Aon plc (AON) Earnings Call Transcript & Summary

Hello, and welcome to the 2023 Annual General Meeting of Shareholders of Aon. It is now my pleasure to turn today's meeting over to Lester Knight, Chairman of the company's Board of Directors. Mr. Knight, the floor is yours.

Thank you. Good morning, ladies and gentlemen. I'm Lester Knight, Chairman of Aon's Board of Directors. At this time, it's my pleasure to welcome all of you to Aon's 2023 Annual General Meeting of Shareholders, which is being held in Dublin, Ireland. We also have shareholders who are joining us virtually through our meeting center website. We are also joined by a representative of Computershare Investor Services who has been appointed to serve as Inspector of Election at today's meeting, and representatives of Ernst & Young, our independent registered public accounting firm. In accordance with the notice of the meeting, given that it has now passed 8:30 a.m. local Dublin time, I'm informed that there is a quorum present, and I declare the Annual General Meeting is open. There are 7 items of business on today's agenda on which a vote will be taken. These agenda items are as set forth in the proxy materials sent to shareholders on or about April 28, 2023. Furthermore, we are formally laying before the meeting for consideration by the shareholders, the company's statutory financial statements under Irish law for the fiscal year ended December 31, 2022, including the reports of the Directors and the Irish statutory auditor thereon. Copies of these statutory financial statements have been mailed to shareholders of record and are also available in hard copy form at the meeting venue as well as on the Financial Reports section of our website. There is no requirement under Irish law that these financial statements be approved by shareholders, and we are not seeking any such approval at today's meeting. In addition, we will present a business review of Aon's 2022 affairs. There will be an opportunity for shareholders to ask questions. Shareholders attending in person in Dublin can ask questions by raising their hand during the question-and-answer period. Those attending virtually can submit their questions at any time by clicking the Message icon on the meeting center website. I'm joined in Dublin by Aon's CEO, Greg Case. Mr. Case and other members of our Board of Directors are either with us in Dublin or participating virtually and are available to answer any shareholder questions. Now it's my pleasure to introduce Darren Zeidel, the Company's Secretary, who will provide the Secretary's report.

Thank you, Lester. Notice of this Annual General Meeting, together with Aon's proxy statement and annual reports for the year ended December 31, 2022, were made available beginning April 28, 2023, to the shareholders of record as of the close of business on April 14, 2023. Aon has appointed Abby Cowart of Computershare as Inspector of Election for the voting at the Annual General Meeting. In accordance with the Articles of Association, voting today will be conducted by way of a poll on each of the resolutions put to the meeting. This is seen as best practice as it gives all shareholders the opportunity to participate in the decision-making of the company and have their votes recorded. Based on a preliminary report from the Inspector of Election of the 204,410,926 shares entitled to vote at the meeting, approximately 90% of the total voting rights of the shareholders entitled to vote are present in person or by proxy at the meeting. As a result, I declare that a quorum is present, and we will now proceed with the meeting. Now I would like to turn the meeting over to Greg Case.

Thank you, Darren. I appreciate it. On behalf of the management team, we'd like to thank our shareholders for their continued support as well as our Board of Directors for their support and guidance throughout the year. 2022 was another strong year in our firm's history, and it's all thanks to the tremendous dedication by our colleagues and everything they've done for our clients, for our colleagues and for each other. I'm also happy to report that going forward, we are well positioned for continued success as we help our clients address an increasing world of risk and complexity and help them with their challenges throughout the coming years. I'd now like to turn the call over to Christa, our CFO, to report on our financial performance. Christa?

Thank you so much, Greg. Our strong 2022 financial results reflect continued progress, momentum and discipline throughout the firm. 2022 was another year of strong top and bottom line performance, driven by the strength of our Aon United Strategy and Aon Business Services. We delivered strong results against all of our key financial metrics, 6% organic revenue growth, 70 basis points adjusted operating margin expansion to 38.7%, 7% earnings per share growth and over $3 billion in free cash flow, all of which contributed to a firm high of 30.6% return on invested capital. Now I'd like to turn the meeting over to Lester.

