Patrick Gallagher
Arthur J. Gallagher &About Patrick Gallagher
Patrick M. Gallagher is Executive Vice President and Chief Operating Officer of Arthur J. Gallagher & Co. (AJG) since 2024, age 45, with 22 years of service at the company across multiple operating leadership roles in the Americas, Canada, Caribbean, Latin America, and U.S. Midwest regions . His 2024 responsibilities included leading divisional reorganization, integration planning for the AssuredPartners transaction, and advancing AJG’s data and analytics capabilities to drive organic growth and innovation . Company performance metrics that underpin executive pay-for-performance in 2024: adjusted revenue grew 14.3% to $11.3B, adjusted EBITDAC grew 20.7% to $3.8B, organic revenue grew 7.6%, adjusted EBITDAC margin reached 33.3%, and total shareholder return was 27.3% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arthur J. Gallagher & Co. | EVP, Chief Operating Officer | 2024–present | Led divisional leadership reorganization; integration planning for AssuredPartners; scaled data and analytics to support growth |
| Arthur J. Gallagher & Co. | Corporate VP; President, P/C Brokerage – Americas | 2021–2024 | Drove organic growth and division performance in Americas; prepared operating platform for expanded scale |
| Arthur J. Gallagher & Co. | Chairman, Canada & Caribbean; CEO, Latin America | 2019–2021 | Expanded international operating footprint and client capabilities |
| Arthur J. Gallagher & Co. | President, Midwest Region, P/C Brokerage | 2016–2019 | Regional growth and leadership; operational execution foundations |
External Roles
Not disclosed in reviewed filings; no additional public company directorships noted for Patrick M. Gallagher .
Fixed Compensation
| Component | 2024 Value |
|---|---|
| Base Salary ($) | $850,000 |
| Target Annual Cash Incentive (% of salary) | 150% (Other NEOs target; Patrick as COO falls under this schedule) |
| Actual Annual Cash Incentive ($) | $2,550,000 |
Performance Compensation
| Element | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| PSUs (2024 grant) | 3-year adjusted EBITDAC per share growth | 60% of LTI for other executive officers | 4,270 target units | Earned based on 2024–2026 average; 2024 one-year growth = 17.6% (illustrative of trajectory) | Cliff vest on 3/1/2027 |
| PSUs (2023 grant) | 3-year adjusted EBITDAC per share growth | — | 4,620 max units shown based on 2023–2024 performance to date | Final payout subject to 2023–2025 average; 2022–2024 average for NEO program paid 200% (context) | Cliff vest on 3/15/2026 |
| Stock Options (2024 grant) | Share price appreciation | 40% of LTI for other executive officers | 11,386 options @ $243.54 strike | N/A (time-based) | One-third on each of 3rd/4th/5th anniversaries of grant date |
| LTI Target (aggregate) | — | — | 200% of salary for COO | — | — |
Performance program mechanics:
- Annual cash incentive grid based on adjusted revenue and adjusted EBITDAC growth; with 2024 performance (14.3% and 20.7%) each NEO qualified for 200% of target before committee discretion .
- PSU earnout curve: <4% = 0%; 4–9% = 50–100%; 9–14% = 100–200%; ≥14% = 200%; earned PSUs cliff vest at 3 years .
Equity Ownership & Alignment
| Ownership Detail | Value |
|---|---|
| Common Shares Owned | 243,971 |
| Stock Options (exercisable within 60 days) | 17,944 |
| Total Beneficial Ownership | 261,915 |
| Ownership % of Outstanding | <1% (indicated by *) |
| Trust/Indirect Holdings (footnote) | Shares held across irrevocable/revocable trusts and children’s trusts; details include 54,859 in irrevocable trust (mother), 83,407 in trust for children, among others |
Stock ownership guidelines and alignment:
- Executive ownership guideline: 3x annualized base salary for other executive officers; all current executives are in compliance .
- No pledging of common stock by directors or executive officers; hedging prohibited under Insider Trading Policy .
- Deferred compensation invested in AJG stock fund: DEPP/DCPP/SS&T elections credit market-rate returns; Patrick has elected stock fund for DCPP and participates in DEPP and SS&T .
Outstanding awards and upcoming vesting:
- Options outstanding (selected grants): 2,419/4,836 @ $127.90 exp 3/16/2028; 5,510 @ $158.56 exp 3/15/2029; 6,160 @ $177.09 exp 3/15/2030; 11,386 @ $243.54 exp 3/1/2031 .
- RSUs/Units vesting schedule (as of 12/31/2024): 580 PUP units on 1/1/2025; 1,390 RSUs on 3/12/2025; 1,185 RSUs on 3/16/2026; 1,155 RSUs on 3/15/2027; PSUs unearned at maximum: 4,620 (2023 grant, vest 3/15/2026), 8,540 (2024 grant, vest 3/1/2027) .
