Board in accordance with Section 4.7; and/or (2) require outstanding Awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (i) in the case of an Option or a SAR, the number of shares of Common Stock then subject to the portion of such Option or SAR surrendered multiplied by the excess, if any, of the highest per share price offered to holders of Common Stock in any transaction whereby the Change in Control takes place, over the purchase price or base price per share of Common Stock subject to such Option or SAR, and (ii) in the case of a Stock Award, the number of shares of Common Stock then subject to the portion of such award surrendered multiplied by the highest per share price offered to holders of Common Stock in any transaction whereby the Change in Control takes place; (B) shares of capital stock of the corporation resulting from such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above. The Board need not take the same action or actions with respect to all Awards or portions of Awards with respect to all participants. If, in connection with a Change in Control, no provision is made for the exercise, payment or lapse of conditions or restrictions on an Award, or other procedure whereby a Participant may realize the full benefit of the Award, the Committee may, through the terms of the Award or otherwise, provide for a conditional exercise, payment or lapse of conditions or restrictions on an Award, which shall only be effective if such Change in Control is consummated.

(b) For purposes of this Plan, a “Change in Control” shall occur (a) upon the consummation of any transaction pursuant to which any person or group, as defined in Sections 13(d) and 14(d)(2) of the Exchange Act, as amended, is or becomes the beneficial owner, directly or indirectly of securities of the Company representing 50 percent or more of the combined voting power of the Company’s outstanding securities then entitled to vote for the election of directors; or (b) if during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved cease for any reason to constitute at least a majority thereof.

If and to the extent that any Award is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A of the Code and such Award is payable to a participant upon a Change in Control, then no payment shall be made pursuant to such Award unless such Change in Control constitutes a “change in the ownership of the corporation,” “a change in effective control of the corporation,” or “a change in the ownership of a substantial portion of the assets of the corporation” within the meaning of Section 409A of the Code; provided that if such Change in Control does not constitute a “change in the ownership of the corporation,” “a change in effective control of the corporation,” or “a change in the ownership of a substantial portion of the assets of the corporation” within the meaning of Section 409A of the Code, then the Award shall still fully vest upon such Change in Control, but shall be payable upon the original schedule contained in the Award.

4.9 Deferrals. The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any Award (other than Awards of Incentive Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of Awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.

4.10 No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any Award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment or service of any person at any time without liability hereunder.

4.11 Designation of Beneficiary. To the extent permitted by the Committee, a participant may, by completing and returning the appropriate form provided by the Company or its stock plan administrator, name a beneficiary or beneficiaries to receive any payment to which

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A-9

EXHIBIT A: ARTHUR J. GALLAGHER & CO. 2022 LONG-TERM INCENTIVE PLAN

such participant may become entitled under this Plan in the event of his or her death. To the extent permitted by the Committee, a participant may change his or her beneficiary or beneficiaries from time to time by submitting a new form in accordance with the procedures established by the Company and/or its stock plan administrator. If a participant does not or is not permitted to designate a beneficiary, or if no designated beneficiary is living on the date any amount becomes payable under this Plan, such payment will be made to the legal representatives of his or her estate, which will be deemed to be his or her designated beneficiary under this Agreement.

4.12 Recovery Policy. Notwithstanding any other provisions in the Plan, any Award which is subject to a recovery policy under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any recovery policy adopted by the Company, including a policy adopted by the Company in response to any such law, government regulation or stock exchange listing requirement). To the extent any such recovery policy requires the repayment of incentive-based compensation received by a Participant, whether paid pursuant to an Award granted under this Plan or any other plan of incentive-based compensation maintained in the past or adopted in the future by the Company, by accepting an Award under this Plan, the Participant agrees to the repayment of such amounts to the extent required by such policy and applicable law.

4.13 Section 409A. (a) The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Section 409A of the Code to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation 1.409A-1(b)(4), the exclusion applicable to stock options, stock appreciation rights and certain other equity-based compensation under Treasury Regulation 1.409A-1(b)(5), or otherwise. To the extent Section 409A of the Code is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan comply with the requirements of Section 409A of the Code. Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions.

(b) Notwithstanding any other provision of the Plan to the contrary, the Board, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan pursuant to Section 4.2 and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to Awards granted under the Plan.

