XML 39 R20.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Stock Based Compensation (Notes) | 12 Months Ended
--- | ---
Dec. 31, 2018 shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 10,269,384
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-Based Compensation Performance Stock Plan In 1996, the Company adopted and the shareholders approved a performance stock plan, under which until the suspension of the plan in 2010, up to 28,800,000 Performance Stock Plan (“PSP”) shares could be granted to key employees contingent on the employees’ future years of service with the Company and other performance-based criteria established by the Compensation Committee of the Company’s Board of Directors. Before participants may take full title to Performance Stock, two vesting conditions must be met. Of the grants currently outstanding, specified portions satisfied the first condition for vesting based upon 20% incremental increases in the 20-trading-day average stock price of Brown & Brown’s common stock from the price on the business day prior to date of grant. Performance Stock that has satisfied the first vesting condition is considered “awarded shares.” Awarded shares are included as issued and outstanding common stock shares and are included in the calculation of basic and diluted net income per share. Dividends are paid on awarded shares and participants may exercise voting privileges on such shares. Awarded shares satisfy the second condition for vesting on the earlier of a participant’s: (i) 15 years of continuous employment with Brown & Brown from the date shares are granted to the participants (or, in the case of the July 2009 grant to Powell Brown, 20 years), (ii) attainment of age 64 (on a prorated basis corresponding to the number of years since the date of grant), or (iii) death or disability. On April 28, 2010, the PSP was suspended and any remaining authorized, but unissued shares, as well as any shares forfeited in the future, will be reserved for issuance under the 2010 Stock Incentive Plan (the “SIP”). At December 31, 2018, 10,269,384 shares had been granted, net of forfeitures, under the PSP. As of December 31, 2018, 1,196,092 shares had met the first condition of vesting and had been awarded, and 9,073,292 shares had satisfied both conditions of vesting and had been distributed to participants. Of the shares that have not vested as of December 31, 2018, the initial stock prices ranged from $8.16 to $12.84. The Company uses a path-dependent lattice model to estimate the fair value of PSP grants on the grant date. A summary of PSP activity for the years ended December 31, 2018, 2017 and 2016 is as follows:
| Weighted- average grant date fair value |  | Granted shares |  | Awarded shares |  | Shares not yet awarded
Outstanding at January 1, 2016 | $ | 4.52 |  |  | 3,204,428 |  |  | 3,188,428 |  |  | 16,000 |
Granted | $ | — |  |  | — |  |  | — |  |  | — |
Awarded | $ | — |  |  | — |  |  | 8,000 |  |  | (8,000 | )
Vested | $ | 3.19 |  |  | (1,012,844 | ) |  | (1,012,844 | ) |  | — |
Forfeited | $ | 5.26 |  |  | (185,034 | ) |  | (177,034 | ) |  | (8,000 | )
Outstanding at December 31, 2016 | $ | 5.11 |  |  | 2,006,550 |  |  | 2,006,550 |  |  | — |
Granted | $ | — |  |  | — |  |  | — |  |  | — |
Awarded | $ | — |  |  | — |  |  | — |  |  | — |
Vested | $ | 4.81 |  |  | (277,602 | ) |  | (277,602 | ) |  | — |
Forfeited | $ | 5.24 |  |  | (34,472 | ) |  | (34,472 | ) |  | — |
Outstanding at December 31, 2017 | $ | 5.16 |  |  | 1,694,476 |  |  | 1,694,476 |  |  | — |
Granted | $ | — |  |  | — |  |  | — |  |  | — |
Awarded | $ | — |  |  | — |  |  | — |  |  | — |
Vested | $ | 5.53 |  |  | (453,860 | ) |  | (453,860 | ) |  | — |
Forfeited | $ | 4.92 |  |  | (44,524 | ) |  | (44,524 | ) |  | — |
Outstanding at December 31, 2018 | $ | 5.03 |  |  | 1,196,092 |  |  | 1,196,092 |  |  | — |
