Business Context and Reporting Period
This Form 8-K Current Report was filed by Brown & Brown, Inc. on February 26, 2026, with the report date reflecting events occurring on February 26, 2026, and March 3, 2026. The filing details the adoption of the 2026 annual cash incentive plan and the authorization of performance-based equity awards for named executive officers under the 2019 Stock Incentive Plan.
Key Financial Metrics and Compensation Targets
The filing does not report historical revenue, profit, cash flow, or debt figures. Instead, it outlines the financial metrics used to determine executive compensation for the 2026 fiscal year and a five-year performance period beginning January 1, 2026.
- 2026 Cash Incentive Metrics:
- 40% Weight: Specified organic revenue growth targets (Company-wide or segment-specific).
- 40% Weight: Adjusted EBITDAC Margin (Income before taxes less amortization, depreciation, interest, and change in estimated acquisition earn-out payables, excluding gain/loss on disposal, divided by total revenues).
- 20% Weight: Achievement of personal objectives.
- Performance Stock Award (PSA) Metrics (5-Year Period):
- 50% Weight: Cumulative share price CAGR and relative total share price return vs. S&P 500 median.
- 50% Weight: Cumulative EPS CAGR (excluding after-tax impact of earn-out changes, disposal gains/losses, and amortization) and relative total share price return vs. S&P 500 median.
Material Changes and Executive Compensation Details
The primary material event is the establishment of new compensation structures for 2026. The filing specifies target cash incentive amounts and equity grant values for named executive officers:
| Executive Officer | 2026 Target Cash Incentive | Performance Stock Award (PSA) Grant Value | Performance Stock Unit (PSU) Grant Value |
|---|---|---|---|
| J. Powell Brown | $5,500,000 | $10,000,000 | N/A |
| R. Andrew Watts | $1,400,000 | $5,000,000 | N/A |
| J. Scott Penny | $1,100,000 | $2,500,000 | N/A |
| Chris L. Walker | $1,400,000 | N/A | $1,500,000 |
Payout Ranges:
- Cash Incentive: Minimum 0% to Maximum 200% of target.
- PSA Shares: Minimum 0% to Maximum 805% of target.
- PSUs: Minimum 0% to Maximum 299% of target.
Outlook, Risks, and Unusual Items
Management Commentary and Outlook: The Compensation Committee retains discretion to adjust calculations to exclude items that are "unusual in nature or infrequently occurring." The equity awards are structured to align executive interests with long-term shareholder value through a five-year measurement period.
Contingencies and Vesting Conditions:
- Acceleration: Vesting accelerates in the event of death, disability, or termination without cause within 12 months following a change in control.
- Qualified Retirement: For Chris L. Walker's PSUs, awarded units will be paid post-retirement on scheduled vesting dates if the officer is in good standing.
- Dividend Rights: Recipients of PSA Shares have voting and dividend rights immediately upon awarding. PSU recipients accrue dividend equivalents paid within 30 days of the applicable dividend date.
Investor Verification Checklist
- Verify the closing stock price on the last business day before March 3, 2026, to calculate the exact number of shares/units granted.
- Review the specific "organic revenue growth" and "Adjusted EBITDAC" definitions in the full 2026 proxy statement or subsequent filings to understand exclusions.
- Monitor the S&P 500 index performance relative to Brown & Brown's share price over the five-year period (2026-2030) to assess potential equity payout levels.
- Confirm whether any "unusual or infrequently occurring" items are identified in future quarterly reports that could alter the cash incentive calculation.