DEF 14A: Brown & Brown, Inc. Invites Shareholders to Annual Meeting, Highlights Strong 2023 Performance

Brown & Brown, Inc.'s proxy statement invites shareholders to the annual meeting on May 8, 2024, and details the agenda, director nominees, and executive compensation, highlighting the company's strong financial performance in 2023.

Summary

• Brown & Brown, Inc. will hold its Annual Meeting of Shareholders virtually on May 8, 2024.
• Shareholders will vote on the election of 15 directors, ratification of Deloitte & Touche LLP as the company's independent registered public accountants, and an advisory vote on executive compensation.
• The record date for determining shareholders eligible to vote is March 4, 2024.
• In 2023, Brown & Brown crossed $4 billion in annual revenues, driven by acquisitions and organic revenue growth.
• The company completed 33 strategic acquisitions with combined annual revenues of approximately $162 million.
• The dividend was increased for the 30th consecutive year, returning approximately $135 million to shareholders.
• Total revenue for 2023 was $4.257 billion, compared to $3.573 billion in 2022.
• Net income for 2023 was $871 million, including a pre-tax gain on disposal of $134.6 million, compared to $672 million in 2022.
• Company organic revenue growth was 10.2% in 2023, compared to 8.1% in 2022.
• Adjusted EBITDAC margin was 34.2% in 2023, compared to 32.9% in 2022.
• Net cash provided by operating activities was $1,010 million in 2023, compared to $881 million in 2022.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic initiatives, indicating a favorable sentiment.

Positives

• The company achieved strong total and organic revenue growth.
• The company increased its industry-leading operating margins.
• The company achieved its 30th consecutive annual dividend increase.
• The company experienced robust growth in net cash provided by operating activities.
• The company completed 33 strategic acquisitions.
• The company has a strong focus on succession planning and attracting qualified director candidates.
• The company has strong anti-hedging and anti-pledging provisions.
• The company has strong executive and director stock ownership guidelines.
• The company has a robust clawback policy.

Negatives

• The Services segment experienced a decrease in total commissions and fees growth of (5.1)% in 2023.
• The Services segment experienced a decrease in organic revenue growth of (0.6)% in 2023.

Risks

• The document mentions operational, financial, strategic, acquisition-related, technological, competitive, reputational, legal and regulatory risks.
• The document mentions cybersecurity risks.
• The document mentions potential conflicts of interest.

Future Outlook

The company aims to continue growing total and organic revenues while delivering strong operating margins and cash conversion.

Management Comments

• Fiscal 2023 was another outstanding year for Brown & Brown, as we crossed our intermediate goal of $4 billion of annual revenues, fueled by a combination of high-quality acquisitions and strong company-wide organic revenue.
• We remained focused on growing profitably by expanding our industry-leading operating margins, and we increased our annual cash provided by operations to a record high of over $1 billion.
• Our Board is committed to ongoing succession planning with the goal of attracting the most qualified director candidates with diverse backgrounds and skillsets to guide us on our journey as A Forever Company.

Industry Context

The document highlights Brown & Brown's performance relative to its peers, particularly in terms of organic revenue growth and operating margins, suggesting a competitive position within the insurance brokerage industry.

Comparison to Industry Standards

• The Compensation Committee reviewed the compensation practices of seven publicly traded insurance carriers and several other companies in the capital markets industry (the Peer Comparison Group).
• The Peer Comparison Group includes: Arch Capital Group Ltd., Aon plc, Argo Group International Holdings, Arthur J. Gallagher & Co., AXIS Capital Holdings Limited, CBIZ, Inc., Crawford & Company, Erie Indemnity Company, Marsh & McLennan Companies Inc., Primerica, Inc., Raymond James Financial, Inc., RLI Corp., Selective Insurance Group Inc., Willis Towers Watson PLC.
• At the time of analysis, our total revenue was at the 46th percentile, and our market capitalization was at the 56th percentile of the peer comparison group.

Corporate Governance

Related Party Transactions

• The Company leases an aircraft from Zambezi, LLC, owned by J. Hyatt Brown and his wife.
• The Hays Financial Group, Inc. (HFG) paid Hays Companies, Inc., a wholly owned subsidiary of the Company (HCI), approximately $788,632 in connection with business referrals made from HCI to HFG.
• THG paid to HCI approximately $118,000 in rent payments for office space used by HFG.
• Peachtree Special Risk Brokers, LLC, a wholly owned subsidiary of the Company (Peachtree), acquired substantially all of the assets, and assumed certain liabilities, of RLA Insurance Intermediaries, LLC, a wholesale insurance brokerage firm headquartered in Boston, Massachusetts (RLA).
• Andrew M. Walker, who is the son of Chris L. Walker, is employed by a subsidiary of the Company as an underwriter in the Companys San Diego, California office and received compensation of $282,285.
• Alexander J. Walker, who is the son of Chris L. Walker, is employed by a subsidiary of the Company as an underwriter in the Companys Alpharetta, Georgia office and received compensation of $208,936.

Stakeholder Impact

• Shareholders will have the opportunity to vote on key company matters.
• Employees are impacted by compensation policies and benefit plans.
• Customers may benefit from the company's strategic acquisitions and expanded capabilities.

Next Steps

• Shareholders are encouraged to vote online, by phone, or by signing and returning their proxy card.
• Shareholders can attend the virtual Annual Meeting on May 8, 2024.

Key Dates

Keywords

shareholders, directors, compensation, governance, acquisitions, revenue, organic, insurance, proxy, board