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Message from our Board Chair |
Apart from those of us with a great passion for risk management and insurance—and the intrinsic benefit they deliver to businesses, individuals, and families—insurance does not typically make it onto the Top 10 list of popular conversation topics.
Last year, however, insurance discussions happened more frequently, driven by challenging factors affecting coverage costs. The hard insurance market reached its sixth year, fueled by social inflation on the liability side and by rising catastrophe losses and higher repair and replacement costs on the property side. Compounding that, macroeconomic conditions—inflation and interest rates—squeezed many Clients’ finances.
Initiating conversations with Clients about these challenges enabled us to get to work finding solutions for them. Our teams responded with characteristic Grit (one of our core values) to redesign Clients’ insurance architecture, whether by enhancing their risk mitigation practices, changing their risk transfer and risk assumption balance, or shifting them to a new insurer. As a result, we maintained our superior Client retention rate.
For BRP, 2023 was a powerful year of transition in our growth journey. After three-plus years of hypergrowth-focused capital allocation, we took deliberate steps to address the resulting stresses this placed on our firm by integrating all our systems, processes, and technologies. In the mid- and long-term, these integration investments have and will make us a stronger, more cohesive firm that can leverage Client relationship strengths and our culture for both sustainable and outlier growth and financial performance.
Creating a transcendent brand begins with culture
Delivering results for all our Stakeholders is driven by our aspiration to become a transcendent brand—a quest we continually strive toward, even though it may never be fully achieved.
Our ability to realize this vision starts with intentionally curating and nurturing our Colleague experience, engagement, and culture. After all, it’s our people who build the strong relationships we have with Clients, foster innovation, develop insurance solutions, deliver exceptional service, and design the systems and processes to support these efforts.
We have created a Colleague experience that truly differentiates our firm through a combination of:
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• | Building a values-based culture so distinct that esteemed new Colleagues immediately recognize that it’s the right place for them; and |
• | A special alchemy created when our Colleagues, leaders, and entrepreneurs deliver outcomes that would not have been possible without their collaboration and collegiality. |
As a result of creating this compelling culture and experience, we’re proud to consistently earn external recognition as a great place to work, which helps us continue to attract the best and brightest talent. Most recently, we were privileged to be recognized on the USA Today/Top Workplaces USA list for the fourth consecutive year, ranking 14th nationally in the 2,500+ colleague category.
Building strong client relationships
When Colleagues collaborate and perform in this kind of environment, it translates to an engaging and compelling Client experience. Insurance is fundamentally a relationship business. That’s why one of our bedrock foundational beliefs is to establish and nurture long-term Client relationships built on an abundance of trust, respect, commitment, communication, and—when those are working well—the ability to recover when the unexpected occurs.
Consolidating and streamlining our family of brands will enable us to cultivate enduring relationships with a broader range of clients by showcasing the full breadth of solutions we offer to support every phase of their adult lives. For example, a young adult may first become a client by purchasing a renter’s policy, then transition to a homeowner’s policy when they start a family, secure commercial coverages if they open a small business, and eventually purchase high-value property and liability coverages after achieving great success in their career.
Transcendent brands will embrace intelligent automation, and we support both the Colleague and Client experiences with advanced technologies. For Colleagues, our goal with technology is to enable them to achieve deeper fulfillment by focusing their work more on creating value for Clients and their own careers and less on mundane, task-oriented activities. For Clients, our current and developing solutions and technologies are designed to make it easier to do business with us and enhance the experiences they deliver to their own customers and stakeholders, allowing them to focus on what matters most in their personal and professional pursuits.
Delivering industry-leading growth
The alchemy of differentiated Client service and solutions, innovation and technology, and our unique culture working together leads to a firm that executes extremely well and delivers outstanding financial metrics, as evidenced in these growth highlights in 2023:
• | Total revenue growth of $237.8 million—and the leap from approximately $150 million in 2019 to more than $1.2 billion in 2023 is one of the most compelling stories ever in our industry |
• | Organic growth of 19%(1) in 2023 with strong underlying sales velocity |
• | Adjusted EBITDA growth of 27%(1) |
• | Free cash flow growth of 6%(1), despite a 68% jump in cash paid due to rising interest rates |
As we look ahead to our fifth anniversary as a public company, we are better positioned than ever to put our unique blend of strengths to work and deliver powerful results for all our Stakeholders.
Thank you for your investment and confidence in us.
Sincerely,
Lowry Baldwin, Board Chair
(1) | Organic revenue growth, adjusted EBITDA and free cash flow are non-GAAP measures. Refer to the Appendix to this Proxy Statement for reconciliations of non-GAAP financial measures to comparable GAAP financial measures. |
BRP Group, Inc.
4211 West Boy Scout Blvd., Suite 800
Tampa, Florida 33607
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Notice of 2021 Annual Meeting of Shareholders
Dear fellow shareholders:Shareholders:
We are pleased to invite you to the 20212024 Annual Meeting of Shareholders (the “Annual Meeting”) of BRP Group, Inc. (the “Company,” “BRP Group,” “we,” “us” or “our”), which will be held on June 16, 2021,5, 2024, at 10:00 AM Eastern Daylight Time, at 4211 W. Boy Scout Boulevard, Suite 800, Tampa, Florida 33607. At the meeting, shareholders who owned our common stock at the close of business on April 19, 20218, 2024 (the “Record Date”) are entitled to vote on each item described in this Proxy Statement and we will transactconsider and act upon such other business as properly comes before the meeting.Annual Meeting.
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1 | To elect three Class II Directors to serve until the 2027 Annual Meeting of Shareholders or until their successors are duly elected and qualified. | ✓ FOR each nominee | 54 | |||||
2 | To approve, on an advisory basis, the compensation of our named executive officers. | ✓ FOR | 55 | |||||
3 | To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2024. | ✓ FOR | 56 |
The notice for thisNotice of Internet Availability of Proxy StatementMaterials was first sent to shareholders on or about April 27, 2021.25, 2024. It is being furnished in connection with the solicitation of proxies by the board of directors (the “Board” or the “Board of Directors”) of the Company to be voted during the Annual Meeting for the purposes set forth in this notice of Annual Meeting. Shareholders of record at the close of business on the Record Date are entitled to participate in and vote at the Annual Meeting.
You may vote your shares in advance of the Annual Meeting via the Internet, by telephone or, if you choose to receive a paper proxy card, by mailing the completed proxy card. Voting instructions are provided in the Notice of Internet Availability of Proxy Materials, or, if you receive a paper proxy card by mail, the instructions are printed on your proxy card.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on June 5, 2024 at 10:00 AM Eastern Daylight Time. | ||||
The Proxy Statement and Annual Report to shareholders are available at www.ProxyVote.com. |
By order of the Board of Directors,
Lowry Baldwin
Board Chair
April 27, 202125, 2024
Message from our Board Chair
Proxy Statement Table of Contents |
Dear shareholders, colleagues and stakeholders,
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PROPOSAL NO. 2 Approval, on an Advisory Basis, of Named Executive Officer Compensation | 55 | |
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BRP Group at a Glance |
Who We Are
BRP Group is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources, technology and capital to drive both organic and inorganic growth. When we consistently execute for these key Stakeholders, we believe that the outcome is an increase in value for our fifth stakeholder, our shareholders. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits. Our growth plan includes continuing to recruit, train and develop industry leading talent, continuing to add geographic representation, insurance product expertise and end-client industry expertise via our Partnership strategy, and continuing to buildout our MGA of the Future platform, which delivers proprietary, technology-enabled insurance solutions to our internal risk advisors as well as to a growing channel of external distribution Partners. We are a destination employer supported by an award-winning culture, powered by exceptional people and fueled by industry-leading growth and innovation.
In 2011, we adopted the “Azimuth” as our corporate and cultural constitution. Named after a historical navigation tool used to find “true north,” the Azimuth asserts our core values, business basics and stakeholder promises. The ideals encompassed by the Azimuth support our mission to deliver indispensable, tailored insurance and risk management insights and solutions to our Clients. We strive to be regarded as the preeminent insurance advisory firm—fueled by relationships, powered by people and exemplified by client adoption and loyalty. This type of environment is upheld by the distinct vernacular we use to describe our services and culture. We are a Firm, instead of an agency; we have Colleagues, instead of employees; and we have risk advisors, instead of producers/agents. We serve Clients instead of customers and we refer to our strategic acquisitions as Partnerships. We refer to insurance brokerages that we have acquired, or in the case of asset acquisitions, the producers, as Partners.
What We Do
While what we do may not elicit much intrigue or excitement for the average person, (try bringing up “insurance distribution” at your next dinner party!), but it enhances the lives of millions of people, is essential to the stability of families, businesses and political systems, and is in the process of an exciting transformation. Let me make that case for you.Simply put:
ThisInsurance is vital. Insurance plays pivotal roles in society that often go unnoticed: itunnoticed. It protects against loss, efficiently fills social security gaps, enables innovative actions that would otherwise be too risky, enhances fairness and equitable sharing of risks, and protects the things we value most—our loved ones, homes, businesses, income, passions, and peace of mind.
ThisInsurance is what we love. I believe that The insurance distributionbusiness is simply one of the best businesses in the world: it has generatedworld. It generates resilient and highly durable revenue streams across market and economic cycles, requiredrequires minimal capex, and when done thoughtfully and prudently, has beenis exceptionally scalable. At the same time,Particularly in today’s ever-changing environment, I believe it hasthere is great untapped potential to leverage technology to provide better, broader, bespoke and more cost-accessible and profitable products. Put those
We represent over two together and it is hard to imagine a more exciting and fulfilling business to be in.
This is what we know. Our investment in our colleagues and technologymillion Clients across the BRP Group platform has yielded consistent double-digit organic growth every year since BRP’s founding in 2011,United States and our advantages were showcased in 2020 when it took us less than 24 hours to transition to a fully remote work environment, all while maintaining exceptional, uninterrupted client service. And weinternationally. Our nearly 4,000 Colleagues include approximately 700 Risk Advisors, who are just beginning…we went public in October of 2019!
This is what drives us. BRP Group’s industry-leading growthfiercely independent, relentlessly competitive and innovation continues to be driven by an inspirational and aspirational vision: the nurturing of a tribe-like culture and the alchemy of exceptional people. We are colleagues, not employees. Every new hire is awarded equity in BRP Group and given access to our substantial education platform and benefits programs, and no colleague is paid less than a living minimum wage of $15 an hour. At BRP Group, we are naturally diverse across many categories. Women comprise 65.7% of our colleague workforce, and 54% of our leadership positions are held by women. We also benefit from a wide age range and experience level within the firm, with more than 51% of our colleagues falling within an age-protected category. During the pandemic, we made no layoffs or pay reductions as a result of COVID-19, and we continue to hire new colleagues. We also regularly solicit colleague feedback and share the results of their input.
“insurance geeks.” We have a governance structure that has the protective featuresapproximately 115 offices in 24 states, all of many new companies—it does not fit the big-company mold, but, then again, neither do we—which are equipped to provide diversified products and we continually evaluateservices to empower our Clients at every aspect ofstage through our business as we grow.three operating groups.
In the interim, the board of directors asks for your voting support for the items described in the pages that follow, and we thank you for your interest in BRP Group. Your thoughts and perspectives are welcome throughout the year.
Sincerely,
Lowry Baldwin
Board Chair
Proxy Statement Table of Contents
Notice of 2021 Annual Meeting of Shareholders
Message from our Board Chair
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As an independent insurance distribution firm, we enable and protect many of the things people value most. Whether it is our active support of small businesses, our protection of peoples’ homes, our creation of exceptional jobs, or simply our provision of risk management and peace of mind, our investments in technology and focus on human capital management practices help us serve our clients in more individual, durable and cost-effective ways.
What differentiates us is that, unlike many public companies, which rely primarily on governance processes and structuresWe strive to create an ownership culture and enduringthat we believe maximizes value we also rely on real owners. Eighty percent of the non-employee membersfor all of our board of directors have invested personally in the Company. OurStakeholders. To that end our Board Chair, Chief Executive Officer Chief Strategy Officer, Chief Partnership Officer,and President, BRP and Chief OperatingExecutive Officer, Retail Brokerage Operations have the majority of their net worth invested in the Company. In addition, we grant shares of Company stock to every full-time colleague. So, while our governance structure doesn’t fit the model currently in vogue, it doesn’t have to.Colleague. We don’t just act like owners; we are owners.
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Our Core Values
Our core values define who we are and what we stand for. We use them to guide our thoughts and actions when taking care of our Stakeholders.
How We Did in 20202023
Despite 2020’s challenges,During 2023, we grewdelivered total revenue 75% overallgrowth of 24%, organic revenue growth of 19%(1), GAAP net loss of $164.0 million, or $1.50 per fully-diluted share, adjusted EBITDA of $250.2 million(1), or 27%(1) growth year over year, adjusted EBITDA margin of 21%(1), and had an industry-pacingadjusted net income of $131.1 million(1), or $1.12(1) per fully-diluted share. These successes are primarily attributable to organic growth rate. We achieved these while transitioningrelated to new and renewal business across Client industry sectors and continued outperformance from our MGA of the Future platform. In addition, we had net cash provided by operating activities of $44.6 million and free cash flow of $60.6 million(1), or 6% growth year over year, despite a virtual-first environment68% increase in less than 24 hours, adding approximately a thousand new colleagues, launching new brands, and adding to our stable of key partners.cash paid for interest for the same period.
We are all colleagues and fellow shareholders and it showsDuring 2023, we remained focused on investing in our operationsfuture as we continued to launch new products in our MGA of the Future product suite, which delivers proprietary, technology-enabled insurance solutions internally via our Risk Advisors and programs. For example:externally via a growing channel of select distribution partners; expanded the distribution footprint of our national mortgage and real estate channel; and developed talent to support the growth of our business.
Our leadership diversity largely mirrors our workforce diversity—54% of our leadership positions are held by colleagues who identify as female, and 65.7% of our colleagues identify as female.
(1) | Organic revenue growth, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted diluted EPS and free cash flow are non-GAAP measures. Refer to the Appendix to this Proxy Statement for reconciliations of non-GAAP financial measures to comparable GAAP financial measures. |
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Our extensive mentoring, leadership, learningWe highly value the powerful and development programs help turn jobs into careersinnovative results that come from seeking and are partly responsible for our strong employee retention data.
Our extensive benefits programs reflect our holistic treatmentweighing a broad range of our colleaguesperspectives and understandingwe strive to hire and promote talent that brings wide ranging diversity of practices that get the best from our people. These include:thought, background, and experience.
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We endeavor to create a sense of belonging for our Colleagues. One way we do this is by building a firm that is “better together.” We operate with transparency and make it easy for others to know us and trust us by striving to always do the right thing in an open and authentic way. We actively seek out our Colleagues’ input through our formal and anonymous PULSE survey, which we use to solicit feedback on a variety of topics including career path opportunities, trust in team and leadership, and feeling valued. The results of this annual pulse check are always shared with Colleagues and leadership so thoughtful and meaningful improvements can be made to enhance engagement.
Another way we create a sense of belonging for our Colleagues is by striving to be a destination employer. We are continuously recognized for our people-first approach, our commitment to a culture of continuous learning, and for providing a place where our Colleagues learn, grow, and thrive.
