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Not only is A.J.C. Smith the top executive of the world's largest insurance broker, but he also is the highest paid chairman and chief executive officer among U.S. publicly traded brokers.

Mr. Smith, chairman and chief executive officer of Marsh &McLennan Cos. Inc., held the top-paid spot for four years prior to 1996, when Aon Corp.'s Patrick G. Ryan was awarded a 58.2% pay raise and bumped Mr. Smith to the No. 2 position (BI, July 21, 1997).

Mr. Smith was paid $1,200,000 in salary both in 1997 and 1996. However, his bonus grew to $1,000,000 in 1997 from $850,000 in 1996. Total cash compensation increased by 7.3% in 1997.

The number of beneficially owned shares more than doubled for Mr. Smith to 209,581 shares, after M&M's stock split two-for-one at the end of June 1997. At a July 10 closing price of $62.06 on the New York Stock Exchange, the market value of his stock was $13,006,596.86.

Lawrence J. Lasser, president and CEO of M&M subsidiary Putnam Investments Inc., earned well above the total compensation of Mr. Smith, however. From 1996 to 1997, Mr. Lasser's cash compensation figure swelled by 24.1%. Mr. Lasser, who earns a base salary of $870,000 per year, also received bonus income of $12,000,000 for 1997, up from $9,500,000 in 1996.

Marsh & McLennan's total corporate revenues grew 42.6% to $6.30 billion in 1997 on a pro forma basis from an actual $4.42 billion in 1996. Net income dropped 13.0% to $399.4 million in 1997 from $459.3 million in 1996, due to Johnson & Higgins integration costs (BI, Feb. 23).

Aon's Mr. Ryan's total cash compensation last year declined 31.6%. His 1997 salary of $1,032,692 went up from $957,692 in 1996, but his bonus of $731,250 was significantly less than the $1,620,000 he earned in 1996.

Aon stock split three-for-two effective May 14, 1997. Mr. Ryan beneficially owns 19,526,973 shares of stock, which at a July 10 NYSE price of $73.81 per share, were worth $1,441,285,877.13.

Aon reported total corporate revenues of $5.75 billion for 1997, up 47.9% over 1996. That total includes revenues from the company's insurance underwriting operations. Aon also reported 1997 brokerage and consulting revenues of $3.77 billion, up 88.5% from a year earlier.

However, those reported figures do not include full years of performance for Aon's 1997 acquisitions, Jauch & Huebener and Minet Group, which would boost gross corporate revenues to the Business Insurance estimate of more than $6.01 billion, up 54.5% from an estimated $3.88 billion in 1996.

Aon's net income went down by 10.9% to $298.8 million in 1997 from $335.2 million in 1996, due to extensive acquisition activity, including Alexander & Alexander, Minet Group, Sodarcan and Jauch & Huebener. BI ranks Aon Corp. as the second-largest broker in the world.

Bruce D. Guthart, chairman, president and CEO for Kaye Group Inc., the 28th-largest broker of U.S. business, is the third-highest paid CEO among U.S. publicly traded brokers.

Mr. Guthart's salary declined to $453,300 in 1997 from $589,007 in 1996, but his bonus jumped to $315,000 in 1997 from $158,600 in 1996. Overall, his total cash compensation increased by 2.8% in 1997.

At a July 10 NASDAQ price of $7.13 per share, Mr. Guthart's 11,157 shares of beneficially owned stock are worth $79,549.41.

BI estimates Kaye Group Inc.'s total corporate revenues for 1997 grew 8.1%, to $65.6 million in 1997 from $60.7 million in 1996. Net income dramatically rose by 41.9%, to $4.4 million in 1997 from $3.1 million in 1996, due, in part, to the acquisition of Western Insurance Associates and a reduction in expenses.

Andrew L. Rogal, president and CEO for Hilb, Rogal & Hamilton Co., experienced a significant increase in cash compensation from 1996 to 1997, making him the fourth-highest paid CEO among U.S. publicly traded brokers. His salary increased to $360,428 in 1997 from $305,000 in the previous year. Mr. Rogal's bonus in 1997 was $325,000; he did not receive a bonus in 1996.

In June 1997, Mr. Rogal replaced Robert H. Hilb as CEO. Mr. Hilb had served as CEO since 1991 and was president through 1995.

Mr. Rogal beneficially owns 37,340 shares of HRH stock. When calculated at the July 10 NYSE price of $17.75 per share, Mr. Rogal's shares were valued at $662,785.00.

