J. Scott Penny
BROWN & BROWNAbout J. Scott Penny
J. Scott Penny is Executive Vice President and Chief Acquisitions Officer of Brown & Brown (BRO). Age 58 as of Feb. 11, 2025, he has served as Chief Acquisitions Officer since 2011 and joined the company in 1989, progressing through profit center leadership and regional executive roles . Company performance under his tenure includes 32 acquisitions in 2024 with ~$174M aggregate annual revenues and strong financial results: total revenues $4.805B (+12.9% YoY), Organic Revenue growth 10.4%, Adjusted EBITDAC margin 35.3% (vs. 34.2% in 2023), net income $993M, and 2024 TSR +44% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Brown & Brown | Profit Center Leader – Jacksonville, FL | 1997–1999 | Led local retail office operations and growth |
| Brown & Brown | Profit Center Leader – Indianapolis, IN | 1999–2003 | Managed office leadership and production |
| Brown & Brown | Regional Executive Vice President | 2002–2010 | Oversaw regional performance, integration and growth |
| Brown & Brown | Regional President | 2010–2014 | Led regional strategy and operations |
| Brown & Brown | Chief Acquisitions Officer (EVP) | 2011–present | Leads acquisitions strategy, disciplined process and integration |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No external board roles disclosed |
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $698,077 | $700,000 | $796,154 |
| All Other Compensation | $89,583 | $86,942 | $80,621 |
Notes:
- 2024 base salary increased to $800,000 effective January 2024 per Compensation Committee decision; reported salary reflects payroll timing. The Committee raised Penny’s base from $700,000 to $800,000 based on market assessment .
Performance Compensation
Annual Cash Incentive Structure and Outcomes (2024)
| Component | Weighting | Target | Actual | Payout % | Result ($) |
|---|---|---|---|---|---|
| Company Organic Revenue growth | 40% | 6.9% | 10.4% | 200% | $800,355 |
| Adjusted EBITDAC Margin | 40% | 34.4% | 35.3% (adjusted per Committee) | 176% | $702,569 |
| Personal Objectives | 20% | Committee-set | Strong performance (acquisitions discipline, integration) | 175% | $350,000 |
| Total Cash Incentive Payout | — | — | — | — | $1,853,000 |
Personal objectives included: delivering budgeted results and acquisitions, attracting/retaining talent, ensuring disciplined acquisition processes and robust integration plans, and advancing global integration .
Long-Term Equity Awards (2019 SIP)
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Total Long-Term Equity Award (grant-date FV) | $2,492,134 | $490,253 | $492,098 | $500,000 (approved) |
| Structure | PSAs/RSAs (75%/25%) | PSAs/RSAs (75%/25%) | PSAs/RSAs (75%/25%): $375,000 PSA, $125,000 RSA | PSAs/RSAs (75%/25%): $375,000 PSA, $125,000 RSA |
| 2024 Grants – Shares | — | — | 6,046 shares underlying awards | — |
Vesting schedule:
- RSAs: 5-year cliff vesting from grant date; voting and dividend rights at grant; non-disposable until vest .
- PSAs: performance measured over 3 years (Organic Revenue growth and cumulative diluted EPS CAGR), plus 5-year cliff vesting (time) from grant; payout range 0–200% .
Certified performance (prior awards):
- For performance grants issued in 2021, the Committee certified in Feb. 2024 that Average Organic Revenue Growth (2021–2023) was 9.6% (max) and Adjusted EPS was $7.29 (max), resulting in 200% of target shares awarded; Penny gained dividend and voting rights on 16,240 shares, vesting expected Feb. 23, 2026 subject to employment .
Stock vesting realized (2024):
- Shares vested: 26,684; value realized $2,247,860 .
Equity Ownership & Alignment
| Ownership Metric | Value |
|---|---|
| Beneficial Ownership (as of Mar. 3, 2025) | 702,589 shares; <1% of shares outstanding |
| 401(k) Plan shares included | 19,377 |
| Joint ownership with spouse | 357,056 shares |
| Children’s shares (disclaimed) | 192 shares |
| Hedging/Pledging | Hedging prohibited; pledging prohibited for execs’ guideline shares; no pledged shares disclosed for Penny |
Outstanding awards at FY-end 2024 (selected grants and market values at $102.02/share):
- Not Vested Shares: 2/21/2020 (2,576; $262,804), 2/21/2020 (15,460; $1,577,229), 2/23/2021 (2,706; $276,066), 2/23/2021 (16,240; $1,656,805), 1/1/2022 (28,457; $2,903,183), 2/21/2022 (1,889; $192,716), 2/20/2023 (2,167; $221,077), 2/19/2024 (1,511; $154,152) .
- Unearned (target) shares: 2/21/2022 (11,338; $1,156,703), 2/20/2023 (13,004; $1,326,668), 2/19/2024 (9,070; $925,321) .
Ownership guidelines:
- Senior Leadership Team officers must hold at least 3x base salary; guidelines and robust clawback policy disclosed . Individual compliance status by executive is not itemized.