• | We continued to be Great Place to Work-Certified™ and once again ranked as a Fortune Best Workplaces in Financial Services and Insurance™ in 2023. |
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We care about our Colleagues and their families from a holistic perspective and genuinely believe that taking great care of our Colleagues allows them to live their best life. We offer comprehensive benefits such as health care and retirement savings through an employer-match 401(k) plan, along with a variety of other personalized benefits valued by our Colleagues, such as:
• | Summertime Friday half-days; |
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To support the ongoing growth and development of our Colleagues, we provide education and training on a variety of topics and through several means, including:
• | Continued development of the Azimuth Institute, a three-to-five-year project to provide both foundational training and a learning journey for all our Insurance Advisory Solutions client-facing roles in the areas of job skills, system training, insurance acumen, power skills, business development and leadership training for leaders. |
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• | Offered a catalog of more than 400 custom-built training courses, all designed in-house to support individual growth and professional development. |
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Our Board of Directors and Director Nominees |
Our Board of Directors andDirector Nominees
Trevor Baldwin Director since 2019 (Non-Independent) Chief Executive Officer and Son of Lowry Baldwin
| Experience
• • In 2011, co-founded Baldwin Risk Partners,
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• Prior to joining Baldwin Risk Partners, worked at HealthEdge Investment Partners, LLC, a private equity firm
Education
• BA in Risk Management & Insurance, Florida State University
Other Professional and Charitable Affiliations • Manager, Emerald Bay Risk Solutions, LLC
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Jay Cohen
Director since (Independent) Member of Audit Committee and Compensation Committee
Age: | Experience
• From
• From
• From
Education
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• Board Member,
• Insurance and Financial Analysts
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Director since February 2020 (Independent) Chair of Audit Committee and
Age: 64 | Experience
• From 1999 to 2016, held various leadership positions with Citigroup, such as Managing Director, Head and Co-Head and Chairman of Leveraged Finance Capital Markets • From 1985 to 1999, served as a banker in the high-yield capital markets groups of Citicorp and Salomon Brothers Education • MBA in Finance, University of Michigan • BS in Accounting and Quantitative Analysis, New York University Other Public Company Boards • Board Member, Nominating and Corporate Governance Committee Member, and Chair of Audit Committee, MidCap Financial Investment Corporation (formerly Apollo Investment Corporation) (2017 to present) • Board Member, Chair of Capital Allocation Committee, Audit Committee Member, and former Chair of Audit Committee, Sleep Number Corporation (2016 to present) Other Professional and Charitable Affiliations • Board Member and Chair of the Investment Committee, DOROT • Board Member, Middle Market Apollo Institutional Private Lending BDC |
Other Current Directors
Lowry Baldwin Director since 2019 (Non-Independent) Board Chair and Member of Father of Trevor Baldwin Age: 65 | Experience • Board Chair since formation of BRP Group, Inc. in 2019 • In 2011, co-founded Baldwin Risk Partners, LLC with his partners, Trevor Baldwin, Elizabeth Krystyn and Laura Sherman, to serve as a holding company for further investment into the insurance brokerage space • In 2006, formed what is today our middle market business with his partners • In 1997, co-founded Advantec Solutions, Inc., a national professional employer organization serving small and mid-size businesses by providing outsourced payroll, human resources, employee benefits and benefits administration, and workers’ compensation • In 1991, co-founded Davis Baldwin Insurance and Risk Management • In 1983, joined Baldwin & Sons • In 1981, began insurance career at Aetna Property & Casualty Education • BS in Psychology, Wake Forest University |
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Joseph Kadow Director since February 2020 (Independent) Chair of Nominating and Age: 67 | Experience • From 2005 to July 2019, served as Executive Vice President and Chief Legal Officer, Bloomin’ Brands, Inc.,
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• Past
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Other Professional and Charitable Affiliations • Past Chairman of the Board, National Restaurant Association • Board Member, Florida Restaurant and Lodging Association • Board Member, Florida Bar Foundation • Avent Allen International, LLC, Chief Legal and Business Affairs Officer | ||
Sathish Muthukrishnan
Director since (Independent) Chair of Technology & Cyber Risk Committee
Age: | Experience
• Since January 2020, serves as Chief Information, Data and Digital Officer at Ally Financial, Inc. • From 2017 to 2020, served as Chief Digital & Information Officer and Chief Technology Officer at Honeywell Aerospace • From 2007 to 2017, served as CIO - Enterprise Digital at American Express • From 1999 to
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Advisory Board Member, WIT International
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Sunita Parasuraman Director since January 2022 (Independent) Member of Audit Committee Age: 51 | Experience • From 2020 to 2023, served as Head of Investments, New Product Experimentation at Meta (previously Facebook) • From 2018 to 2020, served as Head of Treasury for Facebook’s blockchain initiative • From 2011 to 2018, served as Global Head of Treasury for Facebook Education • M.B.A. in Finance, University of California, Berkeley • Master in Engineering, University of Pennsylvania • BS in Engineering, Indian Institute of Technology, Bombay Other Public Company Boards • Board Member and Audit Committee Chair, Iris Energy Limited Other Professional and Charitable Affiliations • Board Member and member of the Finance, Governance, and Nomination committees of the IIT Bombay Heritage Foundation • Board Member, Sri Ramana Maharshi Heritage • Board Member, DVLP Medicines | |
Ellyn Shook
Director since (Independent) Chair of Compensation Governance Committee
Age: | Experience
• Since March 2014, serves as Chief Leadership and Human Resources Officer for Accenture • From 2004 to 2014, served in Chief Human Resources and Global Human Resources roles with Accenture Education • BS in Restaurant, Hotel, and Institutional Management, Purdue University Other Professional and Charitable Affiliations • Executive Committee Member, Professional Roundtable of CHROs • Board Member, World Economic Forum’s Global Shaper Community Foundation, Women’s Leadership Board of the Women and Public Policy program at Harvard’s Kennedy School, Paradigm for Parity, the HR Policy Association, and Center on Executive Compensation |
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Chris Sullivan Director since 2019 (Independent) Member of Compensation Age: 76 | Experience • From 1991 to 2005, served as Chief Executive Officer and Chairman of OSI Restaurant Partners, Inc.
• From 1988 to 1991, was the co-founder, Chairman, and Chief Executive Officer of Outback Steakhouse
Education
• BS in Business and Economics, University of Kentucky
Other
• Co-Chair, Consul Partners LLC • Past Chairman, Florida Council of
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• Board Member and Executive Committee Member, Horatio Alger Association • Member of Board, The First Tee of Tampa Bay and Copperhead Charities
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Myron Williams
Director (Independent) Member of Compensation Committee and Nominating and Corporate Governance Committee
Age: | Experience
• From • From 1984 to 2017, served in various roles at United Parcel Service Inc., including U.S. Director of
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• BA in
Other
• Chairman of the Board, Atlanta Public Schools CTAE Board • Advisory Board Member,
• Board Member,
• Previously served as Board Member, the 100 Black Men Board
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OurBoard Qualifications, Skills and Expertise
The matrix below sets forth certain qualifications, skills, and expertise for our board members. Our boardBoard members bring to the full board strong and varied skills and experiences in areas of importance to our Company and its future. The checks in the following chart reflectSkills Chart below reflects areas of primary or important expertise oras well as those of deep experience but are not meant to suggest that other directors do not also have capabilities in those categories. In addition, this matrix captures some of the more central skills and experiences important to our Company and is not intended to capture the much broader, and steadily changing, sets of skills and experiences that are valuable to our board.skill for each director.
How We are Selected, Elected and Refreshed
We are a relatively new public company with a short-tenured board, but we have already undertaken steps to start our first round of both board and committee self-evaluations. We expect to start those evaluations in the second quarter of 2021.Board Selection
Pursuant to our certificationCertificate of incorporation as adopted in October 2019,Incorporation, our boardBoard of directorsDirectors is divided into three classes of directors who serve staggered three-year terms, with each class as equal in number as possible. At each annual shareholder meeting, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification untilEach director holds a term ending on the third annual meeting of shareholders following election. Our directors are divided among the three classes as follows:
The Class I directors are Lowry Baldwin and Phillip Casey, whose terms expire at the annual shareholder meeting to be held in 2023;at which the director was elected. Our Board currently consists of ten members, each of whom has deep knowledge of the Company.
The Class II directors are Trevor Baldwin, Robert Eddy and Barbara Matas, whose terms expire at the Annual Meeting.Meeting are Trevor Baldwin, Jay Cohen and Barbara Matas. At the Annual Meeting, the boardBoard of Directors is recommending that the election ofshareholders elect Trevor Baldwin, Jay Cohen and Barbara Matas and Jay Cohento serve as Class II directors for a term ending at the annual shareholder meeting of shareholders to be held in 2024; and2027.
The Class IIIother classes of our directors are Chris Sullivan and Joseph Kadow, whose terms expire at the annual shareholder meeting to be held in 2022.as follows:
• | The Class I directors are Lowry Baldwin, Sathish Muthukrishnan, Sunita Parasuraman and Ellyn Shook, whose terms expire at the annual meeting of shareholders to be held in 2026; and |
• | The Class III directors are Joseph Kadow, Chris Sullivan and Myron Williams, whose terms expire at the annual meeting of shareholders to be held in 2025. |
Each director is to holdholds office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. Vacancies and newly created directorships on the boardBoard of directorsDirectors may be filled at any time by a majority vote of the remaining directors. Subject to obtaining any required shareholder votes, directors may only be removed for cause and by the affirmative vote of holders of 75% of the total voting power of our outstanding shares of common stock, voting together as a single class. This requirement
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We are a party to a Stockholders Agreement entered into in connection with our initial public offering. Pursuant to the terms of a super-majority vote to remove directors for cause could enable a minority of our shareholders to exercise veto power over any such removal.
Forthe Stockholders Agreement, so long as certain historical members (the “Pre-IPOthe owners of LLC Members”)units of Baldwin Risk Partners, LLC (“BRP”) prior to our initial public offering (the “Pre-IPO LLC Members”) and their permitted transferees (collectively, the “Holders”) beneficially hold at least 10% of the aggregate number of outstanding shares of our common stock (the “Substantial Ownership Requirement”), the Pre-IPO LLC Members holding a majority of the shares of Class B common stock held by the Pre-IPO LLC Members will be able toHolders may designate a majority of the nominees for election to our boardBoard of directors,Directors, including the nominee for election to serve as Chair of our board of directors.Board Chair. The Pre-IPO LLC MembersHolders have not utilized this right of nomination in connection with this Annual Meeting. We also entered into a consent and defense agreement with regard to the Stockholders Agreement. Refer to “Transactions with Related Persons”—“Stockholders Agreement” for more information regarding the Stockholders Agreement and the consent and defense agreement.
Like many relatively new public companies, we have a small board—seven members—each of whom has deep knowledgeBoard Diversity
The table below provides certain highlights of the Company. We consider both the board’s small size, its members’ skillscomposition of our Board of Directors and experiences, and their deep understandingour nominees as proposed. Each of the Company to be important duringcategories listed in the table below has the meaning as it is used in Nasdaq Global Select Market (“Nasdaq”) Listing Rule 5605(f).
Board Diversity Matrix | ||||||||
Total Number of Directors 10 | ||||||||
Female | Male | |||||||
Part I: Gender Identity | ||||||||
Director | 3 | 7 |
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Part II: Demographic Background | ||||||||
African American or Black | 0 |
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Asian | 1 |
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White | 2 |
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Did Not Disclose Demographic Background | 0 |
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Board Organization and Board Leadership Structure
In accordance with our early years as a public company.
We are now, however, beginningCertificate of Incorporation and By-Laws, the organic process of casting a wider net for director candidates who bring the diversity of skills and attributes and the “fresh eyes” that we believe will be valuable to us as we move forward. We intend to increase our number of directors on our Board of Directors is determined from time to time by at least two and are seeking director candidates as partthe Board of this process. We are also actively looking to increase the gender, racial, ethnic and orientation compositionDirectors but may not be less than three persons nor more than 13 persons.
Our Board Chair, Lowry Baldwin, is one of our board.founding members and is a non-independent, employee director. We are pleasedalso have a lead independent director, Chris Sullivan. The lead independent director`s responsibilities include, among others, calling meetings of the independent directors, presiding over executive sessions of the independent directors, participating in the formulation of Board and committee agendas and, if requested by shareholders, ensuring that our directorhe is available, when appropriate, for consultation and direct communication. Our Board of Directors currently consists of ten directors, eight of whom—Jay Cohen, Joseph Kadow, Barbara Matas, who chairsSathish Muthukrishnan, Sunita Parasuraman, Ellyn Shook, Chris Sullivan and Myron Williams—the Board determined qualify as independent directors under Nasdaq’s corporate governance standards and applicable Securities and Exchange Commission (“SEC”) rules.
The Company had a consulting agreement with Accenture that terminated in January 2023. Ellyn Shook, an independent member of our Nominating and Corporate Governance Committee, is spearheading this effort. We believe that this natural refreshment and growth process will complement the already strong diversity we have achieved in ourBoard of Directors, holds an executive leadership ranks and in our workforce as a whole.
Howposition at Accenture. Our Board is Organizedof Directors has evaluated the Company’s relationship with Accenture and determined that Ms. Shook does not have any direct or indirect material interest in the transaction, and that her independence remains unaffected. The amounts paid to Accenture in connection with such relationship are significantly less than 1% of either party’s reported revenues for the year ended December 31, 2023.
Lowry Baldwin serves asThe independent members of our Board Chair. In the ordinary course, the board of directors meetsDirectors meet in executive session amongst non-management directors, which are presided over by an independent director, at each regularly scheduled quarterly board meeting.quarterly. We also have fully independent Audit, Compensation, and Nominating and Corporate Governance, committeesand Technology & Cyber Risk Committees along with governance practices that promote independent leadership and oversight.
The boardOur Board of directorsDirectors believes that our current structure achieves an appropriate balance between the effective development of key strategic and operational objectives and independent oversight of management’s execution of such objectives. Additionally, the boardBoard of directorsDirectors will continue to periodically review its leadership structure and will modify it as it deems appropriate.
The board In making recommendations to the Company’s Board of nominees to serve as directors, oversees the strategyNominating and material risks facingCorporate Governance Committee examines each director nominee on a case-by-case basis regardless of who recommended the Company. If there are any material environmentalnominee and social risks affectingtakes into account all factors it considers appropriate, including independence, financial literacy and financial expertise. In evaluating director nominees and recommending candidates for election to the Company, those risks would be overseen byBoard of Directors, the full board.
Our board of directors has four standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and anthe Board of Directors, in approving (and, in the case of vacancies, appointing) such candidates, may take into account many factors, including judgment, diversity, age, skills, background and experience, independence, financial literacy and financial expertise standards that may be required under law or Nasdaq or SEC rules for Audit Committee or other Committee membership.
The Nominating and Corporate Governance Committee may consider candidates recommended by directors and members of management and may, in its discretion, engage one or more search firms to assist in the recruitment of director candidates.
The Nominating and Corporate Governance Committee will consider shareholder recommendations for director candidates. A shareholder recommendation must be submitted to the Nominating and Corporate Governance Committee, 4211 W. Boy Scout Boulevard, Suite 800, Tampa, Florida 33607, Attention: General Counsel.
Committee Composition
Our Board of Directors has the following standing Committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, Technology & Cyber Risk Committee and Executive Committee. BelowOur Committee composition is a brief description of our committees.set forth in the table below:
Independent Director | Audit Committee | Compensation Committee | Executive Committee | Nominating and Corporate Governance Committee | Technology & Cyber Risk Committee | |||||||||
Lowry Baldwin | ![]() | |||||||||||||
Trevor Baldwin | ![]() | |||||||||||||
Jay Cohen | ![]() | ![]() | ![]() | |||||||||||
Joseph Kadow | ![]() | ![]() | ![]() | |||||||||||
Barbara Matas | ![]() | ![]() | ![]() | |||||||||||
Sathish Muthukrishnan | ![]() | ![]() | ||||||||||||
Sunita Parasuraman | ![]() | ![]() | ![]() | |||||||||||
Ellyn Shook | ![]() | ![]() | ![]() | |||||||||||
Chris Sullivan | ![]() | ![]() | ![]() | ![]() | ||||||||||
Myron Williams | ![]() | ![]() | ![]() | |||||||||||
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Audit Committee
Our Audit Committee members currently include Phillip CaseyBarbara Matas (Chair), Jay Cohen, Joseph Kadow and Barbara Matas. If elected to the board at the Annual Meeting, Jay Cohen will replace Barbara Matas on the Audit Committee.Sunita Parasuraman. The boardBoard of directorsDirectors has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as such term is defined under the rules of the Securities and Exchange Commission (“SEC”)SEC implementing Section 407 of the Sarbanes-Oxley Act of 2002 and is “independent” for purposes of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and under the governance standards of Nasdaq Global Select Market (“Nasdaq”). We believe that our Audit Committee complies with the applicable requirements of Rule 10A-3 and Nasdaq’s governance standards, including that our board has determined each audit committee member to be independent.Nasdaq. Our Audit Committee is directly responsible for, among other things:
selecting a firm to serve as the independent registered public accounting firm to audit our financial statements;
• | selecting a firm to serve as the independent registered public accounting firm to audit our financial statements; |
ensuring the independence of the independent registered public accounting firm;
• | ensuring the independence of the independent registered public accounting firm; |
discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and that firm, our interim and year-end operating results;
• | discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and that firm, our interim and year-end operating results; |
establishing procedures for employees to anonymously submit concerns about questionable accounting or audit matters;12
• | establishing procedures for Colleagues to anonymously submit concerns about questionable accounting or audit matters; |
considering the adequacy of our internal controls and internal audit function;
• | considering the adequacy of our internal controls and internal audit function; |
reviewing material related person transactions or those that require disclosure; and
• | oversight responsibility for enterprise risk management; |
• | reviewing material related person transactions or those that require disclosure; and |
approving or, as permitted, pre-approving all audit and non-audit services to be performed by the independent registered public accounting firm.
• | approving or, as permitted, pre-approving all audit and non-audit services to be performed by the independent registered public accounting firm. |
Our Audit Committee Charter is available on our website at ir.baldwinriskpartners.com. To access the charter, go to our website, click on “Governance” and then click on “Governance Overview.”
Compensation Committee
Our Compensation Committee members currently include Joseph KadowEllyn Shook (Chair), Robert Eddy, and Chris Sullivan. If elected to the board at the Annual Meeting, Jay Cohen, will replace Robert Eddy on the Compensation Committee.Chris Sullivan and Myron Williams. All of the members of our Compensation Committee are non-employee directors, as defined by Rule 16b-3 promulgated under the Exchange Act and meet the requirements for independence under Nasdaq’s governance standards. Our Compensation Committee is responsible for, among other things:
reviewing and approving, or recommending that our board of directors
• | reviewing and approving, or recommending that our Board of Directors approve, the compensation of our executive officers, and approving the disclosure of such compensation in public filings; |
• | reviewing and recommending to our Board of Directors the compensation of our directors; |
• | administering our stock and equity incentive plans; |
• | reviewing and approving, or making recommendations to our Board of Directors with respect to, incentive compensation and equity plans; |
• | reviewing our overall compensation philosophy; and |
• | reviewing and discussing with management the Company’s human capital management practices and policies, including diversity, equity, and inclusion initiatives. |
The Compensation Committee may delegate its authority to subcommittees or the Chair of the Compensation Committee when it deems appropriate and in our best interests. The Compensation Committee has delegated to Trevor Baldwin, our Chief Executive Officer, within certain parameters, the authority to make grants and awards of stock rights or options to any of our executivenon-Section 16 officers and approvingunder certain of our incentive-compensation or other equity-based plans.
In addition, the disclosure of such compensation in public filings;
reviewing and recommendingCompensation Committee may delegate to our board of directorsChief Executive Officer the compensation ofauthority to establish individual performance objectives applicable to any Colleague (other than himself) under our directors;
administering our stock and equity incentive plans;
reviewing and approving, or making recommendationsannual bonus program as in effect from time to our board of directors with respecttime (to the extent that individual performance objectives apply to incentive compensation and equity plans;
reviewing our overall compensation philosophy; and
reviewing and discussing with managementsuch Colleague for the Company’s human capital management practices and policies, including diversity, equity, and inclusion initiatives.relevant year, as determined by the Compensation Committee).
Our Compensation Committee Charter is available on our website at ir.baldwinriskpartners.com. To access the charter, go to our website, click on “Governance” and then click on “Governance Overview.”