(c) To the extent any payment under this Plan is considered deferred compensation subject to the restrictions contained in Section 409A of the Code, and to the extent necessary to avoid the imposition of taxes under Section 409A of the Code, such payment may not be made to a specified employee (as determined in accordance with a uniform policy adopted by the Company with respect to all arrangements subject to Section 409A of the Code) upon separation from service (within the meaning of Section 409A of the Code) before the date that is six months after the specified employee’s separation from service (or, if earlier, the specified employee’s death). Any payment that would otherwise be made during this period of delay shall be accumulated and paid on the sixth month plus one day following the specified employee’s separation from service (or, if earlier, as soon as administratively practicable after the specified employee’s death).

4.14 Governing Law. This Plan, each Award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

4.15 Non-U.S. Employees. Without amending this Plan, the Committee may grant Awards to eligible persons who are non-U.S. nationals on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.

4.16 Data Protection. By participating in the Plan, a Participant consents to the collection, processing, transmission and storage by the Company in any form whatsoever, of any data of a professional or personal nature which is necessary for the purposes of introducing and administering the Plan. The Company may share such information with any Subsidiary, the trustee of any employee benefit trust, its registrars, trustees, brokers, other third-party administrator or any Person who obtains control of the Company or acquires the Company or a Subsidiary which employs the Participant.

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2022 PROXY STATEMENT

Exhibit B:A: Information Regarding Non-GAAP Measures

For 2021,2023, the executive compensation performance measures used by the Compensation Committee were adjusted EBITDAC, adjusted EBITDAC per share, and adjusted revenue, in each case for our combined brokerage and risk management segments. The Committee believes that these measures align with the key components of our long-term strategy and drive our long-term stock price performance. Please see page 2725 in the body of this Proxy Statement for detailed information regarding these measures.adjusted EBITDAC as used by the Committee for executive compensation purposes. In the context of 20212023 compensation decisions, the Committee also considered our adjusted EBITDAC margin and organic revenue performance. For these measures, definitions and GAAP reconciliations are set forth below.

The measures discussed below are not in accordance with, or are an alternative to, the GAAP information provided in this Proxy Statement. We believe that these presentations provide useful information to management, analysts and investors regarding financial and business trends relating to Gallagher’s results of operations and financial condition. Our industry peers may provide similar supplemental non-GAAP information related to adjusted EBITDAC margin and organic revenues, although they may not use the same or comparable terminology and may not make identical adjustments. For example, our organic revenue is calculated differently than some of our industry peers. The non-GAAP information we provide should be used in addition to, but not as a substitute for, the GAAP information provided in this Proxy Statement. Certain reclassifications have been made to the prior year amounts in order to conform them to the current year presentation.

Adjusted EBITDAC Margin – adjusted EBITDAC margin is presented to improve the comparability of our results between periods by eliminating the impact of items that have a high degree of variability.

•

EBITDAC – We define this measure as net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables.

•

Adjusted EBITDAC – We define this measure as EBITDAC adjusted to exclude net gains or losses on divestitures, acquisition integration costs, workforce and lease termination related charges, acquisition-related adjustments and the period-over-period impact of foreign currency translation, as applicable. The amounts excluded with respect to foreign currency translation are calculated by applying current year foreign exchange rates to the same periods in the prior year.

Please note that “adjusted EBITDAC” as defined on page 2725 in the context of annual cash incentives and performance share unitsPSUs and as used throughout this proxy statement and the letter from our CEO is the same as this definition, except that it does not exclude acquisition integration costs and other acquisition-related adjustments.

than de minimis amounts included therein related to severance costs.

•

Adjusted EBITDAC margin – We define this measure as adjusted EBITDAC divided by total adjusted revenues (for the brokerage segment) and total adjusted revenues before reimbursements (for the risk management segment). See table on the next page.

page A-3.

Organic Revenues – For the brokerage segment, organic change in base commission and fee revenues, supplemental revenues and contingent revenues exclude the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations and program repricing in each year presented. These revenues are excluded from organic revenues in order to help interested persons analyze the revenue growth associated with the operations that were a part of Gallagher in both the current and prior periods. In addition, organic change in base commission and fee revenues, supplemental revenues and contingent revenues excludes the period-over-period impact of foreign currency translation.translation to improve the comparability of its results between periods. For the risk management segment, organic change in fee revenues excludes the first twelve months of fee revenues generated from acquisitions and the fee revenues related to divested operations disposed of in each year presented. In addition, change in organic growth excludes the period-over-period impact of foreign currency translation to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability or are due to the limited-time nature of these revenue sources.periods.