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | New agreements executed in 2014; compensation determined from time to time |
| Change-in-Control (CIC) | If resulting entity employs similar executives, agreement deemed modified to provide “equivalent terms and benefits to those of similar executives” |
| Double-Trigger Equity Vesting | Under 2010 and 2019 SIPs, involuntary or constructive termination within 12 months after CIC: 100% vesting of unvested restricted stock; for performance grants without certified goals, greater of 100% or performance-based % to date |
| Restrictive Covenants | Two-year post-termination non-solicitation of business/employees; confidentiality |
| Termination | Agreements terminable by either party at any time, with or without cause or notice |
| Clawback | Mandatory recovery policy for erroneously awarded incentive compensation tied to restatements (NYSE-compliant) |
| Tax Gross-Up | Legacy excise tax gross-up applies only to terminated PSP awards under specified triggering events; no new gross-up agreements |
Compensation & Incentives Summary (Pay-for-Performance)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $698,077 | $700,000 | $796,154 |
| Bonus | $20,000 (discretionary) | — | — |
| Stock Awards (grant-date FV) | $2,492,134 | $490,253 | $492,098 |
| Non-Equity Incentive | $1,261,000 | $1,651,000 | $1,853,000 |
| All Other Compensation | $89,583 | $86,942 | $80,621 |
| Total | $4,560,794 | $2,928,195 | $3,221,873 |
Design and market positioning:
- 2024 base and target cash incentive increases were driven by FW Cook January 2024 market assessment; Penny’s total 2023 direct compensation was only slightly above peer median (insurance intermediaries and carriers comparator group) .
- No stock options under the 2019 SIP; equity is delivered via PSAs/PSUs and RSAs/RSUs, majority performance-based with multi-year metrics (Organic Revenue growth, EPS CAGR) and long-duration time vesting, enhancing alignment .
Say-on-Pay and shareholder feedback:
- 2024 Say-on-Pay support: 94% approval .
Performance & Track Record
| Company Metric | 2023 | 2024 |
|---|---|---|
| Total Revenue ($B) | $4.257 | $4.805 |
| Net Income ($M) | $871 | $993 |
| Diluted EPS ($) | $3.05 | $3.46 |
| Organic Revenue Growth (%) | 10.3% | 10.4% |
| Adjusted EBITDAC Margin (%) | 34.2% | 35.3% |
| Acquisitions (Count; Revenues) | — | 32; ~$174M |
| 2024 TSR (%) | — | +44% |
As Chief Acquisitions Officer, Penny’s personal objectives emphasize disciplined acquisition processes and integration execution; the Compensation Committee assessed his personal objectives at 175% of target for 2024 .
Compensation Structure Analysis
- Increase in fixed vs. variable pay: 2024 base (+$100k) and target cash incentive (+$100k) were market-aligned adjustments; the majority of long-term equity remains performance-based (75% PSAs) with stringent multi-year targets and five-year cliff vesting, sustaining risk-taking alignment .
- No options/repricing: The 2019 SIP does not grant stock options or SARs; no option repricing disclosed, reducing “repricing” red-flag risk .
- Clawback and anti-hedging/pledging policies: Strong governance mitigates misalignment risks and insider selling pressures linked to hedging/pledging .
Risk Indicators & Red Flags
- Pledging/Hedging: Prohibited for executives under guidelines; no pledging disclosed for Penny (contrast: a different executive has pledged shares) .
- Legacy PSP excise tax gross-ups: Limited to terminated PSP awards on certain events; no new gross-ups added .
- Change-in-control vesting: Double-trigger equity vesting under SIPs could accelerate vesting post-CIC with termination, representing standard market practice but a potential retention/topic of interest in event-driven scenarios .
Equity Ownership & Alignment Indicators
- Material “skin-in-the-game”: 702,589 shares beneficially owned, including significant joint holdings with spouse and retirement plan shares; combined with long-duration unvested awards, indicates alignment and low pledging risk .
- Ownership guidelines: Minimum 3x base salary for Section 16 officers; company discloses strong ownership culture and guideline framework .
Employment Terms
- Broad CIC protection to “equivalent terms and benefits” for comparable roles, plus double-trigger vesting in equity plans, and two-year non-solicit; employment is at-will, preserving flexibility but with retention levers through long-term equity .
Investment Implications
- Alignment: High proportion of performance-based equity with rigorous three-year Organic Revenue and EPS CAGR metrics plus five-year cliff vesting supports shareholder alignment and reduces short-term selling pressure .
- Retention: Strong realized and unrealized equity value with long vesting horizons and codified non-solicit provisions lower near-term departure risk; however, double-trigger vesting in CIC scenarios is event-sensitive .
- Execution: 2024 acquisitions volume and quality, coupled with elevated personal objective payout (175%), indicate continued effectiveness in inorganic growth—relevant for roll-up momentum and revenue compounding .
- Pay-for-performance: Cash incentive outcomes directly linked to company Organic Revenue and margin targets (200% and 176% payouts), suggesting predictable linkage of compensation to core operating KPIs; say-on-pay support at 94% reduces governance overhang risk .