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee members currently include Barbara MatasJoseph Kadow (Chair), Joseph Kadow,Ellyn Shook, Chris Sullivan and Chris Sullivan.Myron Williams. All of the members of our Nominating and Corporate Governance Committee are non-employee directors, as defined by Rule 16b-3 promulgated under the Exchange Act, and meet the requirements for independence under Nasdaq’s governance standards. Our Nominating and Corporate Governance Committee is responsible for, among other things:
reviewing and evaluating the size, composition (including its diversity), function and duties of the board consistent with its needs;
• | reviewing and evaluating the size, composition (including its diversity), function and duties of the Board consistent with its needs; |
recommending criteria for the selection of candidates to the board and its committees, and identify individuals qualified to become board members consistent with such criteria, including the consideration of nominees submitted by shareholders;
• | recommending criteria for the selection of candidates to the Board and its Committees, and identifying individuals qualified to become Board members consistent with such criteria, including the consideration of nominees submitted by shareholders; |
overseeing searches for and identify qualified individuals for membership on the board;
• | overseeing searches for and identifying qualified individuals for membership on the Board; |
making director recommendations to the board;13
• | making director recommendations to the Board; |
assessing the performance of directors and periodically reviewing the composition of the board and its committees;
• | assessing the performance of directors and periodically reviewing the composition of the Board and its Committees; |
leading the board in a self-evaluation process and reporting to the full board on such process;
• | leading the Board in a self-evaluation process and reporting to the full Board on such process; |
developing and recommending to the board the Company’s Code of Business Conduct and Ethics and reviewing, at least annually, the adequacy of, and compliance with, such Code; and
• | developing and recommending changes to the Board regarding the Company’s Code of Business Conduct and Ethics and reviewing, at least annually, the adequacy of, and compliance with, such Code; and |
reviewing the Company’s actions in furtherance of its corporate social responsibility, including considering the impact of Company procedures and processes on employees, citizens and communities.
• | reviewing the Company’s actions in furtherance of its corporate social responsibility, including considering the impact of Company procedures and processes on Colleagues, citizens and communities. |
Our Nominating and Corporate Governance Committee Charter is available on our website at ir.baldwinriskpartners.com. To access the charter, go to our website, click on “Governance” and then click on “Governance Overview.”
Director Nomination ConsiderationsTechnology & Cyber Risk Committee
In making recommendationsOur Technology & Cyber Risk Committee members currently include Sathish Muthukrishnan (Chair), Barbara Matas and Sunita Parasuraman. The Technology & Cyber Risk Committee is tasked with a broad range of responsibilities critical to the Company’s boardsafeguarding and strategic management of nomineesthe company’s technological and cybersecurity posture. The Committee’s duties encompass:
• | evaluating cybersecurity threats, assessing the effectiveness of security controls, and ensuring robust policies and procedures are in place to mitigate risks; |
• | overseeing the management of internal and external risks associated with information technology systems and processes; |
• | overseeing the Company’s data responsibility strategy and program, which includes ensuring compliance with relevant regulations and standards; |
• | reviewing the adequacy of cybersecurity insurance coverage to ensure it meets the Company’s needs; |
• | overseeing the execution of digital and other technology strategies, including the implementation of significant technology investments; |
• | examining controls, policies and guidelines designed to prevent, detect and respond to cyberattacks, data breaches and unplanned outages; |
• | working in conjunction with the Audit Committee to enhance visibility into the enterprise risk management framework and personnel; and |
• | reviewing the processes and controls for making required or voluntary disclosures relating to cybersecurity and data responsibility matters. |
Our Technology & Cyber Risk Committee operates under the authority granted by the Board of Directors, with the mandate to serveengage outside counsel, cybersecurity advisors, or consultants as directors, the Nominatingdeemed necessary to fulfill its responsibilities. Our Technology & Cyber Risk Committee is expected to meet regularly, at least four times per year, to ensure ongoing vigilance and Corporate Governance Committee will examine each director nominee on a case-by-case basis regardless of who recommended the nominee and take into account all factors it considers appropriate, including enhanced independence, financial literacy and financial expertise. In evaluating director nominees and recommending candidates for election to the board, the Nominating and Corporate Governance Committee and the board, in approving (and,adaptability in the caseface of vacancies, appointing) such candidates—may take into account many factors, including judgment, diversity, age, skills, backgroundevolving technology and experience, independence, financial literacycybersecurity landscapes. This expectation reflects our commitment to maintaining a proactive and financial expertise standards that may be required under law or Nasdaq rules for Auditcomprehensive approach to managing technology and cybersecurity risks, ensuring the protection of the company’s digital assets, and supporting the strategic use of technology to achieve business objectives. Our Technology & Cyber Risk Committee or other committee membership purposes.Charter is available on our website at ir.baldwinriskpartners.com. To access the charter, go to our website, click on “Governance” and then click on “Governance Overview.”
Executive Committee
Our Executive Committee members include Lowry Baldwin, Trevor Baldwin Robert Eddy, and Chris Sullivan. Our Executive Committee is responsible for, among other things, assisting our boardBoard of directorsDirectors in handling matters that need to be addressed before the next scheduled meeting of the boardBoard of directors.Directors.
Communicating with Usthe Board
Our board knowsBoard of Directors understands that the caliber of its deliberations and decisions depends in part on the quality diversity and currentness of the information it obtains. The board,Board, therefore, casts a wide net forseeks input and values information from a widean array of stakeholders.Stakeholders. Our boardBoard particularly values input from its shareholders, as they have a financial stake in the Company’s success, as well as important perspectives, data, and information. To facilitate this open dialogue, the boardBoard has created several avenues of communication and participation. These include:
participation at our Annual Meeting;
• | participation at our Annual Meeting; |
use of our whistleblowing hotline and other reporting mechanisms;
• | use of our whistleblowing hotline and other reporting mechanisms; |
participation in corporate events at which directors are present; and
• | participation in corporate events at which directors are present; and |
individual engagement meetings as appropriate.
• | individual engagement meetings as appropriate. |
In addition, should you desire to communicate directly with the board,Board, you may send written communications to our dedicated board Board e-mail address at shareholdercommunications@baldwinriskpartners.com or by mail at the following address:
Attention: General Counsel
4211 W. Boy Scout Boulevard, Suite 800
Tampa, Florida 33607
The General Counsel will forward, as appropriate, shareholder communications to relevant members of the board.Board. The General Counsel, however, reserves the right to not to forward to the boardBoard any abusive, threatening, or otherwise inappropriate materials.
How We are PaidDirector Compensation
Unlike, we believe,The Compensation Committee periodically reviews the majority of US public companies, our directors’ financial linksregular retainer paid to non-employee directors and makes recommendations for adjustments, as appropriate, to the CompanyBoard. For 2023, the Compensation Committee approved the following compensation for our non-employee directors:
Compensation Structure for Directors | Amount ($) | |||
Regular Annual Retainer | ||||
Cash | 75,000 | |||
Stock(1) | 75,000 | |||
Annual Audit Committee Chair Retainer | 20,000 | |||
Annual Compensation Committee Chair Retainer | 15,000 | |||
Annual Nominating and Corporate Governance Committee Chair Retainer | 10,000 | |||
Annual Technology & Cyber Risk Committee Chair Retainer | 15,000 |
(1) | The number of shares of Class A common stock is determined based on the closing price per share of Class A common stock on the last trading day before the beginning of the applicable fiscal quarter, rounded up to the nearest whole share. |
Members of our Board of Directors are also eligible for reimbursement for reasonable travel and other out-of-pocket expenses for meeting attendance. Directors do not receive per-meeting fees, either for Board meetings or Committee meetings. Non-employee directors are not comprised exclusively of cashentitled to retirement benefits, incentive compensation or equity that has been awarded for board service. Instead, 80% of our non-employee board members have invested personally in our shares. The compensation described in this section is therefore only a partial snapshot of their investment in and alignment with our future.perquisites.
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The table below summarizes the compensation of all of our non-employee directors and our Board Chair (rounded to the nearest dollar) for fiscal year 2020.2023. We do not provide directors who are our employeesColleagues with additional compensation for their service as directors.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | ||||||||||||
Lowry Baldwin | — | — | 622,881 | 622,881 | ||||||||||||
Phillip Casey | 60,000 | 50,000 | — | 110,000 | ||||||||||||
Robert Eddy | 50,000 | 50,000 | — | 100,000 | ||||||||||||
Joseph Kadow(3) | 37,500 | 37,500 | — | 75,000 | ||||||||||||
Barbara Matas(3) | 37,500 | 37,500 | — | 75,000 | ||||||||||||
Chris Sullivan | 50,000 | 50,000 | — | 100,000 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | ||||||||||||
Lowry Baldwin | — | — | 853,330 | 853,330 | ||||||||||||
Philip Casey(3) | 47,500 | 37,500 | — | 85,000 | ||||||||||||
Jay Cohen | 75,000 | 75,000 | — | 150,000 | ||||||||||||
Joseph Kadow | 87,500 | 75,000 | — | 162,500 | ||||||||||||
Barbara Matas | 90,000 | 75,000 | — | 165,000 | ||||||||||||
Sathish Muthukrishnan(4) | 51,250 | 37,500 | — | 88,750 | ||||||||||||
Sunita Parasuraman | 75,000 | 75,000 | — | 150,000 | ||||||||||||
Ellyn Shook | 82,500 | 75,000 | — | 157,500 | ||||||||||||
Chris Sullivan | 75,000 | 75,000 | — | 150,000 | ||||||||||||
Myron Williams | 75,000 | 75,000 | — | 150,000 |
(1) | The amounts shown represent the grant date fair value of these awards as computed in accordance with Accounting Standards Codification (“ASC”) Topic 718, |
(2) | The amount shown represents (i) salary of |
(3) | Mr. |
(4) | Mr. Muthukrishnan joined our |
Compensation for our non-employee directors during 2020 was $12,500 payable in cash each quarter and $12,500 payable in shares of Class A common stock each quarter (rounded up to the nearest whole share) and an additional $2,500 in cash payable to our Audit Committee Chair (Phillip Casey) each quarter. Members of our board of directors are also eligible for reimbursement for reasonable travel and other out-of-pocket expenses.
How we Govern and are Governed
Our board leadership structure currently separates the rolesRole of the Board Chairin Risk Oversight
Risk is inherent with every business, and Chief Executive Officer. Our Chair iswe face anon-independent, employee director. We currently have a lead independent director with a strongly delineated role, who serves as an effective and independent counterbalance to both our Chair and our Chief Executive Officer. Our board of directors currently consists of seven directors, five of whom—Phillip Casey, Robert Eddy, Joseph Kadow, Barbara Matas, and Chris Sullivan—qualify as independent directors under Nasdaq’s corporate governance standards and applicable SEC rules. If elected, the board has determined that Jay Cohen will qualify as independent under Nasdaq’s corporate governance standards.
In accordance with our certificate of incorporation and by-laws, the number of directors on our board of directors will be determined from time to time by the board of directors but shall not be less than three persons nor more than 13 persons.
Our independent directors have appointed Chris Sullivan as the lead independent director, whose responsibilities include, among others, calling meetings of the independent directors, presiding over executive sessions of the independent directors, participatingrisks, including strategic, financial, business and operational, environmental, social, cybersecurity, legal and compliance, and reputational risks, in the formulationpursuit and achievement of boardour strategic objectives. We have designed and committee agendasimplemented processes to manage risk in our operations. Management is responsible for the day-to-day oversight and if requested by shareholders, ensuring that he is available, when appropriate, for consultationmanagement of strategic, operational, environmental, social, legal and direct communication.
Meetings of thecompliance, cybersecurity, and financial risks, while our Board of Directors, as a whole and assisted by its Committees, has the responsibility for oversight of our risk management framework, which is designed to identify, assess, and manage risks to which our Company is exposed, as well as foster a corporate culture of integrity. Consistent with this approach, our Board of Directors regularly reviews our strategic and operational risks in the context of discussions with management, question and answer sessions, and reports from the management team at each regular Board meeting. Our Board of Directors also receives regular reports on all significant Committee Member Attendanceactivities at each regular Board meeting and Annual Meeting Attendanceevaluates the risks inherent in significant transactions.
During 2020, the boardIn addition, our Board of directors met 14 times, theDirectors has tasked designated standing Committees with oversight of certain categories of risk management. Our Audit Committee met five times,assists our Board of Directors in fulfilling its oversight responsibilities with respect to risk assessment and risk management, including the Company’s policies and practices pertaining to financial accounting, investment, and tax matters, and discusses with management the Company’s major financial risk exposures. Our Compensation Committee met five timesreviews and assesses risks arising from the Executive Committee met three times.Company’s compensation policies and practices and whether any such risks are reasonably likely to have a material adverse effect on the Company. Our Nominating and Corporate Governance Committee is a newly-formed committee,monitors the effectiveness of our corporate governance guidelines and as such, did not meet during 2020. Each board member attended 100%policies. Our Technology & Cyber Risk Committee oversees risks relating to cybersecurity, data and other technology-related matters. Our Executive Committee assists our Board in handling matters which, in the opinion of the meetingsBoard Chair, should not be postponed until the next scheduled meeting of the boardBoard.
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Our Board of directors andDirectors believes its current leadership structure supports the risk oversight function of the committees on which he or she served.Board of Directors. In particular, our Board of Directors believes that our lead independent director and the majority of independent directors provide a well-functioning and effective balance to the members of executive management and our Board of Directors.
Board of Directors and Committee Meetings and Attendance
Our Board of Directors and Committees had the following number of meetings and attendance in 2023:
Board or Committee(1) | Number of Meetings Held | Average Meeting Attendance | ||
Board of Directors | 10 | 96% | ||
Audit Committee | 5 | 100% | ||
Compensation Committee | 4 | 94% | ||
Nominating and Corporate Governance Committee | 4 | 94% | ||
Technology & Cyber Committee | 2 | 100% |
(1) | No Executive Committee meetings were held during 2023. |
Our Board holds executive sessions consisting of our independent directors quarterly during our regularly-scheduled Board meetings. The independent directors may also meet without management present at other times as requested by any independent director. Our lead independent director serves as Chair at the executive sessions. Average attendance of our directors at Board and Committee meetings was 97%. We encourage all of our directors and director nominees to attend our annual meetingsmeeting of shareholders.
Compensation Committee Interlocks and Insider Participation
None Attendance of our executive officers have served as a memberdirectors at our 2023 Annual Meeting of a compensation committee (or if no committee performs that function, the board of directors) of any other entity that has an executive officer serving as a member of our board of directors.Shareholders was 83%.
Code of Business Conduct and Ethics Policy
We have adopted a Code of Business Conduct and Ethics policy(the “Code”) that applies to all of our employees,Colleagues, officers and directors, including those officers responsible for financial reporting. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. OurThe Code of Business Conduct and Ethics is available on our website at ir.baldwinriskpartners.com. To access the Code, go to our website, click on “Governance” and then click on “Governance Overview.” Any waiver of the Code for directors or executive officers may be made only by our boardBoard of directorsDirectors or a board committeeBoard Committee to which the boardBoard has delegated that authority and will be promptly disclosed to our shareholders as required by applicable U.S. federal securities laws and the corporate governance rules of the Nasdaq. Amendments to the codeCode must be approved by our boardBoard of directorsDirectors and will be promptly disclosed in accordance with applicable U.S. federal securities laws (other than technical, administrative or non-substantive changes). Any amendments to the Code, or any waivers of its requirements for which disclosure is required, will be disclosed on our website.
Policy Concerning Trading in Company Securities
Stock Ownership Guidelines
Pursuant to our Stock Ownership Guidelines, our non-employee directors, executive officers and certain other senior executives (“Covered Individuals”) will in the future be expected to maintain a minimum ownership interest in BRP Group. These guidelines embody our Compensation Committee’s belief that our directors and most senior executives should maintain a significant personal stake in BRP Group to align the financial interests of such Covered Individuals with our shareholders’
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Hedginginterests, which reduces the incentive for excessive short-term risk taking. Under the guidelines, each Covered Individual is expected to meet the following ownership goal within five years of February 24, 2022 or within five years of first election or appointment as a Covered Individual, whichever is later:
Category of Covered Individual | Ownership Goal | |
Non-Employee Director | 5x Annual Board Cash Retainer (excluding any amount related to | |
Chief Executive Officer | 5x Annual Base Salary | |
All Other Executive Officers and Covered Individuals | 3x Annual Base Salary |
The shares to be taken into account in determining whether the Covered Individual has satisfied the ownership goal includes fully-vested outstanding Class A and PledgingClass B shares (for purposes of this paragraph, “Shares”) of which the covered individual is deemed to be the beneficial owner. The following Shares count toward satisfaction of the ownership goal: (i) unvested time-based restricted Shares and Shares subject to unvested or vested (but unsettled) time-based restricted stock unit awards; (ii) Shares to be issued upon the settlement of vested, but not yet settled, performance-based awards (including performance-based restricted stock unit awards, or PSUs), in each case, based on the actual attainment of performance conditions pursuant to the terms of such performance-based awards; and (iii) Shares underlying vested stock options or vested stock-settled stock appreciation rights, in each case, that are “in-the-money.” However, the following shares will not count toward satisfaction of the ownership goal: (i) Shares to be issued upon the settlement of performance-based awards (including PSUs) that are unvested or for which the performance conditions have not been satisfied pursuant to the terms of performance-based awards; (ii) Shares underlying unvested or out-of-the-money stock options or stock appreciation rights; (iii) Shares subject to equity-based awards that may only be settled in cash; and (iv) Shares subject to pledges or security interests. Our Stock Ownership Guidelines are available on our website at ir.baldwinriskpartners.com. To access, go to our website, click on “Governance” and then click on “Governance Overview.”
Clawback Policy
Accountability is a fundamental value of BRP Group. To reinforce this value through our executive compensation program, our current and former executive officers and certain other senior executives are subject to our Clawback Policy, which requires the recoupment of certain executive compensation in the event that the Company is required to prepare an accounting restatement due to the Company’s noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The Company’s Clawback Policy is compliant with Nasdaq Listing Standard 5608. Our Clawback Policy is available on our website at ir.baldwinriskpartners.com. To access, go to our website, click on “Governance” and then click on “Governance Overview.”
Hedging Policy
EmployeesColleagues and directors are prohibited from engaging in any hedging transactions (including transactions involving options, puts, calls, prepaid variable forward contracts, equity swaps, collars and exchange funds or other derivatives) that are designed to hedge or speculate on any change in the market value of the Company’s equity securities.
Indemnification of Officers and Directors
Our certificateCertificate of incorporationIncorporation provides that we will indemnify our directors and officers to the fullest extent permitted by the General Corporation Law of the State of Delaware (“DGCL”). We have established directors’ and officers’ liability insurance that insures such persons against the costs of defense, settlement or payment of a judgment under certain circumstances.