These revenue items are excluded from organic revenues in order to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that are expected to continue in the current year and beyond.beyond, as well as eliminating the impact of the items that have a high degree of variability. We have historically viewed organic revenue growth as an important indicator when assessing and evaluating the performance of our brokerage and risk management segments. We also believe that using this non-GAAP measure allows readers of our financial statements to measure, analyze and compare the growth from our brokerage and risk management segments in a meaningful and consistent manner.

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img134299666_7.jpg 

2022 PROXY STATEMENT

B-1

EXHIBIT B: INFORMATION REGARDING NON-GAAP MEASURES

Exhibit A: Information Regarding Non-GAAP Measures

All figures are unaudited and in millions except percentages

ADJUSTED REVENUE AND ADJUSTEDAdjusted Revenue and Adjusted EBITDAC MARGINMargin

 

 

 

 

 

 

ADJUSTED REVENUE

        2021        

 

        2020        

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage – Revenue

 $5,967.5 $5,167.1

 

$

8,637.2

 

 

 

$

7,303.8

 

 

 

 

 

 

 

 

 

Net gains (losses) on divestitures

 (18.8) 5.8

 

 

(9.6

)

 

 

 

(12.1

)

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 — 110.1

 

 

 

 

 

 

(25.1

)

 

 

 

 

 

 

 

 

 

Brokerage – Adjusted Revenue

 $5,948.7 $5,283.0

 

$

8,627.6

 

 

 

$

7,266.6

 

 

 

 

 

 

 

 

 

 

Risk Management – Revenue

 $   967.6 $   821.7

 

 

 

 

 

 

 

Risk Management – Revenue before Reimbursements

 

$

1,287.6

 

 

 

$

1,092.6

 

 

 

 

 

 

 

 

 

Net gains (losses) on divestitures

 (0.1) —

 

 

(0.4

)

 

 

 

(0.9

)

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 — 11.4

 

 

—

 

 

 

 

(4.9

)

 

 

 

 

 

 

 

 

 

Risk Management – Adjusted Revenue

 $   967.5 $   833.1

 

$

1,287.2

 

 

 

$

1,086.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Risk Management – Adjusted Revenue

 $6,916.2 $6,116.1

 

$

9,914.8

 

 

 

$

8,353.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDAC – Brokerage

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

1,169.4

 

 

 

$

1,201.8

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

401.6

 

 

 

 

394.7

 

 

 

 

 

 

 

 

 

Depreciation

 

 

124.4

 

 

 

 

103.6

 

 

 

 

 

 

 

 

 

Amortization

 

 

523.6

 

 

 

 

448.7

 

 

 

 

 

 

 

 

 

Change in estimated acquisition earnout payables

 

 

376.8

 

 

 

 

90.4

 

 

 

 

 

 

 

 

 

EBITDAC

 

$

2,595.8

 

 

 

$

2,239.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDAC – Risk Management

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

154.0

 

 

 

$

115.8

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

55.3

 

 

 

 

41.4

 

 

 

 

 

 

 

 

 

Depreciation

 

 

35.9

 

 

 

 

37.8

 

 

 

 

 

 

 

 

 

Amortization

 

 

7.7

 

 

 

 

6.2

 

 

 

 

 

 

 

 

 

Change in estimated acquisition earnout payables

 

 

0.5

 

 

 

 

(7.4

)

 

 

 

 

 

 

 

 

EBITDAC

 

$

253.4

 

 

 

$

193.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDAC – Brokerage and Risk Management

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

1,323.4

 

 

 

$

1,317.6

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

456.9

 

 

 

 

436.1

 

 

 

 

 

 

 

 

 

Depreciation

 

 

160.3

 

 

 

 

141.4

 

 

 

 

 

 

 

 

 

Amortization

 

 

531.3

 

 

 

 

454.9

 

 

 

 

 

 

 

 

 

Change in estimated acquisition earnout payables

 

 

377.3

 

 

 

 

83.0

 

 

 

 

 

 

 

 

 

EBITDAC

 

$

2,849.2

 

 

 

$

2,433.0

 

 

 

 

 

 

 

 

 

EBITDAC – Brokerage

        2021        

 

