Doug Howell
Arthur J. Gallagher &About Doug Howell
Doug K. Howell is Chief Financial Officer of Arthur J. Gallagher & Co. (AJG), serving as CFO since 2003; he is 63 years old per AJG’s 2025 Form 10-K executive officer roster . AJG’s 2024 operating performance (relevant to his pay-for-performance alignment) included adjusted revenue growth of 14.3%, adjusted EBITDAC growth of 20.7%, and 7.6% organic revenue growth in the core segments; 2024 total shareholder return was ~27% (value of $100 to $127.35) and GAAP net income was $1,470.4 million . AJG stockholders showed continued support for executive pay with 2024 say‑on‑pay approval of 90.3% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arthur J. Gallagher & Co. | Chief Financial Officer | CFO since 2003 | Long-tenured finance leader; maintained investment-grade ratings, executed debt/equity financings and the AssuredPartners acquisition financing plan; led expense initiatives supporting margin expansion |
Fixed Compensation
Multi-year summary compensation for Doug Howell:
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive ($) | Change in Pension Value ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| 2022 | 950,000 | 726,205 | 498,312 | 2,375,000 | — | 779,346 | 5,328,863 |
| 2023 | 950,000 | 804,166 | 559,949 | 2,375,000 | 984 | 1,177,179 | 5,867,278 |
| 2024 | 950,000 | 1,162,173 | 885,093 | 2,850,000 | 11 | 889,383 | 6,736,660 |
Perquisites and deferred compensation details (2024):
- Notable perqs/other: private aircraft ($63,274), financial advisory ($18,445), corporate auto & insurance ($8,664) .
- Deferred plans: DEPP company contribution $600,000; DEPP balance $705,090; SS&T Plan deferral $3,710,689 with company match $149,000; SS&T balance $61,424,324 .
Performance Compensation
Annual cash incentive (ACI) structure and 2024 outcome:
- Target: 150% of base salary for non-CEO NEOs; program capped at 200% of target .
- Metrics grid: payout opportunity a function of adjusted revenue growth and adjusted EBITDAC growth; in 2024 AJG achieved 14.3% adjusted revenue growth and 20.7% adjusted EBITDAC growth, qualifying the 200% maximum opportunity .
- Howell 2024 ACI paid: $2,850,000 (200% of target) .
| ACI Metric | 2024 Targeting Framework | 2024 Actual | Payout Impact |
|---|---|---|---|
| Adjusted Revenue Growth | Grid-based; higher growth raises payout multiple (max 200%) | 14.3% | Contributes to max multiple |
| Adjusted EBITDAC Growth | Grid-based; higher growth raises payout multiple (max 200%) | 20.7% | Contributes to max multiple |
| Individual/Other Factors | Committee discretion (organic growth, margin, divisional and individual performance) | Considered | Finalized at 200% of target |
Long-term incentives (LTI) design and 2024 actions:
- Mix: For non-CEO NEOs, 60% PSUs and 40% stock options; PSUs earned on 3-year average adjusted EBITDAC per share growth; PSUs cliff vest at 3 years; options vest one‑third in years 3–5 .
- 2024 grants for Howell: 4,772 PSUs (grant date value $1,162,173), 12,726 options at $243.54 (grant date value $885,093) .
- Recent PSU outcomes: 2022 grant earned at 200% based on 2022–2024 average adjusted EBITDAC/share growth of 16.1%; 2023 and 2024 cycles remain in-flight .
| LTI Element | 2024 Grant/Status | Metric/Thresholds | Vesting |
|---|---|---|---|
| PSUs | 4,772 target PSUs ($1,162,173) | 3-yr avg adjusted EBITDAC/share; 4% threshold; 200% at ≥14% | Cliff vest 3/1/2027 (2024 grant); 2022 grant paid at 200% |
| Stock Options | 12,726 options @ $243.54 ($885,093) | Share price appreciation | 1/3 on each of 3rd, 4th, 5th anniversaries |
Outstanding equity and 2025–2027 vesting cadence (as of 12/31/2024):
| Category | Amount |
|---|---|
| Unexercisable Stock Options (count) | 57,823 |
| RSUs – unvested shares (count; market value $) | 12,010; $3,409,039 |
| Unearned PSUs outstanding (max at 200%) | 18,626 |
| Key upcoming vests | RSUs: 2,850 on 3/12/2025; PSUs: 9,082 on 3/15/2026; 9,544 on 3/1/2027 (subject to performance) |
Clawback and risk oversight:
- NYSE-compliant clawback for erroneously awarded incentive comp; broader misconduct-related recovery rights in plans .
- Committee reviews comp risk; PSUs capped at 200%; multi-year vesting and DEPP deferrals mitigate one-year risk .
Equity Ownership & Alignment
Beneficial ownership and alignment:
| Component | Amount/Status |
|---|---|
| Shares of Common Stock (incl. notional units, etc.) | 299,011; total beneficial incl. options 356,834 (<1%) |
| Stock Options (exercisable within 60 days) | 57,823 |
| RSUs included in beneficial total | — (director RSUs vest immediately; exec RSUs not included in total unless vestable within 60 days) |
| Footnotes / Breakdown | Includes 210,996 notional stock units (SS&T); 3,165 shares held by spouse (disclaimed); 418 shares in 401(k) |
Stock ownership guidelines and trading policies:
- Ownership guideline: CFO must hold stock equal to 4x base salary; all executive officers are in compliance .
- Hedging prohibited; no pledges of common stock by directors or executive officers .
- Insider trading policy filed with AJG’s 2024 10‑K provides additional restrictions .