Our certificateCertificate of incorporationIncorporation provides that our directors will not be liable for monetary damages for breach of fiduciary duty, except for liability relating to any breach of the director’s duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, violations under Section 174 of the DGCL or any transaction from which the director derived an improper personal benefit.
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We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by the DGCL, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.
Transactions with Related Persons
Transactions with Related Persons |
We describe below certain transactions or series of transactions, since the beginning of our last fiscal year or currently proposed, to which we were or will be a participant and in which:
the amount or amounts involved exceed or will exceed $120,000; and
• | the amount or amounts involved exceed or will exceed $120,000; and |
any of our directors, director nominees, or executive officers (in each case, including their immediate family members) or beneficial holders of more than 5% of any class of our voting securities had or will have a direct or indirect material interest.
• | any of our directors, director nominees or executive officers (in each case, including their immediate family members) or beneficial holders of more than 5% of any class of our voting securities (including their immediate family members as relevant) had or will have a direct or indirect material interest. |
Other than as described below, there have not been, nor are there any currently proposed, transactions or series of similar transactions meeting thisthese criteria to which we have been or will be a participant other than compensation arrangements, which are described where required under “Executive OfficersOfficers” and Compensation.“Compensation Discussion and Analysis.”
Third Amended and Restated Limited Liability Company Agreement of Baldwin Risk Partners, LLC
On October 7, 2019, BRP Group, Baldwin Risk Partners,BRP and the Pre-IPO LLC (“BRP”) and certain historical members (the “Pre-IPO LLC Members”) of BRPMembers entered into the Third Amended and Restated Limited Liability Company Agreement of BRPBaldwin Risk Partners (the “Amended LLC Agreement”). We operate our business through BRP in accordance with the terms of the Amended LLC Agreement. Pursuant to the terms of the Amended LLC Agreement, so long as each of the owners of BRP’s outstanding equity interests (“BRP’s LLC Members”) continue to own any membership interests of BRP (“LLC Units”) or securities redeemable or exchangeable into shares of our Class A common stock, we will not, without the prior written consent of such holders, engage in any business activity other than the management and ownership of BRP or own any assets other than securities of BRP and/or any cash or other property or assets distributed by or otherwise received from BRP, unless we determine in good faith that such actions or ownership are in the best interest of BRP.
As the sole managing member of BRP, we have control over all of the affairs and decision making of BRP. As such, through our officers and directors, we are responsible for all operational and administrative decisions of BRP and the day-to-day management of BRP’s business. We will fund any dividends to our shareholders by causing BRP to make distributions to BRP’s LLC Members and us, subject to the limitations imposed by our debt agreements.
The holders of LLC Units will generally incur U.S. federal, state and local income taxes on their proportionate share of any net taxable income of BRP. Net profits and net losses of BRP will generally be allocated to its members pro rata in accordance with the percentages of their respective ownership of LLC Units, though certain non-pro rata adjustments will be made to reflect tax depreciation, amortization and other allocations. The Amended LLC Agreement provides for pro rata cash distributions to the holders of LLC Units for purposes of funding their tax obligations in respect ofto the taxable income of BRP that is allocated to them. Generally, these tax distributions will be computed based on BRP’s estimate of the net taxable income of BRP allocable to each holder of LLC Units multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporatecorporation that is a resident in the State of Florida (taking into account the non-deductibility of certain expenses and the character of our income).
Except as otherwise determined by us, if at any time we issue a share of our Class A common stock, the net proceeds received by us with respect to such share, if any, shall be concurrently invested in BRP and BRP shall issue to us one LLC Unit (unless such share was issued by us solely to fund the purchase of an LLC Unit from a holder of LLC Units (upon an election by us to exchange such LLC Unit in lieu of redemption following a redemption request by such holder of LLC Units in
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which case such net proceeds shall instead be transferred to the selling holder of LLC Units as consideration for such purchase, and BRP will not issue an additional LLC Unit to us)). Similarly, except as otherwise determined by us, (i) BRP will not issue any additional LLC Units to us unless we issue or sell an equal number of shares of our Class A common stock and (ii) should BRP issue any additional LLC Units to BRP’s LLC Members or any other person, we will issue an equal number of shares of our
Class B common stock to such BRP LLC Members or any other person. Conversely, if at any time any shares of our Class A common stock are redeemed, purchased or otherwise acquired, BRP will redeem, purchase or otherwise acquire an equal number of LLC Units held by us, upon the same terms and for the same price per security, as the shares of our Class A common stock are redeemed, purchased or otherwise acquired. In addition, BRP will not effect any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the LLC Units unless it is accompanied by substantively identical subdivision or combination, as applicable, of each class of our common stock, and we will not effect any subdivision or combination of any class of our common stock unless it is accompanied by a substantively identical subdivision or combination, as applicable, of the LLC Units.
Under the Amended LLC Agreement, the holders of LLC Units (other than us) have the right to require BRP to redeem all or a portion of their LLC Units for, at our election, newly-issued shares of Class A common stock on a one-for-one basis or a cash payment equal to the volume weighted average market price of one share of our Class A common stock for each LLC Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications). If we decide to make a cash payment, the holder of an LLC Unit has the option to rescind its redemption request within a specified time period. Upon the exercise of the redemption right, the redeeming member will surrender its LLC Units to BRP for cancellation. The Amended LLC Agreement requires that we contribute cash or shares of our Class A common stock to BRP in exchange for an amount of newly-issued LLC Units in BRP that will be issued to us equal to the number of LLC Units redeemed from the holders of LLC Units. BRP will then distribute the cash or shares of our Class A common stock to such holder of an LLC Unit to complete the redemption. In the event of a redemption request by a holder of an LLC Unit, we may, at our option, effect a direct exchange of cash or Class A common stock for LLC Units in lieu of such a redemption. Whether by redemption or exchange, we are obligated to ensure that at all times the number of LLC Units that we or our wholly owned subsidiaries own equals the number of shares of Class A common stock issued by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities). Shares of Class B common stock will be cancelled on a one-for-one basis if we, following a redemption request of a holder of an LLC Unit, redeem or exchange LLC Units of such holder of an LLC Unit pursuant to the terms of the Amended LLC Agreement.
The Amended LLC Agreement provides that, in the event that a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization or similar transaction with respect to our Class A common stock is proposed by us or our shareholders and approved by our boardBoard of directorsDirectors or is otherwise consented to or approved by our boardBoard of directors,Directors, the holders of LLC Units will be permitted to participate in such offer by delivery of a notice of redemption or exchange that is effective immediately prior to the consummation of such offer. In the case of any such offer proposed by us, we are obligated to use our reasonable best efforts to enable and permit the holders of LLC Units to participate in such offer to the same extent or on an economically equivalent basis as the holders of shares of our Class A common stock without discrimination. In addition, we are obligated to use our reasonable best efforts to ensure that the holders of LLC Units may participate in each such offer without being required to redeem or exchange LLC Units.
Subject to certain exceptions, BRP will indemnify all of its members and their officers and other related persons, against all losses or expenses arising from claims or other legal proceedings in which such person (in its capacity as such) may be involved or become subject to in connection with BRP’s business or affairs or the Amended LLC Agreement or any related document.
BRP may be dissolved upon (i) the determination by us to dissolve BRP or (ii) any other event which would cause the dissolution of BRP under the Delaware Limited Liability Company Act, unless BRP is continued in accordance with the Delaware Limited Liability Company Act. Upon dissolution, BRP will be liquidated and the proceeds from any liquidation will be applied and distributed in the following manner: (a) first, to creditors (including creditors who are members or affiliates of members) in satisfaction of all of BRP’s liabilities (whether by payment or by making reasonable provision for payment of such liabilities, including the setting up of any reasonably necessary reserves) and (b) second, to the members in proportion to their vested LLC Units.
On October 28, 2019, we entered into the Tax Receivable Agreement with BRP’s LLC Members that provides for the payment by us to BRP’s LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in BRP’s assets resulting from (a) previous acquisitions by BRP Group of LLC Units from BRP’s LLC Members, in connection with our initial public offering, (b) the acquisition of LLC Units from BRP’s LLC Members using the net proceeds from any future offering, (c) redemptions or exchanges by BRP’s LLC Members of LLC Units and the corresponding number of shares of Class B common stock for shares of our Class A common stock or cash or (d) payments under the Tax Receivable Agreement, and (ii) tax benefits related to imputed interest resulting from payments made under the Tax Receivable Agreement.
This payment obligation is an obligation of BRP Group and not of BRP. For purposes of the Tax Receivable Agreement, the cash tax savings in income tax will be computed by comparing the actual income tax liability of BRP Group (calculated with certain assumptions) to the amount of such taxes that BRP Group would have been required to pay had there been no increase to the tax basis of the assets of BRP as a result of the redemptions or exchanges and had BRP Group not entered into the Tax Receivable Agreement. Estimating the amount of payments that may be made under the Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. While the actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of redemptions or exchanges, the price of shares of our Class A common stock at the time of the redemption or exchange, the extent to which such redemptions or exchanges are taxable, and the amount and timing of our income, we anticipate that we willthe tax rates then applicable and the portion of our payments under the Tax Receivable Agreement constituting imputed interest. We account for the effects of these increases in tax basis and associated payments under the Tax Receivable Agreement arising from future redemptions or exchanges as follows:
record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates on the date of the redemption or exchange;
• | we record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the redemption or exchange; |
reduce the deferred tax asset with a valuation allowance to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset; and
• | to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, we reduce the deferred tax asset with a valuation allowance; and |
record 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the Tax Receivable Agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additional paid-in capital.
• | we record 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the Tax Receivable Agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additional paid-in capital. |
Payments under the Tax Receivable Agreement are not conditioned on BRP’s LLC Members’ continued ownership of us. There may be a material negative effect on our liquidity if, as described below, the payments under the Tax Receivable Agreement exceed the actual benefits we receive in respect of the tax attributes subject to the Tax Receivable Agreement and/or distributions to us by BRP are not sufficient to permit us to make payments under the Tax Receivable Agreement.
In addition, although we are not aware of any issue that would cause the IRS to challenge the tax basis increases or other benefits arising under the Tax Receivable Agreement, BRP’s LLC Members will not reimburse us for any payments previously made if such tax basis increases or other tax benefits are subsequently disallowed, except that any excess payments made to BRP’s LLC Members will be netted against future payments otherwise to be made under the Tax Receivable Agreement, if any, after our determination of such excess. As a result, in such circumstances we could make payments to BRP’s LLC Members under the Tax Receivable Agreement that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity.
In addition, the Tax Receivable Agreement provides that, upon certain mergers, asset sales or other forms of business combination or certain other changes of control, our or our successor’s obligations with respect to tax benefits would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the benefits arising from the increased tax deductions and tax basis and other benefits covered by the Tax Receivable Agreement. As a result, upon a change of control, we could be required to make payments under the Tax Receivable Agreement that are greater than or less than the specified percentage of our actual cash tax savings, which could negatively impact our liquidity.
This provision of the Tax Receivable Agreement may result in situations where BRP’s LLC Members have interests that differ from or are in addition to those of our other shareholders. In addition, we could be required to make payments under the Tax Receivable Agreement that are substantial and in excess of our, or a potential acquirer’s, actual cash savings in income tax.
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Finally, because we are a holding company with no operations of our own, our ability to make payments under the Tax Receivable Agreement is dependent on the ability of BRP to make distributions to us. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid.
Our obligations under the Tax Receivable Agreement will also apply with respect to any person who is issued LLC Units in the future and who becomes a party to the Tax Receivable Agreement.
On October 28, 2019, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Pre-IPO LLC Members.
At any time, beginning on April 25, 2020 (i.e., 180 days following the closing of our initial public offering), subject to several exceptions, including underwriter cutbacks and our right to defer a demand registration under certain circumstances, the Pre-IPO LLC Members may require that we register for public resale under the Securities Act of 1933, as amended (the “Securities Act”), all shares of Class A common stock constituting registrable securities that they request be registered at any time following our initial public offering so long as the securities requested to be registered in each registration statement have an aggregate estimated market value of at least $25 million. In addition, the Pre-IPO LLC Members have the right to require us to register the sale of the registrable securities held by them on Form S-3 under the Securities Act, subject to offering size and other restrictions. If we propose to register any of our securities under the Securities Act for our own account or the account of any other holder (excluding any registration related to an employee benefit plan or a corporate reorganization or other Rule 145 transaction), the Pre-IPO LLC Members are entitled to notice of such registration and to request that we include registrable securities for resale on such registration statement, and we are required, subject to certain exceptions, to include such registrable securities in such registration statement.
We have undertaken in the Registration Rights Agreement to use our reasonable best efforts to maintain a shelf registration statement on Form S-3 to permit the resale of the shares of Class A common stock held by the Pre-IPO LLC Members.
In connection with the transfer of their registrable securities, the parties to the Registration Rights Agreement may assign certain of their respective rights under the Registration Rights Agreement under certain circumstances. In connection with the registrations described above, we will indemnify any selling shareholders and we will bear all fees, costs and expenses (except underwriting discounts and spreads).
On October 28, 2019, we entered into the Stockholders Agreement with each of the Pre-IPO LLC Members, pursuant to which, provides that, for so long as the Substantial Ownership Requirement is met, the Holders have approval rights over certain transactions and actions taken by us and BRP, including, a merger, consolidation or sale of all or substantially all of the Pre-IPO LLC Members will be requiredassets of BRP and its subsidiaries; any dissolution, liquidation or reorganization (including filing for certain corporate actions. These actions include: (1) a changebankruptcy) of control; (2) acquisitionsBRP and its subsidiaries or dispositionsany acquisition or disposition of assetsany asset for consideration in an amount exceedingexcess of 5% of our and our subsidiaries’ total assets; (3) the issuance of securities of BRP Group or any of its subsidiaries (other than under equity incentive plans that have received the prior approval of our board of directors) in an amount exceeding $10 million; (4) amendments to our certificate of incorporation or by-laws or to the certificate of formation or operating agreement of BRP; (5)assets on a consolidated basis; the incurrence, guarantee, assumption or refinancing of indebtedness, or grant of a security interest, in excess of 10% of total assets; (6)assets (or that would cause aggregate indebtedness or guarantees thereof to exceed 10% of total assets); the issuance of certain additional equity interests of the Company, BRP or any of their subsidiaries in an amount exceeding $10 million (other than pursuant to an equity incentive plan that has been approved by our Board of Directors); the establishment or amendment of any equity, purchase or bonus plan for the benefit of employees, consultants, officers or directors; any capital or other expenditure in excess of 5% of total assets; and (7) any changethe declaration or payment of dividends on Class A common stock or distributions by BRP on LLC Units other than tax distributions as defined in the sizeAmended LLC Agreement; changing the number of the boarddirectors on our Board of directors. The Stockholders Agreement also provides that, until the Substantial Ownership Requirement is no longer met, the approvalDirectors; hiring, termination or replacement of, the Pre-IPO LLC Members will be required for the hiringestablishment of compensation (including benefits) payable to, or making other significant decisions involving, our or BRP’s senior management and termination ofkey employees, including our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Partnership Officerincluding entry into or modification of employment agreements, adopting or modifying plans relating to any other
changeincentive securities or employee benefit plans or granting incentive securities or benefits under any existing plans; changing our or BRP’s jurisdiction of incorporation; changing the location of our or BRP’s headquarters; changing our or BRP’s name; changing our or BRP’s fiscal year; changing our public accounting firm; amendments to senior managementour or key employees (including terms of compensation).BRP’s governing documents; and adopting a shareholder rights plan. Furthermore, the Stockholders Agreement provides that, untilfor so long as the Substantial Ownership Requirement is no longer met, the Pre-IPOHolders may designate the nominees for a majority of the members of our Board of Directors, including the Board Chair.
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Notwithstanding the rights afforded to the Holders under the Stockholders Agreement, Baldwin Insurance Group Holdings, LLC Members holding(“BIGH”), an entity controlled by Lowry Baldwin, our Board Chair and the Holder of a majority of the shares of our Class B common stock held by the Pre-IPO LLC Members may designate the majorityall of the nominees for electionHolders (the “Majority Holder”), and the Company have entered into a consent and defense agreement (the “Consent Agreement”) pursuant to our boardwhich the Majority Holder has irrevocably consented to and approved, on behalf of directors, includingitself and the other Holders, certain transactions and actions taken by the Company and BRP (each, a “Specified Matter”) that the Independent Committee (as defined below) determines in good faith is in the best interests of the Company and its stockholders in their capacity as such, in satisfaction of the approval rights with respect to such Specific Matter. Further, the Majority Holder irrevocably agreed, on behalf of itself and the other Holders, not to designate any nominee for election to serve asservice on our Board if the Independent Committee determines in good faith that action by the Board Chair.in furtherance of the nomination of such person to the Board would not be in the best interests of our Company and our stockholders in their capacity as such.
In connection with the Consent Agreement, our Board, with the consent of the Majority Holder under the Stockholders Agreement, has amended our By-Laws to, among other things:
• | create a committee of the Board, composed of all directors then in office who the Board determines both (i) qualify as an independent director under the corporate governance standards of Nasdaq and (ii) have no relationship with the Company or any Holder that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director (such committee, the “Independent Committee”); and |
• | empower the Independent Committee, acting unanimously, to make any and all determinations contemplated or required by the Consent Agreement. |
Indemnification Agreements
We entered into an indemnification agreement with each of our executive officers and directors that provides, in general, that we will indemnify them to the fullest extent permitted by law in connection with their service to us or on our behalf.
Trey Baldwin and John Baldwin, brothers of Lowry Baldwin, our Board Chair, received $204,000$0.3 million and $468,000,$0.4 million, respectively, from the Company in risk advisor commissions since the beginning of the fiscal year ended December 31, 2020.2023.
Other Related Person Transactions
Commissions Revenue
The Company serves as a broker for the Holding Company of the Villages, Inc. (“The Villages”) and certain affiliated entities. Affiliates of The Villages are the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock. Since the beginning of the fiscal year ended December 31, 2020,2023, commissions revenue recorded as a result of transactions with The Villages and its affiliated entities was approximately $1.6$2.8 million.