        2020        

 

  

Net earnings

 

$1,016.6

 

$   866.0

Provision for income taxes

 

328.9

 

276.3

Depreciation

 

87.8

 

73.5

Amortization

 

407.6

 

411.3

Change in estimated acquisition earnout payables

 

116.3

 

(29.7

)

  

EBITDAC

 

$1,957.2

 

$1,597.4

EBITDAC – Risk Management

        2021        

 

        2020        

 

  

Net earnings

 

$  89.5

 

$  66.9

Provision for income taxes

 

30.6

 

22.5

Depreciation

 

46.2

 

49.4

Amortization

 

7.5

 

6.0

Change in estimated acquisition estimated payables

 

3.3

 

(3.2

)

  

EBITDAC

 

$177.1

 

$141.6

EBITDAC – Brokerage and Risk Management

        2021        

 

        2020        

 

  

Net earnings

 

$1,106.1

 

$   932.9

Provision for income taxes

 

359.5

 

298.8

Depreciation

 

134.0

 

122.9

Amortization

 

415.1

 

417.3

Change in estimated acquisition estimated payables

 

119.6

 

(32.9

)

  

EBITDAC

 

$2,134.3

 

$1,739.0

2024 PROXY STATEMENT

A-2

Exhibit A: Information Regarding Non-GAAP Measures

ADJUSTED EBITDAC

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage – EBITDAC

 

 

$

2,595.8

 

 

 

$

2,239.2

 

 

 

 

 

 

 

 

 

 

 

 

Net gains (losses) on divestitures

 

 

 

(9.6

)

 

 

 

(12.1

)

 

 

 

 

 

 

 

 

 

 

 

Acquisition integration

 

 

 

243.7

 

 

 

 

167.9

 

 

Workforce and lease termination

 

 

 

63.4

 

 

 

 

48.9

 

 

Acquisition related adjustments

 

 

 

69.3

 

 

 

 

46.8

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

(18

)

 

 

 

 

 

 

 

 

 

 

 

Brokerage – Adjusted EBITDAC

 

 

$

2,962.6

 

 

 

$

2,472.5

 

 

 

 

 

 

 

 

 

 

 

 

Risk Management – EBITDAC

 

 

$

253.4

 

 

 

$

193.8

 

 

 

 

 

 

 

 

 

 

 

 

Net gains (losses) on divestitures

 

 

 

(0.4

)

 

 

 

(0.9

)

 

 

 

 

 

 

 

 

 

 

 

Acquisition integration

 

 

 

1.0

 

 

 

 

6.4

 

 

Workforce and lease termination

 

 

 

3.4

 

 

 

 

0.4

 

 

Acquisition related adjustments

 

 

 

0.5

 

 

 

 

1.8

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

(0.9

)

 

 

 

 

 

 

 

 

 

 

 

Risk Management – Adjusted EBITDAC

 

 

$

257.9

 

 

 

$

200.6

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Risk Management – Adjusted EBITDAC

 

 

$

3,220.5

 

 

 

$

2,673.1

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Risk Management – Adjusted Revenue

 

 

$

9,914.8

 

 

 

$

8,353.4

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Risk Management – Adjusted EBITDAC Margin

 

 

 

32.5

%

 

 

 

32.0

%

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED EBITDAC (as defined for Annual Cash Incentives and PSUs)

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage – ADJUSTED EBITDAC

 

 

$

2,962.6

 

 

 

$

2,472.5

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition integration (other than de minimis amounts included therein
related to severance costs)

 

 

 

(241.5

)

 

 

 

(167.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 

 

 

4.6

 

 

 

 

3.7

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage – Adjusted EBITDAC (as defined for Annual Cash Incentives and PSUs)

 

 

$

2,725.7

 

 

 

$

2,308.5

 

 

 

 

 

 

 

 

 

 

 

 

Risk Management – ADJUSTED EBITDAC

 

 

$

257.9

 

 

 

$

200.6

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition integration (other than de minimis amounts included therein
related to severance costs)

 

 

 

(1.0

)

 

 

 

(1.8

)

 

 

 

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Risk Management – Adjusted EBITDAC (as defined for Annual Cash Incentives and PSUs)

 

 

$

256.9

 

 

 

$

198.8

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage and Risk Management – Adjusted EBITDAC (as defined for Annual Cash Incentives and PSUs)

