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On behalf of our Board of Directors, I invite you to attend our 2023 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 2022. On a combined basis, our core brokerage and risk management segments produced adjusted revenue1 growth of 24.3% (to $8.4 billion) and adjusted EBITDAC1 growth of 18.4% (to $2.5 billion). We achieved organic revenue growth of 10.2% in our core brokerage and risk management segments, our highest in two decades, improving upon last year’s outstanding organic revenue growth performance. We completed acquisitions representing $246.5 million in estimated annualized revenue and made significant progress integrating the treaty reinsurance brokerage operations of Willis Towers Watson plc (Willis Re). I am pleased to report that during a year of integration, the acquired Willis Re operations exceeded our full-year 2022 pro forma financial performance expectations and were substantially assimilated into Gallagher Re. It was truly a fantastic year for our franchise, and I am excited about our future. Board Contributions to Strategy and Risk Oversight. 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. I am grateful to 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 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. ESG. In 2022, we published an updated Climate Disclosure Report, which includes a goal of Net Zero emissions in our direct operations (Scope 1 and Scope 2) by 2050. We also continued to make progress on inclusion and |
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diversity. Among other initiatives, we continued to strengthen Gallagher Connect Partners, an inclusive network of insurance firms strategically selected to best serve our clients’ risk management, insurance and supplier diversity needs. 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 13th time as one of the World’s Most Ethical Companies®. Looking Ahead. During the course of 2022, 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. We believe increases in property/casualty rates will continue throughout 2023 due to rising loss costs, higher reinsurance pricing (particularly in property catastrophe), increased frequency of catastrophe losses and social inflation. While there are positive indications for our business, there are also potential challenges and uncertainty stemming from geopolitical instability, inflation and rising interest rates. As we have done throughout our history, I believe our team will rise to the occasion and meet the challenges that come our way in 2023. With more than 43,000 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. As you read these proxy materials, you will see that Kay McCurdy is not standing for re-election to our Board. Over her 17 years as a director we saw a period of sustained growth for our company. She contributed meaningfully to our financial success and, as importantly, to maintaining our unique culture. I want to personally express my deep gratitude for her years of service and friendship. On behalf of our Board of Directors, thank you for your continued support. We look forward to welcoming you at our 2023 Annual Meeting. Sincerely,
J. Patrick Gallagher, Jr. Chairman of the Board, President and Chief Executive Officer |
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