The Company serves as a broker for an entity in which Chris Sullivan, a member of our boardBoard of directors,Directors, owns approximately 35%. Since the beginning of the fiscal year ended December 31, 2020,2023, commissions revenue recorded as a result of transactions with such entity was approximately $193,000.$0.2 million.
Rent ExpensesExpense
The Company is a party to various agreements to lease office space from wholly-owned subsidiaries of The Villages. Rent expense ranges from approximately $3,000 to $28,000$12,000 per month, per lease. Lease agreements expire on various dates through 2025.December 2027. Since the beginning of fiscal year ended December 31, 2020,2023, total rent expense incurred with respect to The Villages and its wholly-owned subsidiaries was $671,000.$0.5 million.
Ownership Interest Redemption
On each of June 24, 2020 and December 8, 2020, BRP Group consummated an underwritten offering of shares of its Class A common stock. A portion of the net proceeds from each sale was used to purchase then-newly issued LLC Units from BRP, and to purchase LLC Units from certain co-founders and executive officers of the Company. We purchased 1,875,000, 450,000 and 150,000 LLC Units from Lowry Baldwin, Elizabeth Krystyn and Laura Sherman, respectively, for proceeds of $23.7 million, $5.7 million and $1.9 million, respectively, in connection with the June 2020 offering. We purchased 566,667, 300,000, 400,000, 200,000 and 150,000 LLC Units from Lowry Baldwin, Elizabeth Krystyn, Laura Sherman, Kris Wiebeck, our Chief Strategy Officer, John Valentine, our Chief Partnership Officer, and/or their affiliated entities, respectively, for proceeds of $16.0 million, $8.5 million, $11.3 million, $5.6 million and $4.2 million respectively, in connection with the December 2020 offering.
Related Person Transactions Policies and Procedures
We adopted a writtenOur Related Person Transactions Policy (the “Policy”“RPT Policy”), which sets forth our policy with respect to the review, approval, ratification and disclosure of all related person transactions by our Audit Committee. In accordance with the RPT Policy, our Audit Committee has overall responsibility for implementation of and compliance with the RPT Policy. Our RPT Policy is available on our website at ir.baldwinriskpartners.com. To access, go to our website, click on “Governance” and then click on “Governance Overview.”
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For purposes of the RPT Policy, a “related person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which a related person has or will have a direct or indirect material interest, as determined by the Audit Committee. The RPT Policy contains certain enumerated exceptions to transactions that would otherwise fall within the definition of “related party transaction”,person transaction,” including, among others, where the transaction involves the purchase or sale of products or services in the ordinary course and the amount involved exceedsdoes not exceed the lesser of (i) $120,000 and (ii) one percent of the average of our total assets at year endyear-end for the last two completed fiscal years.
The RPT Policy requires that notice of a proposed related person transaction be provided to our legal department prior to entry into such transaction. If our legal department determines that such transaction is a potential related person transaction, the proposed transaction will be submitted to our Audit Committee for consideration at its next meeting. Under the RPT Policy, our Audit Committee may approve only those potential related person transactions that are in, or not inconsistent with, the Company’s best interests. In the event that we become aware of a related person transaction that has not been previously reviewed, approved or ratified under the RPT Policy and that is ongoing or is completed, the transaction will be submitted to the Audit Committee so that it may determine whether to ratify, rescind or terminate the related person transaction.
The RPT Policy also provides that the Audit Committee review certain previously approved or ratified related person transactions that are ongoing to determine whether the related person transaction remains in our best interests and the best interests of our shareholders. Additionally, we will make periodic inquiries of directors and executive officers with respect to any potential related person transaction of which they may be a party or of which they may be aware.
Executive Officers |
Executive Officers and CompensationOur Board of Directors has oversight over executive management succession, which they evaluate on a consistent basis. Our executive management team comprises the following individuals as of April 8, 2024.
Trevor Baldwin Chief Executive Officer | Trevor Baldwin, age 38, has served as Chief Executive Officer of the Company since May 2019 and has served as director since September 2019. As Chief Executive Officer, Mr. Baldwin is responsible for leading the Firm in all areas of strategy, operations and business development, finance and human resources. Mr. Baldwin joined what is today the middle market business in 2009 as a Commercial Risk Advisor working primarily with healthcare and private equity clients. Over time he led the Firm’s Commercial Risk Management Group as Managing Director, following which he served as Baldwin Risk Partners’ President & Chief Operating Officer. Before joining Baldwin Risk Partners, Mr. Baldwin worked at the private equity firm HealthEdge Investment Partners, LLC. Mr. Baldwin graduated from Florida State University with a Bachelor of Arts degree in Risk Management & Insurance. |
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Bradford Hale Chief Financial Officer | Bradford Hale, age 43, joined the Company as Chief Accounting Officer in May 2019 and was appointed Chief Financial Officer effective April 1, 2021. As Chief Financial Officer, Mr. Hale is responsible for leading the Firm’s treasury, finance, accounting and financial reporting functions. From September 2014 to May 2019, Mr. Hale served as Managing Director and shareholder at CBIZ MHM, LLC, where he led the Accounting Advisory Practice through projects focused on complex accounting and SEC matters. From June 2010 to September 2014, Mr. Hale was the Director of Accounting and Risk Management for Bloomin Brands, Inc., after starting his career at Deloitte where he focused on serving insurance clients. Mr. Hale has a Bachelor’s and Master’s degree in Accountancy from Wake Forest University. | |
Daniel Galbraith President, BRP and Chief Executive Officer, Retail Brokerage Operations | Daniel Galbraith, age 42, has served as President, BRP and Chief Executive Officer, Retail Brokerage Operations of the Company since January 2024. As President, BRP and Chief Executive Officer, Retail Brokerage Operations, Mr. Galbraith is responsible for our Insurance Advisory Solutions and Mainstreet Insurance Solutions operating groups’ day-to-day profit and loss, operational excellence, and acceleration of best practice sharing across the organization. Mr. Galbraith previously served as Chief Operating Officer of the Company from March 2019 through January 2024. Mr. Galbraith began his career at Cintas Corporation and, after 11 years in operations and sales leadership roles, achieved the position of Head of Sales in the Document Management division. In May 2014, Mr. Galbraith was appointed as Executive Vice President of Sales at Shred-It and in October 2015 was the Senior Vice President of sales for Stericycle. Mr. Galbraith graduated with a Bachelor of Arts from Cornell University, where he majored in Government with a minor in Economics. | |
Corbyn Lichon Chief Accounting Officer | Corbyn Lichon, age 32, joined the Company as Director of Accounting in May 2019 and was appointed as Chief Accounting Officer effective April 1, 2021. As Chief Accounting Officer, Ms. Lichon is responsible for the Firm’s accounting function and financial reporting. Ms. Lichon began her career in the Assurance practice at CBIZ & MHM Tampa Bay, where she planned and executed financial statement audits of privately-held and publicly-traded companies from September 2013 to May 2019. While at CBIZ, Ms. Lichon served as a technical leader, focusing specifically on transaction-related accounting, business combinations, and revenue recognition. Ms. Lichon graduated with honors from the University of South Florida with a bachelor’s degree in Accounting and is licensed as a Certified Public Accountant. |
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Jim Roche President, BRP and Chief Executive Officer, Underwriting, Capacity & Technology Operations | Jim Roche, age 47, has served as President, BRP and CEO, Underwriting, Capacity, and Technology Operations since his promotion to an executive officer role in January 2024. As President, BRP and CEO, Underwriting, Capacity, and Technology Operations, Mr. Roche is responsible for the Underwriting, Capacity, and Technology Solutions operating group’s day-to-day profit and loss, operational excellence, and acceleration of best practice sharing across the organization. Mr. Roche previously served as our Chief Insurance Innovation Officer from October 2021 through January 2024. In addition, Mr. Roche served as the Managing Partner and President of Millennial Specialty Insurance, LLC, which partnered with the Company in April 2019. Mr. Roche has nearly 20 years of insurance experience across strategy, marketing, product development, and IT, with significant expertise in technology solutions and new product incubation. Mr. Roche was at QBE Insurance from June 2011 to January 2015, serving as Vice President of Strategy, Initiatives and Analytics. Prior to joining QBE Insurance, Mr. Roche worked at Bank of America, most recently as Senior Vice President of Product Management, and at Progressive Insurance as a product manager. Mr. Roche has a bachelor’s degree in Computer Science and Electrical Engineering with a minor in Mathematics from Vanderbilt University and an MBA from the University of Virginia. | |
Seth Cohen General Counsel and Corporate Secretary | Seth Cohen, age 46, joined the Company in February 2020 and was appointed to General Counsel and Corporate Secretary effective January 2022. As General Counsel and Corporate Secretary, Mr. Cohen is responsible for leading the Firm’s legal, compliance, and regulatory function. Prior to his appointment to General Counsel and Corporate Secretary, Mr. Cohen served as the Company’s Deputy General Counsel, Legal Operations & Strategic Initiatives. Mr. Cohen brings more than 20 years of experience working across multiple industries. Prior to joining BRP, Mr. Cohen served as Senior Vice President, Legal - Strategic Initiatives at Savills North America. Prior to that, Mr. Cohen served in a number of leadership positions within the legal department at Cisco Systems, Inc., after having spent time at Sonnenschein Nath & Rosenthal (now Dentons) and leading his own law firm. Mr. Cohen received a BA in criminology and criminal justice from the University of Florida and a JD from The George Washington University School of Law. |
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Compensation Discussion and Analysis |
We are driven by the core values in our Azimuth—core values which define who we are and what we stand for. Those core values guide our thoughts and actions, enabling us to lead with integrity. Our leadership results in innovative products and solutions for our Clients, opportunities for our Colleagues, collaborative trading with our Insurance Company Partners, strength in our communities and the delivery of strong financial results to our shareholders. We believe that the 2023 compensation of our named executive officers (our “NEOs”) appropriately reflects and rewards their significant contributions as our business emerged from what was, in many respects, a challenging 2023 for BRP and its Stakeholders, a stronger, more fully integrated platform; well positioned to drive continued outsized organic growth, accelerating margin accretion and free cash flow. This Compensation Discussion and Analysis (this “CD&A”) explains the guiding principles and practices upon which our executive compensation program is based and the compensation paid to our NEOs for 2023.
Our NEOs for the year ended December 31, 2023 are:
Name | Title | |
Trevor Baldwin | Chief Executive Officer | |
Bradford Hale | Chief Financial Officer | |
Daniel Galbraith | President, BRP and Chief Executive Officer, Retail Brokerage Operations | |
John Valentine(1) | Former Chief Partnership Officer | |
Kris Wiebeck(2) | Former Chief Strategy Officer |
(1) | Mr. Valentine retired from his role as our Chief Partnership Officer effective December 31, 2023. |
(2) | Mr. Wiebeck retired from his role as our Chief Strategy Officer effective December 31, 2023. |
John Valentine, age 44, served as Chief Partnership Officer of the Company from August 2018 through his retirement in December 2023. As Chief Partnership Officer, Mr. Valentine was responsible for Partnership execution and due diligence activities in collaboration with our respective division and business function leadership teams. In addition, Mr. Valentine collaborated with our leadership team to drive successful integration of new Partners.
Kris Wiebeck, age 41, joined the Company as Chief Financial Officer in May 2015 and served in such role until April 2021, after which he served as Chief Strategy Officer through his retirement in December 2023. As Chief Strategy Officer, Mr. Wiebeck focused on strategic initiatives across the organization. Mr. Wiebeck also served as a member of our Board of Directors from January 2022 through December 2023. Mr. Wiebeck did not receive compensation for his service as a member of our Board of Directors.
2023 Performance Highlights
BRP emerged from a challenging 2023 as a stronger, more fully integrated platform; well positioned to drive continued outsized organic growth, accelerating margin accretion and free cash flow. Our key accomplishments and highlights from 2023 include:
• | Continued industry-leading organic revenue growth of 19%(1). |
• | Grew Adjusted EBITDA by 27%(1) and expanded Adjusted EBITDA Margin by approximately 50 basis points. |
• | Reported cash flow from operating activities of $44.6 million. |
• | Grew Free Cash Flow by 6%(1) in the face of a 68%, or $42.7 million, increase in cash paid for interest due to rising interest rates. |
• | Reduced net leverage from approximately 5.4x to 4.8x via growth in Adjusted EBITDA and modest debt paydown. |
• | Our Insurance Advisory Solutions (“IAS”) segment had organic growth of 12%, despite headwinds emerging from a slowdown in project-related insurance programs, transaction-based insurance solutions, and the impact of broad-based rate softening in conjunction with an anemic IPO market impacting our D&O practice. |
(1) | Organic revenue growth, adjusted EBITDA, adjusted EBITDA margin and free cash flow are non-GAAP measures. Refer to the Appendix to this Proxy Statement for reconciliations of non-GAAP financial measures to comparable GAAP financial measures. |
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• | Sales velocity of 17% in our IAS business continues to reflect the strength of our new business generation realized through the outsized rate at which new clients continue to choose BRP for advice and brokerage services over our competitors. |
• | Our Underwriting, Capacity and Technology Solutions (“UCTS”) segment grew revenue organically 31%, due to continued strength in our multi-family platform and significant contributions from our homeowners and commercial umbrella products. |
• | Our Mainstreet Insurance Solutions (“MIS”) segment grew revenue organically 23%, thanks to continued strength from Westwood and a growing contribution from our new national mortgage and real estate operation launched in 2022. |
• | Costs across the business have been reevaluated and reduced if not client-facing or critical to our strategic objectives. The use of every dollar we retain continues to be heavily scrutinized against our strategic plan. The decisions we made were essential to meet our financial and operating commitments and have positioned us to be a better, more effective and efficient business going forward. As a result of these efforts, we successfully took out more than $5 million in-year costs and more than $10 million of run-rate costs from the business. |
• | Ended the year having completed the technology integrations of all but one IAS partner (which is on track to be completed in Q3 2024), resulting in approximately 95% of our IAS business operating on one common agency management system and IT stack. |
• | Won numerous accolades highlighting our status as a destination employer: Named by Fortune & Great Place to Work as a “Best Workplaces in Financial Services and Insurance™ for 2023 and re-certified through 2024; and recognized by Top Workplaces USA as a nationally recognized employer. |
Cumulative Total Shareholder Return
The following graph compares the cumulative total shareholder return for an investment in our Class A common stock from December 31, 2019 through December 31, 2023 to the cumulative total return of the Russell 3000 Index (“Russell 3000”) and the Standard & Poor’s Composite 1500 Insurance Brokers Index (“S&P 1500”). The graph assumes that $100 was invested on December 31, 2019 and the reinvestment of dividends, if any. The share price performance presented below is not necessarily indicative of future results.
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Executive Compensation Policies and Practices
The following highlights some of our key policies and practices as it relates to our executive compensation program.
What We Do | ||||||
Pay-for-Performance Philosophy. A large portion of our NEOs’ target total direct compensation is directly linked to the Company’s performance. | ||||||
Compensation “At Risk.” Our executive compensation program is designed such that a substantial portion of executive compensation is “at risk,” which we believe aligns the interests of our executives and our shareholders. | ||||||
Stock Ownership Guidelines. We have robust stock ownership guidelines that apply to our directors, officers, and executive leadership team. | ||||||
Compensation Clawback Policy. We have a clawback policy that applies to our officers and executive leadership team. | ||||||
Multi-Year Vesting Requirements under our LTIP. Under the long-term incentive award plan approved by our Compensation Committee relating to the 2023 executive compensation program, all equity-based incentive awards granted to our NEOs have multi-year vesting conditions. Performance share units (PSUs) granted to our NEOs in 2023 cliff-vest after three years, and no portion of the PSUs vest unless the relevant performance metrics are achieved, consistent with current market practice and our retention objectives. | ||||||
Independent Compensation Consultant.Our Compensation Committee engaged an independent compensation consultant to assist with the design of the 2023 executive compensation programs. | ||||||
Annual Executive Compensation Review. Our Compensation Committee conducts an annual review of compensation for our NEOs and a review of compensation-related risks. | ||||||
At Will Employment.We employ our NEOs at will. |
What We Don’t Do | ||||||
No Hedging or Derivatives. We prohibit directors and NEOs from engaging in hedging transactions involving the Company’s equity securities. | ||||||
No Guaranteed Base Salary Increases or Incentive Payments. We do not guarantee base salary increases or incentive payments for any of our NEOs. | ||||||
No Single Trigger Vesting.We do not provide for single trigger vesting of equity-based awards upon a change in control for any of our NEOs. | ||||||
No Excessive Perquisites. We do not provide material perquisites or other personal benefits to our NEOs. | ||||||
No “Golden Parachute” Tax Reimbursements. We do not provide any tax reimbursement payments (including “gross-ups”) on any tax liability that our NEOs might owe as a result of the application of Sections 280G and 4999 of the Internal Revenue Code. |
Our Guiding Principle
We pay for performance. We have crafted a compensation program that we believe aligns our shareholders’ long-term interests with NEO compensation. To create this “pay-for-performance” environment, compensation is weighted heavily toward “at-risk” components. We set low base salaries, which are significantly below the 25th percentile for all our NEOs compared to our compensation peer group, and tie a large portion of our NEOs’ total compensation (even in relation to our compensation
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peer group) to Company performance and long-term growth. In addition, our annual incentive program includes aggressive targets and challenging individual performance goals that reward our NEOs for short-term performance, and our long-term equity incentive program provides for extended vesting schedules and performance targets that create an “ownership culture” aligning NEO and shareholder interests. We believe that using our bespoke mix of fixed and variable elements that prioritize pay-for-performance enables us to reward performance, encourage prudent decision-making, retain top talent, and create a balanced focus on short-term and long-term performance.
How Compensation Decisions are Made
Role of the Compensation Committee
Our Compensation Committee, consisting entirely of independent directors, is responsible for making determinations concerning the components of our executive compensation program, the design of executive compensation packages offered to our NEOs, and the review of NEO performance. The Compensation Committee reviews data from our compensation peer group companies, who are described below under “Role of Peer Companies,” and retains an independent compensation consultant to assess our competitive position with respect to total executive compensation. The Compensation Committee also administers the BRP Group, Inc. Omnibus Incentive Plan (the “Omnibus Plan”) and the BRP Group, Inc. Partnership Inducement Award Plan (the “Inducement Plan”).