 

 

$

2,982.6

 

 

 

$

2,507.3

 

 

 

 

 

 

 

 

 

 

 

 

A-3

img134299666_7.jpg 

Exhibit A: Information Regarding Non-GAAP Measures

Organic Revenue Growth

Brokerage – Organic Revenue Growth

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Commissions and fees, as reported

 

 

$

7,750.0

 

 

 

$

6,664.3

 

 

 

 

 

 

 

 

 

 

 

 

Less commission and fees from acquisitions

 

 

 

(531.8

)

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Less divested operations

 

 

 

—

 

 

 

 

(10.5

)

 

 

 

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

(21.8

)

 

 

 

 

 

 

 

 

 

 

 

Organic base commissions and fees

 

 

$

7,218.2

 

 

 

$

6,632.0

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental revenues, as reported

 

 

$

314.2

 

 

 

$

284.7

 

 

 

 

 

 

 

 

 

 

 

 

Less supplemental revenues from acquisitions

 

 

 

(4.9

)

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

(0.4

)

 

 

 

 

 

 

 

 

 

 

 

Organic supplemental revenues

 

 

$

309.3

 

 

 

$

284.3

 

 

 

 

 

 

 

 

 

 

 

 

Contingent revenues, as reported

 

 

$

235.3

 

 

 

$

207.3

 

 

 

 

 

 

 

 

 

 

 

 

Less contingent revenues from acquisitions

 

 

 

(8.9

)

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

(1.0

)

 

 

 

 

 

 

 

 

 

 

 

Organic contingent revenues

 

 

$

226.4

 

 

 

$

206.3

 

 

 

 

 

 

 

 

 

 

 

 

Organic base commissions and fees, supplemental revenues and contingent revenues

 

 

$

7,753.9

 

 

 

$

7,122.6

 

 

 

 

 

 

 

 

 

 

 

 

Organic change in base commissions and fees, supplemental revenues and contingent revenues

 

 

 

8.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Management – Organic Revenue Growth

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Fees

 

 

$

1,246.1

 

 

 

$

1,075.8

 

 

 

 

 

 

 

 

 

 

 

 

International performance bonus fees

 

 

 

2.2

 

 

 

 

15.0

 

 

 

 

 

 

 

 

 

 

 

 

Fees as reported

 

 

$

1,259.7

 

 

 

$

1,090.8

 

 

 

 

 

 

 

 

 

 

 

 

Less fees from acquisitions

 

 

 

(5.5

)

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Less divested operations

 

 

 

—

 

 

 

 

(3.2

)

 

 

 

 

 

 

 

 

 

 

 

Levelized foreign currency translation

 

 

 

—

 

 

 

 

(4.8

)

 

 

 

 

 

 

 

 

 

 

 

Organic fees

 

 

$

1,254.2

 

 

 

$

1,082.8

 

 

 

 

 

 

 

 

 

 

 

 

Organic change in fees

 

 

 

15.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined Brokerage and Risk Management – Organic Revenue Growth

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Combined organic revenue

 

 

$

9,008.1

 

 

 

$

8,205.4

 

 

 

 

 

 

 

 

 

 

 

 

Organic change in revenue

 

 

 

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024 PROXY STATEMENT

A-4

Exhibit B: Resources

Exhibit B: Resources*

Annual Meeting

B-2

2022 PROXY STATEMENT

EXHIBIT B: INFORMATION REGARDING NON-GAAP MEASURES

ADJUSTED EBITDAC

        2021        

 

        2020        

 

  

Brokerage – EBITDAC

 

$1,957.2

 

$1,597.4

Net gains (loss) on divestitures

 

(18.8

)

 

5.8

Acquisition integration

 

31.7

 

25.1

Workforce and lease termination

 

20.6

 

43.9

Acquisition related adjustments

 

27.4

 

19.2

Levelized foreign currency translation

 

—

 

36.2

  

Brokerage – Adjusted EBITDAC

 

$2,018.1

 

$1,727.6

  

Risk Management – EBITDAC

 

$   177.1

 

$   141.6

Net gains (losses) on divestitures

 

(0.1

)

 

—

Workforce and lease termination

 

7.1

 

7.9

Acquisition related adjustments

 

0.4

 

—

Levelized foreign currency translation

 

—

 

2.0

  