The total fair value of PSP grants that vested during each of the years ended December 31, 2018, 2017 and 2016 was $11.9 million, $6.3 million and $18.1 million, respectively. Stock Incentive Plan On April 28, 2010, the shareholders of the Company, Inc. approved the Stock Incentive Plan (“SIP”) that provides for the granting of stock options, stock, restricted stock units, and/or stock appreciation rights to employees and directors contingent on criteria established by the Compensation Committee of the Company’s Board of Directors. The principal purpose of the SIP is to attract, incentivize and retain key employees by offering those persons an opportunity to acquire or increase a direct proprietary interest in the Company’s operations and future success. The SIP includes a sub-plan applicable to Decus Insurance Brokers Limited (“Decus”) which, is a subsidiary of Decus Holdings (U.K.) Limited. The shares of stock reserved for issuance under the SIP are any shares that are authorized for issuance under the PSP and not already subject to grants under the PSP, and that were outstanding as of April 28, 2010, the date of suspension of the PSP, together with PSP shares and SIP shares forfeited after that date. As of April 28, 2010, 12,093,536 shares were available for issuance under the PSP, which were then transferred to the SIP. In addition, in May 2016 and May 2017 our shareholders approved amendments to the SIP to increase the shares available for issuance by an additional 2,400,000 and 2,600,000, respectively. The Company has granted stock to our employees in the form of Restricted Stock Awards and Performance Stock Awards under the SIP. To date, a substantial majority of stock grants to employees under the SIP vest in five to ten years. The Performance Stock Awards are subject to the achievement of certain performance criteria by grantees, which may include growth in a defined book of business, Organic Revenue growth and operating profit growth of a profit center, Organic Revenue growth of the Company and consolidated EPS growth at certain levels of the Company. The performance measurement period ranges from three to five years. Beginning in 2016, certain Performance Stock Awards have a payout range between 0% to 200% depending on the achievement against the stated performance target. Prior to 2016, the majority of the grants had a binary performance measurement criteria that only allowed for 0% or 100% payout. Non-employee members of the Board of Directors received shares annually issued pursuant to the SIP as part of their annual compensation. A total of 33,720 shares were issued in January 2016, 22,700 shares were issued in January 2017 and 26,620 shares were issued in January 2018. The Company uses the closing stock price on the day prior to the grant date to determine the fair value of SIP grants and then applies an estimated forfeiture factor to estimate the annual expense. Additionally, the Company uses the path-dependent lattice model to estimate the fair value of grants with PSP-type vesting conditions as of the grant date. SIP shares that satisfied the first vesting condition for PSP-type grants or the established performance criteria are considered awarded shares. Awarded shares are included as issued and outstanding common stock shares and are included in the calculation of basic and diluted net income per share. A summary of SIP activity for the years ended December 31, 2018, 2017 and 2016 is as follows:
| Weighted- average grant date fair value |  | Granted shares |  | Awarded shares |  | Shares not yet awarded |
Outstanding at January 1, 2016 | $ | 14.37 |  |  | 12,553,944 |  |  | 2,259,988 |  |  | 10,293,956 |  |
Granted | $ | 17.76 |  |  | 1,944,198 |  |  | 365,306 |  |  | 1,578,892 |  | (1)
Awarded | $ | 12.46 |  |  | — |  |  | 2,862,638 |  |  | (2,862,638 | ) |
Vested | $ | 13.66 |  |  | (333,768 | ) |  | (333,768 | ) |  | — |  |
Forfeited | $ | 12.67 |  |  | (1,908,262 | ) |  | (351,576 | ) |  | (1,556,686 | ) |
Outstanding at December 31, 2016 | $ | 14.98 |  |  | 12,256,112 |  |  | 4,802,588 |  |  | 7,453,524 |  |
Granted | $ | 20.82 |  |  | 1,392,912 |  |  | 241,334 |  |  | 1,151,578 |  | (2)
Awarded | $ | 15.72 |  |  | — |  |  | 326,808 |  |  | (326,808 | ) |
Vested | $ | 12.61 |  |  | (484,914 | ) |  | (484,914 | ) |  | — |  |
Forfeited | $ | 14.89 |  |  | (342,120 | ) |  | (76,212 | ) |  | (265,908 | ) |
Outstanding at December 31, 2017 | $ | 15.58 |  |  | 12,821,990 |  |  | 4,809,604 |  |  | 8,012,386 |  |
Granted | $ | 22.87 |  |  | 1,577,721 |  |  | 454,313 |  |  | 1,123,408 |  | (3)
Awarded | $ | 15.89 |  |  | — |  |  | 2,489,905 |  |  | (2,489,905 | ) |
Vested | $ | 14.09 |  |  | (933,916 | ) |  | (933,916 | ) |  | — |  |
Forfeited | $ | 16.37 |  |  | (2,363,420 | ) |  | (224,587 | ) |  | (2,138,833 | ) |
Outstanding at December 31, 2018 | $ | 16.69 |  |  | 11,102,375 |  |  | 6,595,319 |  |  | 4,507,056 |  |
(1) | Of the 1,578,892 shares of performance-based restricted stock granted in 2016, the payout for 706,264 shares may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table includes all restricted stock grants at a target payout of 100%.