The Compensation Committee takes various factors into account in setting compensation levels and generally seeks to align total Target compensation (i.e., the sum of base salary, Target annual incentives and Target long-term incentives) for our NEOs competitively relative to our compensation peer group companies for similar executive positions, with a substantial portion of total compensation being at risk based on performance. Our Annual Incentive Plan and LTIP are based on measurable and objective pre-established performance metrics, and the level to which those performance metrics are met will determine whether NEO compensation falls below or exceeds Target levels. See “Overview of 2023 Compensation Framework” and “Compensation Details for Fiscal Year 2023” for more information on performance levels and metrics.
Role of the Compensation Consultant
The Compensation Committee selects and retains the services of its own independent compensation consultant and annually reviews the performance of such consultant. The Compensation Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”) to serve as its independent compensation consultant. During 2023, FW Cook provided no services to the Company other than services for the Compensation Committee, and worked with the Company’s management, as directed by the Compensation Committee, only on matters for which the Compensation Committee is responsible. The Compensation Committee considers the independence of the compensation consultant in accordance with SEC and Nasdaq rules, and affirmatively determined that FW Cook qualifies as independent under the applicable rules.
Role of the Chief Executive Officer
At the Compensation Committee’s request, Trevor Baldwin, our Chief Executive Officer, provides input regarding the performance and compensation of the other NEOs. The Compensation Committee considers Mr. Baldwin’s evaluation and his direct knowledge of each other NEO’s performance and contributions when making compensation decisions. Mr. Baldwin is not present during Compensation Committee voting or deliberations regarding his own compensation.
Role of Our Shareholders
The Compensation Committee will consider the results of the advisory vote of our shareholders on the compensation of our NEOs. We held our last say-on-pay vote at the 2023 Annual Meeting of Shareholders. At that meeting, approximately 95% of the votes cast were in favor of our executive compensation framework.
Role of Peer Companies and Comparative Market Assessments
The Compensation Committee reviews and approves compensation peer group composition each year. With the assistance of FW Cook, the Compensation Committee identified groups of companies to serve as market reference points for compensation comparison purposes for 2023. The Compensation Committee does not target compensation decisions or levels to a specific percentile or other absolute measures related to comparison group data, but does periodically review comparative market assessments of the pay practices of other companies with the goal of seeing that the Company’s executive compensation
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program remains competitive. During the 2023 compensation review cycle, the Compensation Committee, in consultation with management and with advice of FW Cook, developed a compensation peer group comprised of companies that are either direct competitors of the Company or in the same or similar industry as the Company. The Compensation Committee reviews our compensation peer group annually and may adjust its composition, taking into account changes in both our business and the businesses of the companies in the compensation peer group.
Overview of 2023 Compensation Framework
Our 2023 executive compensation program is designed to motivate and reward exceptional performance while seeking to align the interests of our NEOs with those of our shareholders. The primary individual components of our executive compensation program are (i) annual base salary, (ii) annual incentives and (iii) long-term equity incentives.
Annual Base Salary
Annual base salary is an element of fixed annual compensation that is intended to attract, retain and motivate talented executive officers. Consistent with our pay-for-performance executive compensation strategy, salaries for all five of our NEOs fell significantly below the median 2022 base salaries for NEOs in our compensation peer group. Base salaries for our NEOs did not increase in 2023 from 2022. Refer to “2023 Comparative Market Assessment”—“Results of the February 2023 Comparative Market Assessment” and “Compensation Details for Fiscal Year 2023”—“Base Salary” for more details on the NEOs’ base salaries.
Annual Incentive Plan
Our 2023 annual incentive plan (our “Annual Incentive Plan”) is a variable component of our compensation program that is designed to focus our NEOs on achieving superior performance over the short term against business objectives and financial results for the Company as a whole, while also rewarding them for the achievement of individual performance objectives. The Annual Incentive Plan provides payout opportunities in the form of cash and fully vested shares of Class A common stock (with the pay mix for a given year determined by our Compensation Committee) upon the achievement of certain pre-established performance metrics, including organic revenue growth, adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), and personal objectives. The payout opportunity for each NEO ranges from 50% of Target annual incentive opportunity at Threshold performance to 300% at Superior performance, with a Target annual incentive opportunity of 100%. The payout for performance below Threshold of any performance metric is 0% with respect to such performance metric. By conditioning a large portion of our NEOs’ potential Annual Incentive Plan compensation on the Company’s achievement of clearly-defined metrics, we believe that we reinforce our strong pay-for-performance culture. Refer to “Compensation Details for Fiscal Year 2023”—“Annual Incentive Plan” for more details on our Annual Incentive Plan.
Long-Term Incentive Plan
Our 2023 long-term equity incentive plan (our “LTIP”) is a variable component of our compensation program that is designed to drive superior recurring performance over the long term and align the interests of our NEOs with those of our shareholders. We believe that long-term equity compensation is an effective way to provide a meaningful reward for appreciation in our stock price and create an “ownership culture” that motivates our NEOs to remain employed with us long-term. Our 2023 LTIP for our NEOs has shifted to 100% performance-based equity awards to further BRP’s commitment to its pay-for-performance culture.
Performance-Based Restricted Stock Units (“PSUs”). The number of PSUs earned, if any, is determined based on the following performance goals (the “Performance Goals”), in each case as measured over the period from January 1, 2023 through December 31, 2025 (the “Performance Period”): (i) 30% based on our relative total shareholder return compared to the total shareholder return of our 2023 compensation peer group; (ii) 30% based on the our relative total shareholder return compared to the total shareholder return of the Russell 3000 Growth Index; and (iii) 40% based on our three-year organic revenue compound annual growth rate. We define total shareholder return (“TSR”) as the annual total shareholder return for the Performance Period. The number of PSUs that will be earned following the end of the Performance Period are between 0% and 350% of a NEO’s Target PSUs, with a Target of 100%, depending on the level of achievement with respect to the Performance Goals and subject to the NEO’s continued employment through March 15, 2026. If our absolute total shareholder return for the Performance Period is negative, the maximum level of performance achievable for the PSUs will be Target. Refer to “Compensation Details for Fiscal Year 2023”—“LTIP” for more details on our LTIP.
Retirement Compensation
On November 3, 2023, the Company entered into mutual agreements with John Valentine and Kris Wiebeck for each to retire from their respective positions as Chief Partnership Officer and Chief Strategy Officer effective as of December 31, 2023. In connection with the agreements, Messrs. Valentine and Wiebeck each received $2.56 million of severance compensation and
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$1.44 million representing early payment of the 2023 bonus otherwise payable under our 2023 Annual Incentive Plan in respect of 2023 performance. The Company agreed to permit the continued vesting of Restricted Stock Awards (“RSAs”) and PSUs previously granted under the LTIP, in each case, subject to all other conditions of the award agreements, with the exception only of Messrs. Valentine and Wiebeck’s continued employment following the retirement date. In addition, the Company agreed to pay a portion of the monthly premiums for health insurance coverage under the Consolidated Omnibus Reconciliation Act, 29 U.S.C. § 1161 et. seq., as amended (“COBRA”) for 12 months following the effective date of Messrs. Valentine and Wiebeck’s retirement.
2023 Comparative Market Assessment
In February 2023, FW Cook presented an analysis of our pay practices and executive compensation levels as compared to a group of our peers (the “February 2023 Comparative Market Assessment”), which the Compensation Committee considered, among other things, in connection with establishing the 2023 compensation framework for the NEOs as described below.
Peer Comparison Group
Our 2023 compensation peer group included 16 public companies, the majority of which are in either the insurance broker or property and casualty insurance services sectors. After consultation with FW Cook, the Compensation Committee approved the following compensation peer group for 2023 (the “Compensation Peer Group”):
Peer Company | Business Focus | |||
Arthur J. Gallagher & Co. | Insurance Brokers | |||
Brown & Brown, Inc. | Insurance Brokers | |||
CBIZ, Inc. | Research and Consulting Services | |||
Employers Holdings, Inc. | Property and Casualty Insurance | |||
Erie Indemnity Company | Property and Casualty Insurance | |||
Focus Financial Partners Inc. | Asset Management and Custody Banks | |||
Goosehead Insurance, Inc. | Insurance Brokers | |||
Hagerty, Inc. | Insurance Brokers | |||
Kinsale Capital Group, Inc. | Property and Casualty Insurance | |||
Palomar Holdings, Inc. | Property and Casualty Insurance | |||
Primerica, Inc. | Life and Health Insurance | |||
RLI Corp. | Property and Casualty Insurance | |||
Ryan Specialty Holdings, Inc. | Insurance Brokers | |||
Safety Insurance Group, Inc. | Property and Casualty Insurance | |||
Selective Insurance Group, Inc. | Property and Casualty Insurance | |||
Stewart Information Services Corp. | Property and Casualty Insurance |
Survey Comparison
As part of the February 2023 Comparative Market Assessment, the Compensation Committee also reviewed and considered data from certain third-party surveys as presented by FW Cook.
Results of the February 2023 Comparative Market Assessment
The Compensation Committee examined the total direct compensation opportunity (base salary, annual cash incentives and long-term incentives) for each named executive officer, as well as individual elements of compensation. Data from the February 2023 Comparative Market Assessment was used as a market reference for compensation decisions. The Compensation Committee does not target total compensation or any individual component thereof to a specific percentile of comparison group compensation.
The February 2023 Comparative Market Assessment showed the following with respect to base salary, target total annual cash compensation, which is equal to base salary plus target annual bonus (“TAC”), and target total direct compensation, which is TAC plus the target compensation under the LTIP (“TDC”):
• | Base Salary |
° | The proposed (and ultimately approved) 2023 base salary for Trevor Baldwin was 55% below the median 2022 base salary for CEOs in the Compensation Peer Group, and |
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° | the proposed (and ultimately approved) 2023 base salary for each of the other NEOs was 37-40% below the median 2022 base salaries for their respective peers in the Compensation Peer Group. |
• | TAC |
° | The proposed (and ultimately approved) 2023 TAC for Trevor Baldwin was 18% below the median 2022 TAC for CEOs in the Compensation Peer Group, and |
° | the proposed (and ultimately approved) 2023 TAC for each of the other NEOs was 0-4% below the median 2022 TAC for their respective peers in the Compensation Peer Group. |
• | TDC |
° | The proposed (and ultimately approved) 2023 TDC for Trevor Baldwin was 12% below the median 2022 TDC for CEOs in the Compensation Peer Group, and |
° | the proposed (and ultimately approved) 2023 TDC for each of the other NEOs was 2-8% above the median 2022 TDC for their respective peers in the Compensation Peer Group. |
Pay Mix
The core principle of our executive compensation program continues to be that executive compensation should directly reflect our organization’s performance, as we continue towards our goal of being a leading independent insurance distribution firm. That core principle dictates that performance-based pay elements, which constitute the bulk of our NEOs’ total direct compensation, will not be earned or paid unless our shareholders also benefit. Consistent with that guiding principle, in 2023, performance-based compensation comprised approximately 94% of the total direct compensation for Trevor Baldwin, our Chief Executive Officer, and averaged approximately 90% of the total direct compensation for our other NEOs (excluding Messrs. Valentine and Wiebeck).
Compensation Details for Fiscal Year 2023
Base Salary
The Compensation Committee set 2023 base salaries for our NEOs as set forth below. Base salaries actually paid to each of our NEOs in 2023 are located in the “Salary” column of the Summary Compensation Table.
Name | Base Salary | |||
Trevor Baldwin | $ | 400,000 | ||
Bradford Hale | 300,000 | |||
Daniel Galbraith | 300,000 | |||
John Valentine | 300,000 | |||
Kris Wiebeck | 300,000 |
Annual Incentive Plan
The Compensation Committee established the following performance metrics and weighting of each for our NEOs for the 2023 Annual Incentive Plan:
Name | Organic Revenue Growth | Adjusted EBITDA Growth | Personal Objectives | |||||
Trevor Baldwin | ![]() | ![]() | ![]() | |||||
Bradford Hale | ||||||||
Daniel Galbraith | ||||||||
Kris Wiebeck | ||||||||
John Valentine |
The Compensation Committee established the following performance level ranges for organic revenue growth and adjusted EBITDA:
Performance Level | Threshold Performance | Target Performance | Superior Performance |
| ||||||
Organic Revenue Growth | 7% | 10% | 20% | |||||||
Adjusted EBITDA | $250,000,000 | $258,000,000 | $270,000,000 |
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The Compensation Committee approved personal objectives for each NEO for 2023, with the focus areas for each NEO described below. Refer to “Overview of 2023 Compensation Framework”—“Retirement Compensation” for payments received by Messrs. Valentine and Wiebeck with respect to the 2023 Annual Incentive Plan.
Name | Personal Objectives Focus Areas | |
Trevor Baldwin | Company’s reputation and culture; key strategic initiatives, organic growth and margin accretion; and talent building and succession readiness | |
Bradford Hale | Operating cash management and fiduciary cash investment; reporting roadmap and decentralized reporting; cost savings initiatives; and capital markets execution and strategies | |
Daniel Galbraith | Leaderships organization; process and cost efficiencies; performance improvement and efficiency; and business objectives implementation |
Each NEO’s Target annual incentive opportunity for fiscal year 2023 is set forth in the table below:
Target Annual Incentive Plan Opportunity | ||||||
Name
| % of Salary | $ Value | ||||
Trevor Baldwin | 300% | $ | 1,200,000 | |||
Bradford Hale | 200% | 600,000 | ||||
Daniel Galbraith | 200% | 600,000 | ||||
John Valentine | 200% | 600,000 | ||||
Kris Wiebeck | 200% | 600,000 |
The Compensation Committee set the following payout ranges for our NEOs as a percentage of the Target Annual Incentive Plan opportunity based on the achievement of the metrics above.
| Threshold | Target | Superior | |||
All NEOs | 50% | 100% | 300% |
The Compensation Committee reviewed the actual 2023 performance of each financial performance measure against Target performance to determine the percentage of Target achieved for each as follows:
Performance Level | Target Performance | Actual Performance | Performance % of Target Achieved(1) |
| ||||||
Organic Revenue Growth | 10% | 19% | 282% | |||||||
Adjusted EBITDA | $258,000,000 | $250,204,000 | 50% |
(1) | Based on Threshold, Target and Superior payouts of 50%, 100% and 300%, respectively. |
For their contribution in furthering their respective personal objective focus areas listed above, particularly, for Mr. Baldwin, his contribution to building the Company’s reputation in the industry and the Company’s talent and succession readiness, for Mr. Galbraith, his contribution to identifying and driving process and cost efficiencies, for Mr. Hale, his contributions to develop and execute cost savings initiatives, each NEO described above achieved a level of performance between Target and Superior for their respective personal objectives.
The table below sets forth each NEO’s actual Annual Incentive Plan payout amount for fiscal year 2023, which was made 100% in fully vested shares of Class A common stock consistent with the Company’s philosophy on ownership culture and executive team alignment with our shareholders. Refer to “Overview of 2023 Compensation Framework”—“Retirement Compensation” for details of payments received by Messrs. Valentine and Wiebeck with respect to the 2023 Annual Incentive Plan.
Name | 2023 Annual Incentive Plan Payout | Payout as a Percent of Target Annual Incentive Plan Opportunity | ||||
Trevor Baldwin | $ | 2,169,600 | 181% | |||
Bradford Hale | 1,122,600 | 187% | ||||
Daniel Galbraith | 1,104,600 | 184% |
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LTIP
As discussed above, based on the Compensation Committee’s review and the recommendations of FW Cook, our 2023 LTIP consists 100% of performance-based equity awards, PSUs, to further the Company’s commitment to its pay-for-performance culture. The PSUs are settled in shares of our Class A common stock, the number of which will depend on the level of performance achieved with respect to applicable Performance Goals during the Performance Period.
The table below sets forth the 2023 LTIP award grant values (at Target) that were approved by the Compensation Committee for each NEO.
Name | Target LTIP Award Grant Value | |||
Trevor Baldwin | $ | 2,000,000 | ||
Bradford Hale | 900,000 | |||
Daniel Galbraith | 900,000 | |||
John Valentine(1) | 900,000 | |||
Kris Wiebeck(1) | 900,000 |
(1) | Refer to “Overview of 2023 Compensation Framework”—“Retirement Compensation” for details of LTIP awards retained by Messrs. Valentine and Wiebeck in connection with their retirement compensation. |
The number of Target PSUs granted was determined by dividing the Target award grant value by a price per share equal to the average of the volume weighted average prices for a share of our Class A common stock on the Nasdaq across the 30 consecutive calendar days immediately prior to the grant date. PSUs are described more fully below.
PSUs
The number of shares earned pursuant to PSUs will be determined based on the following performance metrics (and weighting of each metric), in each case as measured over the Performance Period:
Performance Metric | ||||||
30% of Target Number of PSUs Based on Relative TSR v. Compensation Peer Group | ||||||
30% of Target Number of PSUs Based on Relative TSR v. Russell 3000 Growth Index | ||||||
40% of Target Number of PSUs Based on 3-year Organic Revenue Compound Annual Growth Rate |
Relative TSR v. Compensation Peer Group means the Company’s compound annual total shareholder return for the Performance Period, compared to the compound annual total shareholder return of our Compensation Peer Group for the same period. Relative TSR v. Russell 3000 Growth Index means the Company’s compound annual total shareholder return for the Performance Period, compared to the compound annual total shareholder return of the Russell 3000 Growth Index for the same period. In each case, the Company uses the average closing price for the last 30 trading days immediately prior to the beginning of the Performance Period and the average closing price for the last 30 trading days at the end of the Performance Period, as adjusted for dividends and stock splits as applicable. The 3-year organic revenue compound annual growth rate (“CAGR”) means the Company’s average annual organic revenue growth during the three-year Performance Period.