Hilb, Rogal & Hamilton's gross revenues grew 9.8% to $173.7 million in 1997 from $158.2 million in 1996. HRH's net income rose in 1997 by 12.1%, to $12.8 million from $11.4 million. BI ranks HRH as the eighth-largest broker of U.S. business.

Based on gross revenues that increased 5.6% -- to $488.0 million in 1997 from $462.0 million in 1996 -- Arthur J. Gallagher & Co. is the world's fifth-largest broker, according to BI's ranking. J. Patrick Gallagher, president and CEO of Arthur J. Gallagher & Co., is also the fifth-highest paid CEO of U.S. publicly traded brokers.

Mr. Gallagher earned 72.2% more in total cash compensation in 1997 than in the prior year. Mr. Gallagher's salary remained consistent for both years, at $356,000; however, in 1997, his bonus ballooned to $300,000 from $25,000 in 1996. According to the company's proxy statement, the compensation committee, of which Mr. Gallagher is a member, set a new bonus formula that is based on growth in net earnings per share.

Mr. Gallagher is also the beneficial owner of 130,166 shares of Gallagher stock, excluding 36,820 shares held in trust for his minor children. At a July 10 NYSE price of $44.31 per share, Mr. Gallagher's shares held a market value of $5,767,655.46.

Arthur J. Gallagher & Co.'s net income climbed 23.7% to $53.3 million in 1997 from $43.1 million in 1996. Acquisitions of benefit companies Byerly & Co. and Arnold & Co., as well as property/casualty broker Trinder & Associates were among factors that boosted the company's profits.

Poe & Brown Inc.'s chairman, president and CEO, J. Hyatt Brown, is the sixth-highest compensated U.S. broker CEO. Mr. Brown, whose total cash compensation rose 9.0% from 1996 to 1997, earned $615,142, compared with $564,450 in the prior year. His salary rose to $396,200 in 1997 from $377,000 in 1996, and his bonus increased to $218,942 from $187,450.

Mr. Brown also beneficially owns 2,727,732 shares in joint tenancy with his wife. This represents 21.2% of common stock offered by Poe & Brown. On July 10, when the NYSE priced individual shares at $39.75, these shares had a market value of $108,427,347.00.

In 1997, Poe & Brown's revenues increased 8.9%, to $129 million. Net income also grew to $19.4 million in 1997 from $16.5 million in 1996, due in part to internal growth.

Meadowbrook Insurance Group Inc. Chairman, CEO and Director Merton J. Segal is the seventh-highest paid CEO among U.S. publicly traded brokers.

Cash compensation grew 15.9% in 1997 for Mr. Segal, who brought home $453,200 in salary and bonus income of $56,650. In 1996, he did not receive a bonus but earned a comparable salary of $440,000. At a July 10 NYSE price of $30.38 per share, Mr. Segal's 3,034,530 shares of beneficially owned stock held a market value of $92,189,021.40.

Including net earned premiums, Meadowbrook's corporate gross revenues declined by 7.4% in 1997 to $101.1 million from 1996's revenues of $109.2 million.

Meadowbrook's net income grew by 49.8% to $13.0 million in 1997 from $8.7 million the previous year. In an address to shareholders by Mr. Segal, posted on Meadowbrook's World Wide Web site, he attributed the increased income, in part, to growth in fee-based risk management operations.

On the average, 1997 cash compensation for these CEOs was just over $1.0 million, with the average salary equaling $607,403, and the average bonus amounting to $420,977.

Paul Gavejian, a principal with Buck Consultants Inc. in Stamford, Conn., said this level of compensation is "definitely in line" with other financial service industries. He said brokers are situated between the lower-paying banking institutions and the highest-paying securities firms.

Mr. Gavejian also said he is not surprised to see base salaries holding steady from year to year. "Companies are not making the kinds of base salary adjustments as they have in the past," he said. "They are now diverting it to the bonus and incentive pool."

Ira Kay, practice director for executive compensation in the New York office of Bethesda, Ma.-based consultant Watson Wyatt Worldwide, said stock options are what set the executives apart.

He does, however, agree that the average broker CEO compensation "seems comparative with general American industry in terms of size and pay levels, but below other financial service sectors."

One compensation consultant disagreed, saying that the pay should be twice as much. Alan Johnson, managing director for Johnson Associates of New York, said, "I think it's low. The insurance industry traditionally is paid low.'