- 2024 equity activity: options exercised 7,400 shares for $1,326,746 value; 2,065 shares vested (RSUs/PUP/PSUs) for $492,776 value .
Employment Terms
- No employment agreement; executives serve at Board discretion .
- Change-in-control agreements: double trigger (CIC + qualifying termination within 24 months); severance = 2x salary, bonus, and annual cash incentive; 2 years of continued welfare benefits; new agreements do not include excise tax gross-ups (older agreements may include) .
| Scenario (as of 12/31/2024; amounts incremental) | Total ($) | Key Components ($) |
|---|---|---|
| Voluntary Resignation | $1,068,236 | DCPP $1,068,236; no equity acceleration |
| Death or Disability | $12,962,373 | Stock Options $2,974,087; RSUs $1,089,190; PSUs $3,449,498 (at target); DEPP $4,243,415; DCPP $1,068,236 |
| Termination with Cause | $1,068,236 | DCPP only; equity forfeited |
| Termination without Cause | $6,030,882 | Severance Pay $719,231; DEPP $4,243,415; DCPP $1,068,236 |
| Change in Control (no termination) | $16,312,502 | Equity accelerations and plan vesting (Stock Options $2,974,087; RSUs $1,089,190; PSUs $3,449,498; DEPP $4,243,415; DCPP $1,068,236); excise tax gross-up $3,350,129 |
| Termination without Cause or Resignation for Good Reason Post-CIC | $27,047,965 | Severance $6,800,000; equity accelerations as above; DEPP $4,243,415; DCPP $1,068,236; benefits $44,328; excise tax gross-up $7,241,264 |
Clawback provisions:
- NYSE-required Incentive Compensation Recovery Policy for erroneous awards on restatement; broader clawbacks for misconduct/violations of Insider Trading Policy or Global Standards of Business Conduct .
Insider Trading Policy:
- Formal policy filed as Exhibit 19.1 to the 2024 10‑K; applies to directors, officers, employees, and certain related persons .
Compensation Detail (2024)
| Component | 2024 Amount ($) |
|---|---|
| Salary | $850,000 |
| Stock Awards (grant-date fair value, PSUs/RSUs) | $1,039,916 |
| Option Awards (grant-date fair value) | $791,896 |
| Non-Equity Incentive (annual cash incentive) | $2,550,000 |
| Change in Pension Value | $0 (−$396 shown; SEC requires zero if negative) |
| All Other Compensation (incl. perqs, plan matches) | $522,115 |
Perquisites and other:
- DEPP award $300,000; SS&T match $97,750; 401(k) match $17,250; corporate auto/insurance $5,100; private aircraft $44,215; other perqs $57,800; deferred compensation invested in AJG stock fund .
- Pension plan present value $4,206; credited service 2 years (plan frozen since 2005) .
2024 grants:
- PSUs: 2,135 threshold, 4,270 target, 8,540 max; vesting 3/1/2027 .
- Options: 11,386 @ $243.54 strike; vest over years 3–5 from grant .
Governance, Related Parties, and Say‑on‑Pay
- Say‑on‑pay support: 90.3% approval in 2024 .
- Related person disclosures: Patrick Gallagher (COO) is the son of CEO; numerous relatives of senior executives employed with compensation vetted as commensurate; Patrick’s DEPP/DCPP and severance programs follow standard NEO plans .
Investment Implications
- Pay-for-performance alignment: Patrick’s incentives are tied to core operating metrics—adjusted revenue and adjusted EBITDAC growth for annual cash incentives, and 3-year adjusted EBITDAC per share growth for PSUs—consistent with AJG’s 2024 results (14.3% adjusted revenue growth, 20.7% adjusted EBITDAC growth, 17.6% adjusted EBITDAC per share growth) supporting maximum annual incentive and strong PSU trajectories .
- Retention vs. selling pressure: Significant deferred equity under DEPP (unvested until age 62) and unearned PSUs with multi-year cliffs limit near-term selling pressure; upcoming RSU and PSU vestings through 2027 and 2024 option exercises indicate periodic liquidity events rather than sustained selling; hedging/pledging prohibited further mitigates alignment risk .
- Change-of-control economics: Double-trigger agreements with 2x salary+bonus+annual incentive and broad equity vesting could create substantial payouts ($27.05M in a CIC/termination scenario as modeled), but absence of new excise tax gross-ups aligns with shareholder-friendly practice; potential gross-ups shown reflect legacy agreements .
- Governance watchpoints: Family relationships are fully disclosed; Compensation Committee independence and robust clawbacks reduce governance risk; strong say‑on‑pay support (90.3%) indicates shareholder acceptance of the program .