The Compensation Committee set the following performance level ranges applicable to each TSR and CAGR Performance Goal and the percentage of PSUs to be earned based on the Company’s level of achievement of the applicable TSR and CAGR Performance Goal:
Performance Level | Relative TSR Portion (60% of PSU Award) | CAGR Portion |
| |||||
Relative TSR v. Compensation Peer | Relative TSR v. Russell 3000 Growth | (40% of PSU Award) | Percentage of PSUs Earned Based on Performance Goal | |||||
3-year Organic Revenue CAGR | ||||||||
Threshold | 40th Percentile | 40th Percentile | 7% | 50% | ||||
Target | 55th Percentile | 55th Percentile | 10% | 100% | ||||
Superior | 90th Percentile | 90th Percentile | 20% | 350% |
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As illustrated above, for the Performance Period, with respect to each TSR Performance Goal, performance at the Threshold level will result in 50% of the Target number of PSUs being earned with respect to such Performance Goal; performance at the Target level will result in 100% of the Target number of PSUs being earned; performance at or above the Superior level will result in no more than a maximum of 350% of the Target number of PSUs being earned. Performance below the Threshold level will result in no PSUs being earned with respect to such Performance Goal. Performance between the foregoing levels for each Performance Goal will be calculated on the basis of linear interpolation. If the Company’s TSR for the Performance Period is negative, the maximum level of performance achievable under either of the TSR Performance Goals is Target.
The table below sets forth the grant values of PSUs for each NEO for the Performance Period, at each of Threshold, Target and Superior performance.
Name | Threshold PSU Award (50% of Target) | Target PSU Award Grant Value | Superior PSU Award (350% of Target) | |||||||||
Trevor Baldwin | $ | 1,000,000 | $ | 2,000,000 | $ | 7,000,000 | ||||||
Bradford Hale | 450,000 | 900,000 | 3,150,000 | |||||||||
Daniel Galbraith | 450,000 | 900,000 | 3,150,000 | |||||||||
John Valentine | 450,000 | 900,000 | 3,150,000 | |||||||||
Kris Wiebeck | 450,000 | 900,000 | 3,150,000 |
The following sets forth the aggregate number of PSUs our NEOs would earn, assuming achievement of the Target level of performance of all the TSR and CAGR Performance Goals over the Performance Period:
Name | Target Number of PSUs | |
Trevor Baldwin | 81,054 | |
Bradford Hale | 36,474 | |
Daniel Galbraith | 36,474 | |
John Valentine(1) | 36,474 | |
Kris Wiebeck(1) | 36,474 |
(1) | Refer to “Overview of 2023 Compensation Framework”—“Retirement Compensation” for details of Messrs. Valentine and Wiebeck retirement agreements. |
Restrictive Covenants
Each of our NEOs is subject to non-competition, Client and Colleague non-solicitation and confidentiality restrictions.
Other Compensation
Employee Benefits and Perquisites
We do not provide a defined benefit pension plan for our Colleagues, and we do not maintain any nonqualified deferred compensation plans (such as SERPs). We maintain a qualified defined contribution plan (the “401(k) Plan”) sponsored by BRP Colleague Inc., an indirect subsidiary of the Company, under which Colleagues, including our NEOs, are eligible to receive matching contributions.
The Company provides health and other welfare benefits to remain competitive in hiring and retaining Colleagues. Our NEOs are eligible to participate in these benefit plans on the same terms and conditions as all other Colleagues. We do not provide any special or enhanced health or other welfare benefits to our NEOs. In connection with the retirement of John Valentine and Kris Wiebeck, the Company agreed to pay a portion of the monthly COBRA health insurance coverage for 12 months following their retirement.
We do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide material perquisites to our NEOs. We pay for the cost of tax preparation services to our NEOs in their capacity as BRP LLC Members.
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Baldwin Risk Partners LLC Units
Certain management incentive units (“MIUs”) were granted by BRP to each of our NEOs prior to the Company’s initial public offering, and as a result of a recapitalization of such MIUs in connection with our initial public offering, such NEOs acquired LLC Units (and an equivalent number of shares of our Class B common stock). The LLC Units, together with the shares of our Class B common stock, are exchangeable on a one-to-one basis into shares of our Class A common stock. All the NEOs LLC Units, which contained identical vesting conditions to the original MIU issuances, were vested prior to December 31, 2023.
Tax and Accounting Considerations
In setting compensation for our NEOs, the Compensation Committee considers the deductibility of compensation under the Internal Revenue Code. Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of compensation that we pay to certain covered employees, including our NEOs, to $1,000,000 in any year. The Compensation Committee believes that our interests and those of our shareholders are best served by providing competitive levels of compensation, even if not fully tax-deductible.
Compensation Risk Assessment
The Compensation Committee believes that the design, implementation and governance of our executive compensation program are consistent with high standards of risk management. Our executive compensation program reflects an appropriate mix of compensation elements, balancing short-term and long-term performance objectives, cash and equity compensation, and risks and rewards.
• | The compensation framework used for making compensation decisions is multi-faceted as it incorporates multiple metrics over varying time periods and is subject to the application of informed judgment by the Compensation Committee. |
• | To further ensure that the interests of our NEOs are aligned with those of our shareholders, a significant portion of executive officer long-term incentive compensation is awarded as equity subject to vesting requirements. PSUs typically cliff-vest and settle after a three-year period based on achievement of applicable performance goals at the end of a three-year period. |
• | Executives are expected to meet the applicable stock ownership guidelines described under “Our Board of Directors and Director Nominees”—“Stock Ownership Guidelines.” |
• | Incentive compensation is subject to the Clawback Policy described under “Our Board of Directors and Director Nominees”—“Clawback Policy.” |
Based on these features, we believe our executive compensation program effectively (i) ensures that our compensation opportunities do not encourage excessive risk taking, (ii) keeps our NEOs focused on the creation of long-term, sustainable value for our shareholders and (iii) provides competitive and appropriate levels of compensation over time.
Compensation Committee Report
We, the Compensation Committee of the Board of Directors, have reviewed and discussed with management the Compensation Discussion and Analysis above. Based on this review and these discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of BRP Group, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, other than as expressly described above.
Respectfully submitted,
Ellyn Shook, Chair
Jay Cohen
Chris Sullivan
Myron Williams
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Compensation Tables |
Summary Compensation Table
The below summary compensation table contains compensation paid to our NEOs during the years ended December 31, 2023, 2022 and 2021.
Name and Position | Year | Salary ($) | Stock Awards ($)(1) | Non-equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||
Trevor Baldwin | 2023 | 400,000 | 3,828,490 | 2,169,600 | — | 6,398,090 | ||||||||||||||||
Chief Executive Officer | 2022 | 400,000 | 2,453,920 | 1,898,400 | — | 4,752,320 | ||||||||||||||||
2021 | 400,000 | 1,344,981 | 1,701,000 | — | 3,445,981 | |||||||||||||||||
| 2023 | 300,000 | 1,722,798 | 1,122,600 | 20,000 | 3,165,398 | ||||||||||||||||
Chief Financial Officer | 2022 | 295,577 | 1,051,634 | 767,532 | 18,200 | 2,132,943 | ||||||||||||||||
2021 | 300,000 | 1,488,192 | 549,000 | 14,000 | 2,351,192 | |||||||||||||||||
Daniel Galbraith | 2023 | 300,000 | 1,722,798 | 1,104,600 | 21,500 | 3,148,898 | ||||||||||||||||
President, BRP and Chief Executive Officer, | 2022 | 295,577 | 1,051,634 | 805,107 | 20,100 | 2,172,418 | ||||||||||||||||
2021 | 300,000 | 806,942 | 556,250 | 15,500 | 1,678,692 | |||||||||||||||||
John Valentine(5) | 2023 | 300,000 | 3,616,004 | — | 4,017,200 | 7,933,204 | ||||||||||||||||
Former Chief | 2022 | 300,000 | 1,051,634 | 818,133 | 19,300 | 2,189,067 | ||||||||||||||||
2021 | 300,000 | 806,942 | 573,750 | 14,000 | 1,694,692 | |||||||||||||||||
Kris Wiebeck(6) | 2023 | 300,000 | 3,616,004 | — | 4,029,750 | 7,945,754 | ||||||||||||||||
Former Chief Strategy Officer | 2022 | 300,000 | 1,051,634 | 805,107 | 20,800 | 2,177,541 | ||||||||||||||||
2021 | 300,000 | 806,942 | 586,429 | 16,000 | 1,709,371 |
(1) |
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(2) | For 2023, the amounts shown represent the dollar value of bonuses in respect of 2023 performance paid to our NEOs in 2024 in fully vested shares of our Class A common stock issued under our Omnibus Plan as follows: Mr. Baldwin—73,917 shares; Mr. Hale—38,246 shares; and Mr. Galbraith—37,633 shares. For 2022, the amounts shown represent the dollar value of bonuses in respect of 2022 performance paid to our NEOs in 2023, which was paid 100% in fully vested shares of our Class A common stock issued under our |
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Omnibus Plan, as follows: Mr. Baldwin—76,938 shares; Mr. Hale—31,106 shares; Mr. Galbraith—32,629 shares; Mr. Valentine—33,157 shares; and Mr. Wiebeck—32,629 shares. For 2021, the amounts shown represent the dollar value of bonuses in respect of 2021 performance paid to our NEOs in 2022, which was paid 50% in cash and 50% in fully vested shares of our Class A common stock issued under our Omnibus Plan, as follows: Mr. Baldwin—$850,500 cash and 32,050 shares; Mr. Hale—$274,500 cash and 10,344 shares; Mr. Galbraith—$278,125 cash and 10,480 shares; Mr. Valentine—$286,875 cash and 10,810 shares; and Mr. Wiebeck—$293,214 cash and 11,049 shares. |
(3) | For 2023, the amounts shown represent (i) tax preparation services paid for by BRP on behalf of Messrs. Hale, Galbraith, Valentine and Wiebeck (in their capacity as BRP LLC Members) in respect of 2022 taxes at a cost of $8,000, $9,500, $10,000 and $29,750 respectively; (ii) matching contributions under our 401(k) Plan for Messrs. Hale, Galbraith and Valentine of $12,000, $12,000 and $7,200, respectively; (iii) severance compensation in connection to the retirements of Messrs. Valentine and Wiebeck of $2,560,000 each; and (iii) compensation in lieu of 2023 bonuses in connection to the retirements of Messrs. Valentine and Wiebeck of $1,440,000 each. |
(4) | Mr. Hale was appointed
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Grants of Plan Based Awards for Fiscal Year 2023
The following table provides information regarding all incentive and stock awards we granted to our NEOs for 2023:
Estimated possible payouts under
| Estimated future payouts under equity incentive plan awards
| All other stock | ||||||||||||||||||||||||||||||||
Name | Grant date | awards: (#) | Grant date fair value of stock and option awards ($)(1) | |||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||
Trevor Baldwin | ||||||||||||||||||||||||||||||||||
2023 Annual Bonus | 600,000 | 1,200,000 | 3,600,000 | |||||||||||||||||||||||||||||||
PSU | 2/22/2023 | 40,527 | 81,054 | 283,694 | 3,828,490 | |||||||||||||||||||||||||||||
Bradford Hale | ||||||||||||||||||||||||||||||||||
2023 Annual Bonus | 300,000 | 600,000 | 1,800,000 | |||||||||||||||||||||||||||||||
PSU | 2/22/2023 | 18,237 | 36,474 | 127,661 | 1,722,798 | |||||||||||||||||||||||||||||
Daniel Galbraith | ||||||||||||||||||||||||||||||||||
2023 Annual Bonus | 300,000 | 600,000 | 1,800,000 | |||||||||||||||||||||||||||||||
PSU | 2/22/2023 | 18,237 | 36,474 | 127,661 | 1,722,798 | |||||||||||||||||||||||||||||
John Valentine(2) | ||||||||||||||||||||||||||||||||||
2023 Annual Bonus | 300,000 | 600,000 | 1,800,000 | |||||||||||||||||||||||||||||||
PSU | 2/22/2023 | 18,237 | 36,474 | 127,661 | 1,722,798 | |||||||||||||||||||||||||||||
PSU | 11/3/2023 | 36,610 | 73,222 | 219,534 | 1,690,617 | |||||||||||||||||||||||||||||
RSA | 11/3/2023 | 8,721 | 202,589 | |||||||||||||||||||||||||||||||
Kris Wiebeck(3) | ||||||||||||||||||||||||||||||||||
2023 Annual Bonus | 300,000 | 600,000 | 1,800,000 | |||||||||||||||||||||||||||||||
PSU | 2/22/2023 | 18,237 | 36,474 | 127,661 | 1,722,798 | |||||||||||||||||||||||||||||
PSU | 11/3/2023 | 36,610 | 73,222 | 219,534 | 1,690,617 | |||||||||||||||||||||||||||||
RSA | 11/3/2023 | 8,721 | 202,589 |
(1) | Represents the grant date fair value of stock awards granted during 2023, calculated in accordance with ASC Topic 718. The grant date fair value of stock awards granted to Messrs. Valentine and Wiebeck represent the repriced awards issued under the LTIP. |
(2) | Mr. Valentine retired from his role as our Chief Partnership Officer effective December 31, 2023. This table includes PSU and RSA awards originally issued under the LTIP during fiscal years 2021, 2022 and 2023, which are considered cancelled and reissued to Mr. Valentine in connection with his retirement agreement as follows: 15,352 repriced PSUs (with a performance period of January 1, 2021 to December 31, 2023); 21,396 repriced PSUs (with a performance period of January 1, 2022 to December 31, 2024); 36,474 issued and 36,474 repriced PSUs (with a performance period of January 1, 2023 to December 31, 2025); 3,069 repriced RSAs (vesting ratably over three years); and 5,652 repriced RSAs (vesting ratably over four years). |
(3) | Mr. Wiebeck retired from his role as our Chief Strategy Officer effective December 31, 2023. This table includes PSU and RSA awards originally issued under the LTIP during fiscal years 2021, 2022 and 2023, which were cancelled and reissued to Mr. Wiebeck in connection with his retirement agreement as follows: 15,352 repriced PSUs (with a performance period of January 1, 2021 to December 31, 2023); 21,396 repriced PSUs (with a performance period of January 1, 2022 to December 31, 2024); 36,474 issued and 36,474 repriced PSUs (with a performance period of January 1, 2023 to December 31, 2025); 3,069 repriced RSAs (vesting ratably over three years); and 5,652 repriced RSAs (vesting ratably over four years). |
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Outstanding Equity Awards at 2023 Fiscal Year-End
The following table provides information on the holdings of unvested stock awards by our NEOs at December 31, 2023.
Name | Stock Awards | |||||||||||||||||||||
Type of Equity | Number of (#) |
| Market value of ($)(1) | Equity incentive (#) |
| Equity incentive ($)(1) | ||||||||||||||||
Trevor Baldwin | RSA | — | — | 18,305 | (2) | 439,686 | ||||||||||||||||
| PSU | — | — | 202,697 | (3) | 4,868,782 | ||||||||||||||||
Bradford Hale | RSA | 25,000 | (4) | 600,500 | 8,721 | (5) | 209,478 | |||||||||||||||
PSU | — | — | 89,822 | (6) | 2,157,524 | |||||||||||||||||
Daniel Galbraith | RSA | — | — | 8,721 | (5) | 209,478 | ||||||||||||||||
PSU | — | — | 89,822 | (6) | 2,157,524 | |||||||||||||||||
John Valentine(7) | RSA | — | — | 8,721 | (5) | 209,478 | (9) | |||||||||||||||
PSU | — | — | 89,822 | (6) | 2,157,524 | (9) | ||||||||||||||||
Kris Wiebeck(8) | RSA | — | — | 8,721 | (5) | 209,478 | (9) | |||||||||||||||
PSU | — | — | 89,822 | (6) | 2,157,524 | (9) |
(1) | The amounts shown are based on the closing market price of our Class A common stock on December 31, 2023, which was $24.02 per share. |
(2) | These RSAs vest subject to Mr. Baldwin’s continued employment |
(3) | Of these PSUs, (i) 14,978 have a performance period of |
(4) | These RSAs vest on April 1, 2026 subject to Mr. Hale’s continued employment |
(5) |
|
(6) | Of these PSUs, (i) 6,420 have a performance period of January 1, 2022 to December 31, 2024 and represent payouts at the threshold performance level (50% of target awards); (ii) 21,395 have a performance period of January 1, 2022 to December 31, 2024 and represent payouts at the superior performance level (250% of target awards); (iii) 10,942 have a performance period of January 1, 2023 to December 31, 2025 and represent payouts at the threshold performance level (50% of target awards); and (iv) 51,065 have a performance period of January 1, 2023 to December 31, 2025 and represent payouts at the superior performance level (350% of target awards). The number of PSUs that are earned following the end of the performance period will vest, subject to the NEO’s continued employment (except as it pertains to Messrs. Valentine and Wiebeck’s PSUs), on March 15, 2025, March 15, 2025, March 15, 2026 and March 15, 2026, respectively. |
(7) | Mr. Valentine retired from his role as our Chief Partnership Officer effective December 31, 2023. |
(8) | Mr. Wiebeck retired from his role as our Chief Strategy Officer effective December 31, 2023. |
(9) | The repricing of Messrs. Valentine and Wiebeck’s RSA and PSU awards does not have an effect on the market value of the shares disclosed in this table. |
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Options Exercised and Stock Vested for Fiscal Year 2023
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||
Trevor Baldwin | 81,942 | 2,011,090 | ||||||
Bradford Hale | 48,562 | 1,162,593 | ||||||
Daniel Galbraith | 259,487 | 6,088,997 | ||||||
John Valentine(2) | 225,901 | 5,581,209 | ||||||
Kris Wiebeck(3) | 35,066 | 859,988 |
(1) | Calculated as the aggregate dollar amount realized upon the vesting of |
(2) | Mr. Valentine retired from his role as our Chief Partnership Officer effective December 31, 2023. |
(3) | Mr. Wiebeck retired from his role as our Chief Strategy Officer effective December 31, 2023. |
Equity Compensation Plans
BRP Group, Inc. Omnibus Incentive Plan
The purpose of the Omnibus Plan is to motivate and reward Colleagues and other individuals to perform at the highest level and contribute significantly to our success, thereby furthering the best interests of our shareholders. The Omnibus Plan provides for the grant of nonqualified stock options, stock appreciation rights (“SARs”), RSAs, restricted stock unit awards (“RSUs”), other performance awards (including performance-based RSUs such as PSUs issued in connection with our LTIP), and other cash-based awards and other share-based awards.