(2) | Of the 1,151,578 shares of performance-based restricted stock granted in 2017, the payout for 641,652 shares may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table includes all restricted stock grants at a target payout of 100%.
(3) | Of the 1,123,408 shares of performance-based restricted stock granted in 2018, the payout for 576,886 shares may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table includes all restricted stock grants at a target payout of 100%.
The following table sets forth information as of December 31, 2018, 2017 and 2016, with respect to the number of time-based restricted shares granted and awarded, the number of performance-based restricted shares granted, and the number of performance-based restricted shares awarded under our Performance Stock Plan and 2010 Stock Incentive Plan:
Year |  | Time-based restricted stock granted and awarded |  | Performance-based restricted stock granted |  | Performance-based restricted stock awarded
2018 |  | 454,313 |  |  | 1,123,408 |  | (1) | 2,489,905 |
2017 |  | 241,334 |  |  | 1,151,578 |  | (2) | 326,808 |
2016 |  | 365,306 |  |  | 1,578,892 |  | (3) | 2,870,638 |
(1) | Of the 1,123,408 shares of performance-based restricted stock granted in 2018, the payout for 576,886 shares may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table includes all restricted stock grants at a target payout of 100%.
(2) | Of the 1,151,578 shares of performance-based restricted stock granted in 2017, the payout for 641,652 shares may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table includes all restricted stock grants at a target payout of 100%.
(3) | Of the 1,578,892 shares of performance-based restricted stock granted in 2016, the payout for 706,264 shares may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table includes all restricted stock grants at a target payout of 100%.
At December 31, 2018, 8,697,491 shares were available for future grants. This amount is calculated assuming the maximum payout for all restricted stock grants. Employee Stock Purchase Plan The Company has a shareholder-approved Employee Stock Purchase Plan (“ESPP”) with a total of 34,000,000 authorized shares of which 7,316,901 were available for future subscriptions as of December 31, 2018. Employees of the Company who regularly work 20 hours or more per week are eligible to participate in the ESPP. Participants, through payroll deductions, may allot up to 10% of their compensation towards the purchase of a maximum of $25,000 worth of Company stock between August 1st of each year and the following July 31st (the “Subscription Period”) at a cost of 85% of the lower of the stock price as of the beginning or end of the Subscription Period. The Company estimates the fair value of an ESPP share option as of the beginning of the Subscription Period as the sum of: (1) 15% of the quoted market price of the Company’s stock on the day prior to the beginning of the Subscription Period, and (2) 85% of the value of a one-year stock option on the Company stock using the Black-Scholes option-pricing model. The estimated fair value of an ESPP share option as of the Subscription Period beginning in August 2018 was $5.88. The fair values of an ESPP share option as of the Subscription Periods beginning in August 2017 and 2016, were $4.32 and $3.81, respectively. For the ESPP plan years ended July 31, 2018, 2017 and 2016, the Company issued 985,601, 1,058,024 and 1,029,330 shares of common stock, respectively. These shares were issued at an aggregate purchase price of $18.7 million, or $18.96 per share, in 2018, $16.4 million, or $15.52 per share, in 2017, and $15.0 million, or $14.62 per share, in 2016. For the five months ended December 31, 2018, 2017 and 2016 (portions of the 2018-2019, 2017-2018 and 2016-2017 plan years), 402,349, 435,027 and 494,046 shares of common stock (from authorized but unissued shares), respectively, were subscribed to by ESPP participants for proceeds of approximately $9.9 million, $8.2 million and $7.7 million, respectively. Summary of Non-Cash Stock-Based Compensation Expense The non-cash stock-based compensation expense for the years ended December 31 is as follows:
(in thousands) |  | 2018 |  | 2017 |  | 2016
Stock incentive plan |  | $ | 28,027 |  |  | $ | 24,899 |  |  | $ | 11,049 |
Employee stock purchase plan |  | 4,744 |  |  | 4,025 |  |  | 3,698 |
Performance stock plan |  | 748 |  |  | 1,707 |  |  | 1,305 |
Total |  | $ | 33,519 |  |  | $ | 30,631 |  |  | $ | 16,052 |
Summary of Unamortized Compensation Expense As of December 31, 2018, the Company estimates there to be $97.1 million of unamortized compensation expense related to all non-vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans, based upon current projections of grant measurement against performance criteria. That expense is expected to be recognized over a weighted average period of 3.29 years.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Gross number of share options (or share units) granted during the period. + References No definition available. + Details
Name: | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
Namespace Prefix: | us-gaap_
Data Type: | xbrli:sharesItemType
Balance Type: | na
Period Type: | duration