8-KLeadership Changes

BROWN & BROWN, INC. 8-K Report, Executive Changes (Mar 1, 2018)

Filed March 1, 2018For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) filed an 8-K on March 1, 2018, detailing the adoption of its 2018 annual cash incentive plan for executive officers. This plan is designed to align executive compensation with key company performance metrics, fostering accountability and driving growth. The incentive structure is composed of three main components, emphasizing organic revenue growth, EBITDAC margin, and personal objectives, with specific weightings and payout potentials to motivate the executive team. The plan highlights the company's focus on top-line growth and profitability. The use of organic revenue growth targets, both at the company-wide and divisional levels, encourages sustainable expansion. The inclusion of EBITDAC margin as a performance metric underscores the importance of operational efficiency and profitability after accounting for specific expenses. The personal objectives component allows for tailored motivation and accountability for individual executive contributions. This structure aims to provide a clear framework for executive rewards tied directly to the company's financial success and strategic goals for 2018.

Key Highlights

  • 1Brown & Brown, Inc. adopted its 2018 annual cash incentive plan for executive officers.
  • 2The incentive plan is based on achieving specific performance objectives for fiscal year 2018.
  • 3The plan has three main components: organic revenue growth (40%), EBITDAC margin (40%), and personal objectives (20%).
  • 4The EBITDAC margin calculation excludes acquisition earn-out payables from the usual definition.
  • 5Payouts for each component can range from 0% to 200% of the target incentive amount.
  • 6Target cash incentive amounts for named executive officers for 2018 were disclosed, with J. Powell Brown at $1,400,000 and other key executives also detailed.

Frequently Asked Questions

This 8-K filing announces the adoption of Brown & Brown, Inc.'s annual cash incentive plan for its executive officers for the 2018 fiscal year. It outlines how executive compensation will be tied to specific company performance metrics.

The 2018 incentive plan is based on three core performance metrics: organic revenue growth (weighted at 40%), EBITDAC margin (weighted at 40%), and the achievement of personal objectives set by the Compensation Committee (weighted at 20%).

For the purpose of this incentive plan, EBITDAC margin is defined as income before income taxes less amortization, depreciation, interest, and the change in estimated acquisition earn-out payables, divided by total revenues.

Each component of the incentive plan has a payout range of 0% to 200% of the executive's target cash incentive amount. The specific weightings of these components can differ slightly for certain executives, such as Mr. Penny.