BRP Group, Inc. Partnership Inducement Award Plan
The purpose of the BRP Group, Inc. Partnership Inducement Award Plan (the “Inducement Plan”) to motivate and reward new Colleagues who join the Company, primarily through Partnerships, to perform at the highest level and contribute significantly to the Company’s success, thereby furthering the best interests of the Company and its shareholders. The Inducement Plan permits the grant of stock options (both nonqualified and incentive stock options), SARs, RSAs, RSUs, performance awards, other cash-based awards and other share-based awards. Such awards have a minimum vesting period of one year.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information regarding the Omnibus Plan and the Inducement Plan on December 31, 2023.
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (#) | Weighted-average exercise price of outstanding options, warrants and rights ($) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) (#) |
| ||||
Equity compensation plans approved by security holders |
|
|
|
| ||||
Omnibus Plan | — | — | 1,385,732 | (1)(2) | ||||
Equity compensation plans not approved by security holders |
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|
|
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Inducement Plan | — | — | 1,626,454 |
| ||||
|
|
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Total | — | — | 3,012,186 | |||||
|
|
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(1) | Includes a reserve for the maximum number of shares of Class |
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(2) | Pursuant to
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Employment Agreements
We have entered into employment agreements with each of our NEOs. Additional information regarding the employment arrangements and compensation agreements of each NEO is set forth directly below.
Trevor Baldwin
Chief Executive Officer
The Company entered into an employment agreement with Mr. Baldwin, effective October 28, 2019, with a term beginning on that date to serve as our Chief Executive Officer. Under this agreement, Mr. Baldwin is entitled to an annual salary of $400,000 and is eligible for an annual bonus as determined by the Compensation Committee, which may be settled in a combination of cash and equity awards at the Compensation Committee’s sole discretion. Mr. Baldwin is eligible to participate in the Omnibus Plan on the same terms and conditions applicable to other senior Company executives, with the amount of such awards to be determined by the Compensation Committee in its sole discretion.
Bradford Hale
Chief Financial Officer
The Company entered into an employment agreement with Mr. Hale, effective October 28, 2019, to serve as the Company’s Chief Accounting Officer, then subsequently amended on April 1, 2021, with a term beginning on that date, to serve as our Chief Financial Officer. Under this agreement, Mr. Hale is entitled to an annual salary of $300,000 and is eligible for an annual bonus as determined by the Compensation Committee, which may be settled in a combination of cash and equity awards at the Compensation Committee’s sole discretion. Mr. Hale is eligible to participate in the Omnibus Plan on the same terms and conditions applicable to other senior Company executives, with the amount of such awards to be determined by the Compensation Committee in its sole discretion.
Kris Wiebeck
Chief Strategy Officer
The Company entered into an employment agreement with Mr. Wiebeck, effective October 28, 2019, to serve as the Company’s Chief Financial Officer, then subsequently amended on April 1, 2021, to serve as our Chief Strategy Officer. Under this agreement, Mr. Wiebeck was entitled to an annual salary of $300,000 and was eligible for an annual bonus as determined by the Compensation Committee, which could be settled in a combination of cash and equity awards at the Compensation Committee’s sole discretion. Mr. Wiebeck was eligible to participate in the Omnibus Plan on the same terms and conditions applicable to other senior Company executives, with the amount of such awards to be determined by the Compensation Committee in its sole discretion. Effective as of December 31, 2023, Mr. Wiebeck retired from his position as Chief Strategy Officer. Refer to “Overview of 2023 Compensation Framework”—“Retirement Compensation” for details of Mr. Wiebeck’s retirement agreement and related compensation.
Daniel Galbraith
President, BRP and Chief Executive Officer, Retail Brokerage Operations
The Company entered into an employment agreement with Mr. Galbraith, effective October 28, 2019, with a term beginning on that date to serve as our Chief Operating Officer. Under this agreement, Mr. Galbraith is entitled to an annual salary of $300,000 and is eligible for an annual bonus as determined by the Compensation Committee, which may be settled in a combination of cash and equity awards at the Compensation Committee’s sole discretion. Mr. Galbraith is eligible to participate in the Omnibus Plan on the same terms and conditions applicable to other senior Company executives, with the amount of such awards to be determined by the Compensation Committee in its sole discretion. Mr. Galbraith was promoted to President, BRP and Chief Executive Officer, Retail Brokerage Operations in January 2024 without an amendment to his employment agreement.
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John Valentine
Chief Partnership Officer
The Company entered into an employment agreement with Mr. Valentine, effective October 28, 2019, with a term beginning on that date to serve as our Chief Partnership Officer. Under this agreement, Mr. Valentine was entitled to an annual salary of $300,000 and was eligible for an annual bonus as determined by the Compensation Committee, which could be settled in a combination of cash and equity awards at the Compensation Committee’s sole discretion. Mr. Valentine was eligible to participate in the Omnibus Plan on the same terms and conditions applicable to other senior Company executives, with the amount of such awards to be determined by the Compensation Committee in its sole discretion. Effective as of December 31, 2023, Mr. Valentine retired from his position as Chief Partnership Officer. Refer to “Overview of 2023 Compensation Framework”—“Retirement Compensation” for details of Mr. Valentine’s retirement agreement and related compensation.
Potential Payments Upon Termination or Change in Control
Our NEOs, excluding Kris Wiebeck and John Valentine, are entitled to certain payments and/or other benefits upon qualifying terminations of employment and/or a change in control of the Company.
None of our NEOs are entitled to enhanced salary, cash bonuses, cash severance, commissions or other cash compensation of any kind in connection with a change in control, but are eligible for certain acceleration of vesting of equity awards in connection with a change in control.
With regard to PSUs granted under our LTIP, in the event of a change in control (as defined in the Omnibus Plan) on or prior to the last day of the Performance Period, performance with respect to the Performance Goals will be determined in good faith by the Compensation Committee. The PSU awards, to the extent earned, will remain outstanding thereafter and will vest subject to the executive’s continued employment through the vesting date. If the executive’s employment is terminated by the Company without cause within 12 months following the change in control, subject to the executive officer’s execution and non-revocation of a release of claims, the PSU awards, to the extent earned, will fully vest.
With regard to RSAs granted under our LTIP, if the executive’s employment is terminated by the Company without cause or, if applicable, by the executive officer for good reason, within 12 months following a change in control, subject to the executive officer’s execution and non-revocation of a release of claims, unvested shares subject to outstanding RSAs will fully vest.
For such purposes, “change in control” generally means (i) any person or entity (with limited exceptions) is (or becomes, during any 12-month period) the beneficial owner of 50% or more of the total voting power of the stock of the Company; (ii) the replacement of more than 50% of the members of our Board of Directors during any 12-month period; (iii) the consummation of a merger or consolidation of the Company with another entity, or the issuance of voting securities in connection with the merger or consolidation of the Company with any other entity (unless (x) the Company’s voting securities outstanding immediately prior to such transaction continue to represent at least 50% of the total voting power of the stock of the successor or surviving corporation (or its parent) or (y) the merger or consolidation is effected to implement a recapitalization (or similar transaction) and no person or entity is or becomes the beneficial owner of 50% or more of either the Company’s then-outstanding shares of common stock or the combined voting power of the Company’s then-outstanding voting securities); or (iv) the sale or disposition of all or substantially all of the Company’s assets in which any person or entity acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or entity) assets from the Company that have a total gross fair market value equal to more than 50% of the total gross fair market value of all of the Company’s assets immediately prior to such acquisition(s).
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The table below sets forth the estimated value each NEO would have received with respect to the accelerated vesting of equity-based awards had a change in control and a qualifying termination of employment (as described above) occurred on December 31, 2023, determined based on the closing price per share of our Class A common stock as of December 31, 2023 and the calculated performance of PSU metrics as of December 31, 2023.
Name | Qualifying Termination Upon a Change in Control ($)(1) | |||
Trevor Baldwin |
|
| ||
RSAs | 439,686 |
| ||
PSUs | 3,730,234 | (2) | ||
Bradford Hale |
|
| ||
RSAs | 209,478 |
| ||
PSUs | 1,652,888 | (2) | ||
Daniel Galbraith |
|
| ||
RSAs | 209,478 |
| ||
PSUs | 1,652,888 | (2) |
(1) | The amounts shown are based on the closing market price of our Class A common stock on December 31, 2023, which was $24.02 per share. |
(2) | The PSU award agreements provide that, upon a change in control, the Compensation Committee will determine, in good faith, the performance achieved and the related number of shares that will vest. The amounts shown utilize TSR calculations provided by FW Cook to estimate the level of awards the Board would have determined to have been achieved at December 31, 2023. |
Effective as of December 31, 2023, John Valentine and Kris Wiebeck retired from their positions as Chief Partnership Officer and Chief Strategy Officer, respectively, under mutual agreements with the Company. Messrs. Valentine and Wiebeck each received $2.56 million of severance compensation and $1.44 million representing early payment of the 2023 bonus otherwise payable under the Company’s 2023 annual incentive plan in respect of 2023 performance. The agreements permit the continued vesting of RSAs and PSUs previously granted to Messrs. Valentine and Wiebeck under the LTIP, in each case, subject to all other conditions of the award agreements, with the exception only of Messrs. Valentine and Wiebeck’s continued employment following the retirement date. The value of RSAs determined to have been achieved by each of Messrs. Valentine and Wiebeck was approximately $0.2 million at December 31, 2023. The PSU award agreements provide that, upon a change in control, the Compensation Committee will determine, in good faith, the performance achieved and the related number of shares that will vest. We estimate the value of PSUs the Board would have determined to have been achieved by each of Messrs. Valentine and Wiebeck at December 31, 2023, based on the closing market price of our Class A common stock of $24.02 per share and utilizing TSR calculations provided by FW Cook, to be approximately $1.65 million.
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Pay Versus Performance |
Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non- PEO NEOs (4) | Value of Initial Fixed $100 Investment Based On: | Net Income (Loss) | Organic Revenue Growth (7) | ||||||||||||||||||||||||||||
Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Total Shareholder Return (5) | Peer Group Total Shareholder Return (6) | ||||||||||||||||||||||||||||
2023 | $ 6,398,090 | $ 3,745,445 | $ 5,548,314 | $ 3,040,128 | $ 149.66 | $ 158.02 | $ (164,019,000) | 19 % | ||||||||||||||||||||||||
2022 | 4,752,320 | 3,795,606 | 2,167,992 | (691,351) | 156.64 | 144.45 | (76,748,000) | 23 % | ||||||||||||||||||||||||
2021 | 3,445,981 | 3,913,812 | 1,858,487 | 3,261,901 | 224.99 | 147.05 | (58,120,000) | 22 % | ||||||||||||||||||||||||
2020 | 1,124,000 | 1,124,000 | 1,197,355 | 6,792,375 | 186.73 | 106.87 | (29,885,000) | 16 % |
(1) | Summary compensation table total for PEO amounts represent those reported for Trevor Baldwin. our Chief Executive Officer, for each of the corresponding years in the “Total” column of the Summary Compensation Table. |
(2) | Compensation actually paid to PEO represents that of Mr. Baldwin, which is computed in accordance with Item 402(v) of Regulation S-K and does not reflect total compensation actually realized or received. Compensation actually paid to PEO is calculated as follows for each of the years presented. Equity values are calculated in accordance with ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
Calculation of Compensation Actually Paid to PEO | 2023 | 2022 | 2021 | 2020 | ||||||||||||
Summary Compensation Table Total | $ | 6,398,090 | $ | 4,752,320 | $ | 3,445,981 | $ | 1,124,000 | ||||||||
Less: value of Stock Awards per the Summary Compensation Table | (3,828,490 | ) | (2,453,920 | ) | (1,344,981 | ) | — | |||||||||
Plus: year-end fair value of awards granted in covered fiscal year that are unvested atyear-end | 2,546,549 | 2,291,676 | 1,812,812 | — | ||||||||||||
Plus or minus: covered year change in fair value of awards granted in prior years that are unvested at year-end | (553,618 | ) | (775,704 | ) | — | — | ||||||||||
Plus or minus: change in fair value from vest date of awards granted in prior years that vest in the covered fiscal year | (13,111 | ) | (18,766 | ) | — | — | ||||||||||
Less: prior year-end fair value of awards granted in prior years that failed to meet vesting in the covered fiscal year | (803,975 | ) | — | — | — | |||||||||||
Compensation Actually Paid to PEO | $ | 3,745,445 | $ | 3,795,606 | $ | 3,913,812 | $ | 1,124,000 | ||||||||
(3) | Average summary compensation table total for Non-PEO NEOs is calculated as (i) the average summary compensation table total amounts for Messrs. Hale, Galbraith, Valentine and Wiebeck for 2023, 2022 and 2021 and (ii) the average summary compensation table total amounts for Messrs. Galbraith, Valentine and Wiebeck for 2020; Mr. Hale’s 2020 compensation is not required to be disclosed because 2021 was his first year as an NEO. |
(4) | Average compensation actually paid to Non-PEO NEOs is calculated as (i) the average amounts paid to Messrs. Hale, Galbraith, Valentine and Wiebeck for 2023, 2022 and 2021 and (ii) the average amounts paid to Messrs. Galbraith, Valentine and Wiebeck for 2020; Mr. Hale’s 2020 compensation is not required to be disclosed because 2021 was his first year as an NEO. Compensation actually paid tonon-PEO NEOs is computed in accordance with Item 402(v) of RegulationS-K and does not reflect total compensation actually realized or received. Compensation actually paid tonon-PEO NEOs is calculated as follows for each of the years presented. Equity values are calculated in accordance with ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
Calculation of Compensation Actually Paid to Non-PEO NEOs | 2023 | 2022 | 2021 | 2020 | ||||||||||||
Summary Compensation Table Total | $ | 5,548,314 | $ | 2,167,992 | $ | 1,858,487 | $ | 1,197,355 | ||||||||
Less: value of Stock Awards per the Summary Compensation Table | (2,669,401 | ) | (1,051,634 | ) | (977,255 | ) | — | |||||||||
Plus: year-end fair value of awards granted in covered fiscal year that are unvested atyear-end | 1,485,366 | 982,104 | 1,313,314 | — | ||||||||||||
Plus or minus: covered year change in fair value of awards granted in prior years that are unvested at year-end | (245,240 | ) | (1,712,535 | ) | 1,319,326 | 5,773,023 | ||||||||||
Plus or minus: change in fair value from vest date of awards granted in prior years that vest in the covered fiscal year | (137,999 | ) | (1,077,278 | ) | (251,971 | ) | (178,003 | ) | ||||||||
Less: prior year-end fair value of awards granted in prior years that failed to meet vesting in the covered fiscal year | (940,912 | ) | — | — | — | |||||||||||
Compensation Actually Paid to Non-PEO NEOs | $ | 3,040,128 | $ | (691,351 | ) | $ | 3,261,901 | $ | 6,792,375 | |||||||
(5) | Total shareholder return represents that of the Company,
47 Financial Performance Measures As previously discussed under the “Compensation Discussion and Analysis,” pay for performance is our guiding principle. The measures used by the Company for both long-term and short-term incentive awards have been selected because the Compensation Committee believes they incentivize our executive officers to make business decisions that align with the long-term interests of our shareholders. The most important financial performance measures used to link compensation actually paid to our NEOs for 2023 are as follows:
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of Trevor Baldwin, our Chief Executive Officer (“CEO”), to the annual total compensation of the median compensated Colleague (excluding Mr. Baldwin ). For 2023, Mr. Baldwin’s total compensation was $6,398,090, as reported for 2023 in the “Total” column in the Summary Compensation Table, and the annual total compensation of our median compensated Colleague was $66,630. The ratio between these two amounts was 96 to 1.This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) and the methodology described below. Because the SEC rules for identifying the median compensated Colleague and calculating the pay ratio based on that Colleague’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. We determined there was no change in our employee population or employee compensation arrangements during the last completed fiscal year that we believe would significantly impact the pay ratio disclosure for 2023. Accordingly, we used the same median employee we identified in 2022 for purposes of calculating our pay ratio disclosure for fiscal year 2023. As of December 31, 2022, our total Colleague population consisted of approximately 3,800 individuals, and we used 2022 gross taxable income as set forth in our payroll data from these individuals to determine our median Colleague. We calculated the annual total compensation of our median Colleague for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, which is consistent with the methodology used to calculate the annual total compensation of our CEO, as reported for 2023 in the “Total” column of the Summary Compensation Table.48 Beneficial Ownership of Directors and Executive Officers The following table sets forth information as of the Record Date of April 8, 2024 (unless otherwise indicated) regarding the beneficial ownership of the Company’s Class A common stock and Class B common stock by (i) each director and director nominee, (ii) each named executive officer, and (iii) all current directors and executive officers as a group. As of April 8, 2024, 117,567,667 shares of BRP Group’s common stock were issued and outstanding, consisting of 65,945,475 shares of Class A common stock and 51,622,192 shares of Class B common stock. Subject to the terms of the Amended LLC Agreement, Class B common stock can be exchanged (together with a corresponding number of LLC Units) for shares of Class A common stock on a one-for-one basis, subject to certain restrictions, and the shares of Class B common stock will be cancelled on a one-for-one basis with the redemption or exchange. Beneficial ownership of shares of our Class A common stock reflected in this table does not include beneficial ownership of shares of our Class A common stock for which such LLC Units may be redeemed or exchanged. In accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable upon the vesting of restricted stock units within 60 days of April 8, 2024. Unless otherwise indicated, the address for each listed shareholder is: c/o 4211 W. Boy Scout Boulevard. Suite 800, Tampa, Florida 33607. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and dispositive power with respect to all shares of common stock.
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50 Beneficial Ownership of More Than 5% Owners The following table sets forth information as of the Record Date of April 8, 2024 (unless otherwise indicated) regarding the beneficial ownership of the Company’s Class A common stock and Class B common stock by each person known to the Company to beneficially own more than 5% of each class of outstanding stock of the Company based solely on the Company’s review of filings with the SEC pursuant to Section 13(d) or 13(g) of the Exchange Act. As of April 8, 2024, 117,567,667 shares of BRP Group’s common stock were issued and outstanding, consisting of 65,945,475 shares of Class A common stock and 51,622,192 shares of Class B common stock. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and dispositive power with respect to all shares of common stock.
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