Thank you, Christa and Greg, for the update. Now we're ready to take your questions. Please direct any questions to Greg, Christa, me or any other member of the Board of Directors. Any shareholder who wishes to ask questions, should please raise your hand if you are attending in person in Dublin. If you're attending virtually, please enter your questions online via our meeting center website. Please give your name or the name of the person you represent and ask your questions. I kindly remind you that questions must be confined to the business of this meeting. There being no questions, I would now like to turn the meeting back to Darren for the resolutions to be considered at today's Annual General Meeting.

Thank you, Lester. The following individuals have been nominated for reelection as Directors of the company, and each will be proposed for election by way of a separate ordinary resolution of the company: Lester B. Knight, Gregory C. Case, Jin-Yong Cai, Jeffrey C. Campbell; Fulvio Conti, Cheryl A. Francis, Adriana Karaboutis, Richard C. Notebaert, Gloria Santona, Sarah Smith, Byron O. Spruell and Carolyn Y. Woo. There are 6 additional matters scheduled to be acted upon at this meeting. In accordance with the recommendation of the Board of Directors, I move the following proposals for approval: As an ordinary resolution, an advisory vote to approve the compensation of the named executive officers as set forth in Aon's proxy statement. As an ordinary resolution and advisory vote on the frequency of holding an advisory vote on compensation of the company's named executive officers. As an ordinary resolution, the ratification of the appointment of Ernst & Young LLP as Aon's independent registered public accounting firm for the year ending December 31, 2023. As an ordinary resolution, the reappointment of Ernst & Young Chartered Accountants as Aon's statutory auditor under Irish law to hold office until the conclusion of the next Annual General Meeting. As an ordinary resolution, the authorization of the Board of Directors or the Audit Committee of the Board of Directors to determine the remuneration of Ernst & Young Chartered Accountants in its capacity as statutory auditor under Irish law. And as an ordinary resolution approval of the Aon plc 2011 Incentive Plan as amended and restated. The full text of each of the resolutions is set out in the proxy statement as required by our Articles of Association. The vote will be taken on a poll. As a result, each person represented in person or by proxy is entitled to 1 vote for every Class A ordinary share held. The voting standard required for each resolution to pass is set forth in Aon's proxy statement. I'll now turn the meeting back over to Lester.

Thank you. We will now conduct the official business of the meeting. It is now 8:38 local Dublin time. I formally propose that each of the resolutions set out in the Notice of the Meeting are put to the meeting, and I declare the polls open for voting on all of the resolutions. [Voting]

Let me spend a moment reviewing the voting procedures. Proxy statements and proxy voting cards are mailed or made available to all shareholders prior to this meeting. Those of you who returned the proxies prior to this meeting authorized the persons named in the proxy to vote on all proposals coming before the meeting. Similarly, if you granted your proxy over the telephone or Internet, you do not need to vote during the meeting. Any shareholders attending physically in person who has not submitted a proxy or wishes to change his or her vote, please stand and you will be given a ballot. All ballots are in. I now declare the polls closed. The Inspector of Election is requested to tabulate the proxies and ballots and report the final voting results to the Company's Secretary. Darren will announce the provisional results as soon as possible. Please join me in thanking all the Directors for all their time and effort they devote on behalf of Aon and its shareholders. I'd also like to thank Greg, Christa and their management team for their efforts on behalf of Aon and all of its shareholders. Now I'd like to ask Darren to report the provisional voting results.

Following a review of proxies received and tabulated, each nominee for election as Director received a majority of the votes cast at this meeting. Further, a majority of the votes cast at this meeting on the advisory vote on the frequency of holding an advisory vote on the compensation of the company's named executive officers were voted in favor of holding such an advisory vote every 1 year. In addition, each of the other proposed resolution has been approved as required. These results are provisional. The Inspector of Election will furnish a written report of the final vote count, which will be attached as an exhibit to the minutes of this meeting reported in a filing by Aon with the Securities and Exchange Commission and made available on the company's website. Now I turn the meeting back to Lester for closing remarks.

Thank you, Darren. That now concludes the business of the meeting. I'd like to express our sincere appreciation to all our shareholders who attended the Annual General Meeting and to those who submitted proxies. I now declare this meeting closed. Thank you very much.

This concludes the meeting. You may now disconnect.