Deferred compensation and deferrals:
| Plan (2024) | Executive Contribution ($) | Company Contribution/Match ($) | Aggregate Earnings ($) | 2024 Withdrawals ($) | 12/31/2024 Balance ($) |
|---|---|---|---|---|---|
| DEPP | — | 600,000 | 175,768 | 1,167,136 | 705,090 |
| SS&T Plan | 3,710,689 | 149,000 | 10,764,264 | — | 61,424,324 |
- Howell deferred receipt of RSUs vesting in 2024 and half of PSUs vesting in 2024; elections include a lump‑sum distribution of deferred PSUs in July 2025 .
Related-party disclosure (alignment/independence context):
- AJG disclosed that Howell’s son‑in‑law was employed as a business systems analyst lead with total 2024 compensation of $335,000; compensation deemed commensurate with peers .
Employment Terms
Severance and change‑in‑control (CIC) economics:
- Double‑trigger CIC agreements: payments only upon qualifying termination within 24 months after a CIC .
- CIC severance: lump sum equal to two years of salary, bonus and annual cash incentive; continued welfare benefits up to 2 years; no new excise tax gross‑ups (policy since 2008) .
- Equity treatment: Board approval required for accelerated vesting at CIC; detailed treatment provided by instrument and scenario (retirement, cause, death/disability, etc.) .
Potential payments for Doug Howell (assuming 12/31/2024 termination and AJG share price $283.85):
| Scenario | Severance ($) | Options ($) | RSUs ($) | PSUs ($) | DEPP ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Voluntary resignation | — | 6,714,349 | 837,216 | 4,976,109 | — | — | 12,527,674 |
| Death or disability | — | 8,006,892 | 837,216 | 7,572,425 | 705,090 | — | 17,121,623 |
| Termination with cause | — | — | — | — | — | — | — |
| Termination without cause (non‑CIC) | 767,308 | 6,714,349 | 837,216 | 4,976,109 | 705,090 | — | 14,000,072 |
| CIC (no termination) | — | 8,006,892 | 837,216 | 7,572,425 | 705,090 | — | 17,121,623 |
| Qualifying termination post‑CIC | 7,600,000 | 8,006,892 | 837,216 | 7,572,425 | 705,090 | 39,232 | 24,760,855 |
Clawbacks and restrictive covenants:
- Incentive compensation recovery policy (restatements) plus plan‑level misconduct forfeiture provisions; Insider Trading Policy and Global Standards violations trigger recovery .
- Award agreements include restrictive covenants and clawbacks; specific non‑compete/non‑solicit terms not separately enumerated in proxy beyond plan language .
Investment Implications
- Pay-for-performance linkage and operating discipline: Howell’s ACI and PSU structures tie directly to adjusted revenue, adjusted EBITDAC growth, and 3‑year adjusted EBITDAC per share, all of which were strong in 2024 (200% ACI payout; 2022 PSU cycle at 200%)—supporting alignment between comp and multi‑year value creation .
- Retention vs. selling pressure: Material deferred comp (SS&T and DEPP) and multi‑year vesting schedules can temper near‑term selling incentives; Howell also deferred equity distributions (part of 2024 vests), with a PSU lump‑sum scheduled July 2025 . Monitor Form 4s around key vesting dates (e.g., March 2025/2026/2027) for potential selling, given RSU/PSU events and sizable option overhang .
- Governance risk flags: No hedging or pledging, double‑trigger CIC, no new excise tax gross‑ups, and positive say‑on‑pay (90.3% approval) reduce governance risk; related‑party employment (son‑in‑law) is disclosed and benchmarked to peers, but worth monitoring for any escalation .
- Execution track record: 2024 achievements credited to Howell include expense discipline (adj. EBITDAC margin up to 33.3%), maintaining IG ratings, and executing equity/debt financings to fund AssuredPartners—indicative of disciplined capital structure management supporting growth M&A .
Appendix: Additional Detail
2024 Company Performance (context for pay)
| Metric | 2024 Result |
|---|---|
| Adjusted Revenue (Brokerage + Risk Management) | $11.334B |
| Adjusted EBITDAC | $3.775B |
| Adjusted EBITDAC Margin | 33.3% |
| Organic Revenue Growth (Combined) | 7.6% |
| Total Shareholder Return (value of $100) | $127.35 |
| Net Income | $1,470.4M |
Stock Ownership Guidelines and Policies
- Executive ownership guidelines: CEO 6x, CFO 4x, other NEOs 3x salary; all executives compliant .
- No hedging; no pledging by directors/executive officers .
- Clawbacks per NYSE rules and plan agreements .
Notable 2024 Grants and Vesting (Howell)
| Grant/Action | Detail |
|---|---|
| 2024 PSU Grant | 4,772 PSUs; vest 3/1/2027 (performance-based) |
| 2024 Stock Options | 12,726 options @ $243.54; vest years 3–5 |
| 2024 ACI Paid | $2,850,000 (200% of target) |
| 2022 PSU Outcome | 200% earned (16.1% 3‑yr avg adj. EBITDAC/share) |
| Upcoming Vests | RSUs: 2,850 on 3/12/2025; PSUs: 9,082 on 3/15/2026; 9,544 on 3/1/2027 |
Investment Implications
- Howell’s compensation emphasizes multi‑year metrics and equity with deferred realization, supporting long‑term alignment; 2024 outcomes reflect strong operating execution and disciplined financing, which are tailwinds for equity holders if sustained .
- Near‑term trading: Watch March vesting windows and the July 2025 PSU distribution for potential liquidity events, balanced by significant ongoing deferrals that mitigate immediate selling pressure .
- Governance profile is shareholder‑friendly (double‑trigger CIC, no new gross‑ups, anti‑hedging/pledging, strong say‑on‑pay), with limited red flags beyond transparent related‑party employment; continued monitoring is prudent as AJG pursues large-scale M&A integration and financing .