Form 4: Gallagher CFO Howell Receives Equity Compensation

Arthur J. Gallagher & Co.'s VP & CFO, Douglas K. Howell, received 35,739 shares of common stock from deferred equity compensation.

Summary

• Douglas K. Howell, Vice President and Chief Financial Officer of Arthur J. Gallagher & Co. (AJG), acquired 35,739.4628 shares of common stock.
• The transaction occurred on July 31, 2025, and represents the distribution of notional stock units previously deferred by Mr. Howell.
• These notional stock units were part of the Arthur J. Gallagher & Co. Supplemental Savings and Thrift Plan.
• The acquisition price for these shares was $0, as it was a conversion of previously earned and deferred compensation.
• Following this transaction, Mr. Howell directly beneficially owns 117,776.7558 shares of common stock.
• Additionally, Mr. Howell has indirect beneficial ownership of 3,165 shares through his spouse and 418.691 shares through his Gallagher 401(k) plan account.
• Mr. Howell disposed of 35,739.4628 notional stock units, converting them into common stock.
• After the transaction, 177,994.9726 notional stock units remain beneficially owned by Mr. Howell.

Sentiment

Score: 7

Explanation: This is a routine, expected transaction related to executive compensation, indicating the company is fulfilling its obligations and aligning executive interests with shareholders. No negative implications.

Positives

• The transaction represents the company fulfilling its compensation obligations to a key executive.
• The distribution of equity compensation aligns the financial interests of the Chief Financial Officer with those of the shareholders.

Future Outlook

Portions of the remaining notional stock units are scheduled to be paid to the reporting person in shares of common stock in July of 2024, 2025, 2026, 2028, and 2029, and following the reporting person's separation from service.

Management Comments

• The report discloses the distribution of notional stock units, representing equity compensation previously deferred by the reporting person in the Arthur J. Gallagher & Co. Supplemental Savings and Thrift Plan.
• The timing of this distribution in July 2025 is in accordance with the terms of the Supplemental Savings and Thrift Plan and the reporting person's election at the time of deferral.

Industry Context

This transaction is a routine executive compensation event, common in publicly traded companies, where deferred equity compensation is distributed. Such mechanisms are standard practice to align the long-term interests of key executives with shareholder value in the financial services and insurance brokerage industry.

Comparison to Industry Standards

• The use of notional stock units and their scheduled distribution as a form of deferred equity compensation is a common practice among large, publicly traded companies, including those in the insurance brokerage sector.
• This compensation structure is comparable to those seen at peers like Marsh & McLennan Companies (MMC) or Aon plc (AON), which also utilize various forms of equity-based incentives to retain and motivate senior management.

Related Party Transactions

• The transaction involves the distribution of equity compensation from Arthur J. Gallagher & Co. to its Chief Financial Officer, Douglas K. Howell, which is a standard related-party compensation arrangement.

Stakeholder Impact

• Shareholders: The transaction aligns the financial incentives of a key executive with shareholder value, potentially encouraging long-term performance.
• Employees: Demonstrates the company's commitment to its executive compensation plans and deferred savings programs.

Next Steps

• Future distributions of remaining notional stock units are scheduled for July 2024, 2026, 2028, and 2029.
• Additional distributions of notional stock units will occur following the reporting person's separation from service.

Key Dates

Keywords

Arthur J. Gallagher & Co., AJG, Douglas K. Howell, SEC Form 4, Insider Transaction, Equity Compensation, Notional Stock Units, CFO, Financial Services, Insurance Brokerage