Risk Management – Adjusted EBITDAC

 

$   184.5

 

$   151.5

  

Brokerage and Risk Management – Adjusted EBITDAC

 

$2,202.6

 

$1,879.1

  

Brokerage and Risk Management – Adjusted Revenue

 

$6,916.2

 

$6,116.1

  

Brokerage and Risk Management – Adjusted EBITDAC Margin

 

31.8%

 

 

30.7%

 

ORGANIC REVENUE GROWTH

Brokerage – Organic Revenue Growth

        2021        

 

        2020        

 

Commissions and fees, as reported

 

$5,429.2

 

$4,728.8

Less commission and fees from acquisitions

 

(255.9

)

 

—

Less divested operations

 

—

 

(13.7

)

Levelized foreign currency translation

 

—

 

97.3

Organic base commissions and fees

 

$5,173.3

 

$4,812.4

  

Supplemental revenues, as reported

 

$   248.7

 

$   221.9

Less supplemental revenues from acquisitions

 

(3.1

)

 

—

Levelized foreign currency translation

 

—

 

5.5

Organic supplemental revenues

 

$   245.6

 

$   227.4

  

Contingent revenues, as reported

 

$   188.0

 

$   147.0

Less contingent revenues from acquisitions

 

(3.3

)

 

—

Levelized foreign currency translation

 

—

 

1.6

Organic contingent revenues

 

$   184.7

 

$   148.6

  

Organic base commissions and fees, supplemental revenues and contingent revenues

 

$5,603.6

 

$5,188.4

  

Organic change in base commissions and fees, supplemental revenues and contingent revenues

 

8.0%

 

 

 

 

 

 

 

Risk Management – Organic Revenue Growth

 

        2021        

 

        2020        

 

  

Fees

 

$954.0

 

$815.3

International performance bonus fees

 

13.2

 

5.7

Fees as reported

 

967.2

 

821.0

Less fees from acquisitions

 

(33.3

)

 

—

Levelized foreign currency translation

 

—

 

11.4

Organic fees

 

$933.9

 

$832.4

  

Organic change in fees

 12.2% 

 

 

 

 

 

 

Combined Brokerage and Risk Management – Organic Revenue Growth

        2021        

 

        2020        

 

  

Combined organic revenue

 

$6,537.5

 

$6,020.8

  

Organic change in revenue

 

8.6%

 

 

 

 

 

 

 

LOGO

Proxy Statement

2022 PROXY STATEMENT

B-3

Exhibit C: Resources*

Annual Meeting

Proxy Statement

www.ajg.com/ir > Financial Reports > 20222024 Proxy Statement

Annual Report

www.ajg.com/ir > Financial Reports > 20212023 Annual Report

Board of Directors

Board of Directors

www.ajg.com/ir > Corporate Governance > Board of Directors

Board Committee Members

www.ajg.com/ir > Corporate Governance > Board Committee Members

Composition

Audit Committee Charter

www.ajg.com/ir > Corporate Governance > Audit Committee Charter

Compensation Committee Charter

www.ajg.com/ir > Corporate Governance > Compensation Committee Charter

Nominating/Governance Committee Charter

www.ajg.com/ir > Corporate Governance > Nominating/Governance Committee Charter

Risk and Compliance Committee Charter

www.ajg.com/ir > Corporate Governance > Risk and Compliance Committee Charter

Governance Documents

By-laws

By-Laws

www.ajg.com/ir > Corporate Governance > By-laws

By-Laws

Governance Guidelines

www.ajg.com/ir > Corporate Governance > Governance Guidelines

Global Standards of Business Conduct

www.ajg.com/ir > Corporate Governance > Global Standards of Business Conduct

Other Resources

The Gallagher Way

www.ajg.com/about-us/the-gallagher-way/

Sustainability Report

Impact Report

www.ajg.com/ir > ESG > SustainabilityImpact Report

Climate Disclosure Report

SASB Disclosures

www.ajg.com/ir > ESG> Climate Disclosure ReportESG > SASB Disclosures

*

The inclusion of our website address in this Proxy Statement does not include or incorporate by reference the information on our website, including the documents referenced above, into this Proxy Statement.

* The inclusion of our website address in this Proxy Statement does not include or incorporate by reference the information on our website, including the documents referenced above, into this Proxy Statement.

