Why We Think The CEO Of Brown & Brown, Inc. (NYSE:BRO) May Soon See A Pay Rise

Key Insights

• Brown & Brown to hold its Annual General Meeting on 8th of May
• Salary of US$1.00m is part of CEO J. Brown's total remuneration
• The total compensation is 35% less than the average for the industry
• Brown & Brown's EPS grew by 20% over the past three years while total shareholder return over the past three years was 59%

The impressive results at Brown & Brown, Inc. (NYSE:BRO) recently will be great news for shareholders. At the upcoming AGM on 8th of May, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Brown & Brown

How Does Total Compensation For J. Brown Compare With Other Companies In The Industry?

Our data indicates that Brown & Brown, Inc. has a market capitalization of US$23b, and total annual CEO compensation was reported as US$9.8m for the year to December 2023. That's a notable increase of 45% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

On comparing similar companies in the American Insurance industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. Accordingly, Brown & Brown pays its CEO under the industry median. Moreover, J. Brown also holds US$452m worth of Brown & Brown stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$1.0m	10%
Other	US$8.8m	US$5.7m	90%
Total Compensation	US$9.8m	US$6.7m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Brown & Brown sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Brown & Brown, Inc.'s Growth Numbers

Brown & Brown, Inc. has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is up 15% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Brown & Brown, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Brown & Brown, Inc. for providing a total return of 59% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Brown & Brown that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.