Insurance brokerage adjusted compensation expense ratio measures adjusted compensation expense as a percentage of adjusted Brokerage revenue.
Gallagher reported a 53.4% adjusted compensation expense ratio in the second quarter of 2026, up from 51.3% a year earlier. Adjusted compensation expense was $1.865B.
Compensation is the largest operating cost bucket
The ratio was far larger than the adjusted operating expense ratio of 13.3%.
That makes labor cost conversion central to Brokerage profitability.
The ratio was affected by unusual prior-year revenue
Gallagher said lower interest income versus second-quarter 2025 increased the ratio, partly offset by savings from headcount controls.
Compare it with Brokerage adjusted EBITDAC margin and Risk Management adjusted compensation ratio.
Primary source: Arthur J. Gallagher Q2 2026 SEC-filed earnings release.
Part of the Insurance Brokerage & Risk Management Economics
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- AJGOpen operating-model research →10 of 10 reviewed concepts in Insurance Brokerage & Risk Management EconomicsBrokerage labor and margin conversion3 of 3 bridge concepts supportedContinue through this bridge:Brokerage Adjusted EBITDAC MarginBrokerage Organic Revenue Growth
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Compare Brokerage adjusted compensation intensity while preserving revenue-denominator, prior-year interest-income, and headcount-control effects.
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