LOGO

B-1

img134299666_7.jpg 

2022 PROXY STATEMENT

C-1

img134299666_38.jpg 

LOGO

LOGOimg134299666_39.jpg 

GGallagher ARTHUR J. GALLAGHER & CO. 2850 GOLF ROAD ROLLING MEADOWS, IL 60008-4050 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Daylight Time on May 9, 20226, 2024 (other than with respect to shares held in The Arthur J. Gallagher & Co. Employees’Employees' 401(k) Savings and Thrift Plan). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/AJG2022AJG2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Daylight Time on May 9, 20226, 2024 (other than with respect to shares held in The Arthur J. Gallagher & Co. Employees’Employees' 401(k) Savings and Thrift Plan). Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The Arthur J. Gallagher & Co. Employees’ 401(k) Savings and Thrift Plan Vote by 5:00 P.M. Eastern Daylight Time on May 5, 2022 for shares held in The Arthur J. Gallagher & Co. Employees’ 401(k) Savings and Thrift Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D72621-P66078 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ARTHUR J. GALLAGHER & CO. Company Proposals The Board of Directors recommends you vote FOR each of the nominees listed in proposal 1 below: 1. Election of Directors For Against Abstain 1a. Sherry S. Barrat 1b. William L. Bax 1c. Teresa H. Clarke 1d. D. John Coldman 1e. J. Patrick Gallagher, Jr. 1f. David S. Johnson 1g. Kay W. McCurdy 1h. Christopher C. Miskel 1i. Ralph J. Nicoletti 1j. Norman L. Rosenthal The Board of Directors recommends you vote FORR proposals 2 3 and 4. For Against Abstain 2. Approval of the Arthur J. Gallagher & Co. 2022 Long-Term Incentive Plan, Including Approval of 13,500,000 Shares Authorized for Issuance Thereunder. 3. Ratification of the Appointment of Ernst & Young LLP as our Independent Auditor for the fiscal year ending December 31, 2022. 4.2024. For Against Abstain 0 0 0 1d. John Coldman O 0 3. Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers. 0 0 0 1e. Pat Gallagher 0 0 1f. David Johnson 0 0 1g. Chris Miskel 0 0 1h. Ralph Nicoletti O 0 1i. Norman Rosenthal 0 0 0 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

LOGOimg134299666_40.jpg 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of 20222024 Annual Meeting and Proxy Statement and 20212023 Annual Report are available at www.materials.proxyvote.com/363576.www.proxyvote.com. We will be conducting our 20222024 Annual Meeting of Stockholders virtually at www.virtualshareholdermeeting.com/AJG2022. D72622-P66078AJG2024. V34947-P05189 ARTHUR J. GALLAGHER & CO. Annual Meeting of Stockholders May 10, 20227, 2024 9:00 AM CDT This proxy is solicited by the Board of Directors The undersigned hereby appoints J. Patrick (Pat) Gallagher, Jr. and Walter D. Bay, each of whom is an officer of Arthur J. Gallagher & Co., or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote all of the shares of Common Stock of ARTHUR J. GALLAGHER & CO. that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 AM, CDT on May 10, 2022,7, 2024, virtually at www.virtualshareholdermeeting.com/AJG2022,AJG2024, and any adjournment or postponement thereof. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting of Stockholders or any adjournment or postponement thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting of Stockholders by a reasonable time before the proxy solicitation was made or for the election of a person to the Board of Directors if any nominee named in Proposal 1 becomes unable to serve or for good cause will not serve). This proxy, when properly executed, will be voted in the manner directed herein. If the proxy is properly executed but no such direction is made, this proxy will be voted in accordance with the Board of Directors’Directors' recommendations. For participants in The Arthur J. Gallagher & Co. Employees’Employees' 401(k) Savings and Thrift Plan, if you do not provide voting instructions, the trustee will vote the shares that are deemed to be in the account in The Arthur J. Gallagher & Co. Employees’Employees' 401(k) Savings and Thrift Plan in the same proportion as The Arthur J. Gallagher & Co. Employees’Employees' 401(k) Savings and Thrift Plan shares of other participants for which the trustee has received proper voting instructions. The votes by The Arthur J. Gallagher & Co. Employees’Employees' 401(k) Savings and Thrift Plan participants must be received no later than by 5:00 P.M. Eastern Daylight Time on May 5, 2022.2, 2024. Continued and to be signed on reverse side