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Stock Based Compensation (Notes)
 12 Months Ended
Dec. 31, 2017
shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross 5,156,954
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] Stock-Based Compensation
Performance Stock Plan
In 1996, Brown & Brown adopted and the shareholders approved a performance stock plan, under which until the suspension of the plan in 2010, up to 14,400,000 Performance Stock Plan (“PSP”) shares could be granted to key employees contingent on the employees’ future years of service with Brown & Brown 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 EPS. 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, 2017, 5,156,954 shares had been granted under the PSP. As of December 31, 2017, 847,238 shares had met the first condition of vesting and had been awarded, and 4,309,716 shares had satisfied both conditions of vesting and had been distributed to participants. Of the shares that have not vested as of December 31, 2017, the initial stock prices ranged from $15.58 to $25.68.
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, 2017, 2016 and 2015 is as follows:
 
Weighted-
Average
Grant
Date Fair
Value
 
Granted
Shares
 
Awarded
Shares
 
Shares Not
Yet
Awarded
Outstanding at January 1, 2015
$
8.71

 
1,928,631

 
1,903,213

 
25,418

Granted
$
—

 
—

 
—

 
—

Awarded
$
—

 
—

 
—

 
—

Vested
$
5.55

 
(208,889
)
 
(208,889
)
 
—

Forfeited
$
9.78

 
(117,528
)
 
(100,110
)
 
(17,418
)
Outstanding at December 31, 2015
$
9.03

 
1,602,214

 
1,594,214

 
8,000

Granted
$
—

 
—

 
—

 
—

Awarded
$
—

 
—

 
4,000

 
(4,000
)
Vested
$
6.39

 
(506,422
)
 
(506,422
)
 
—

Forfeited
$
10.52

 
(92,517
)
 
(88,517
)
 
(4,000
)
Outstanding at December 31, 2016
$
10.23

 
1,003,275

 
1,003,275

 
—

Granted
$
—

 
—

 
—

 
—

Awarded
$
—

 
—

 
—

 
—

Vested
$
9.61

 
(138,801
)
 
(138,801
)
 
—

Forfeited
$
10.47

 
(17,236
)
 
(17,236
)
 
—

Outstanding at December 31, 2017
$
10.32

 
847,238

 
847,238

 
—


The total fair value of PSP grants that vested during each of the years ended December 31, 2017, 2016 and 2015 was $6.3 million, $18.1 million and $6.8 million, respectively.
Stock Incentive Plan
On April 28, 2010, the shareholders of Brown & Brown, 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, 6,046,768 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 an amendment to the SIP to increase the shares available for issuance by an additional 1,200,000 and 1,300,000, respectively.
The Company has granted stock grants 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 four 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 growth and operating profit growth of a profit center, EBITDA growth, organic 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 15,700 shares were issued in January 2015, 16,860 shares were issued in January 2016 and 11,350 shares were issued in January 2017.
The following table sets forth information as of December 31, 2017, 2016 and 2015, 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
2017
 
120,667

 
575,789

(1) 
163,404

2016
 
182,653

 
789,446

(2) 
1,435,319

2015
 
164,646

 
316,520

 
—

(1)
Of the 575,789 shares of performance-based restricted stock granted in 2017, the payout for 320,826 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 789,446 shares of performance-based restricted stock granted in 2016, the payout for 353,132 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, 2017, 4,197,920 shares were available for future grants. This amount is calculated assuming the maximum payout for all restricted stock grants. 
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 EPS.
A summary of SIP activity for the years ended December 31, 2017, 2016 and 2015 is as follows:
 
Weighted-
Average
Grant
Date Fair
Value
 
Granted
Shares
 
Awarded
Shares
 
Shares Not
Yet
Awarded
 
Outstanding at January 1, 2015
$
28.19

 
6,659,047

 
1,060,890

 
5,598,157

 
Granted
$
31.74

 
481,166

 
164,646

 
316,520

 
Awarded
$
—

 
—

 
—

 
—

 
Vested
$
—

 
—

 
—

 
—

 
Forfeited
$
26.32

 
(863,241
)
 
(95,542
)
 
(767,699
)
 
Outstanding at December 31, 2015
$
28.74

 
6,276,972

 
1,129,994

 
5,146,978

 
Granted
$
35.52

 
972,099

 
182,653

 
789,446

(1) 
Awarded
$
24.93

 
—

 
1,431,319

 
(1,431,319
)
 
Vested
$
27.31

 
(166,884
)
 
(166,884
)
 
—

 
Forfeited
$
25.34

 
(954,131
)
 
(175,788
)
 
(778,343
)
 
Outstanding at December 31, 2016
$
29.96

 
6,128,056

 
2,401,294

 
3,726,762

 
Granted
$
41.65

 
696,456

 
120,667

 
575,789

(2) 
Awarded
$
31.44

 
—

 
163,404

 
(163,404
)
 
Vested
$
25.22

 
(242,457
)
 
(242,457
)
 
—

 
Forfeited
$
29.77

 
(171,060
)
 
(38,106
)
 
(132,954
)
 
Outstanding at December 31, 2017
$
31.16

 
6,410,995

 
2,404,802

 
4,006,193

 

(1)
Of the 789,446 shares of performance-based restricted stock granted in 2016, the payout for 353,132 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 575,789 shares of performance-based restricted stock granted in 2016, the payout for 320,826 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%.
Employee Stock Purchase Plan
The Company has a shareholder-approved Employee Stock Purchase Plan (“ESPP”) with a total of 17,000,000 authorized shares of which 4,151,251 were available for future subscriptions as of December 31, 2017. 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 2017 was $8.64. The fair values of an ESPP share option as of the Subscription Periods beginning in August 2016 and 2015, were $7.61 and $6.43, respectively.
For the ESPP plan years ended July 31, 2017, 2016 and 2015, the Company issued 529,012, 514,665 and 539,389 shares of common stock, respectively. These shares were issued at an aggregate purchase price of $16.4 million, or $31.03 per share, in 2017, $15.0 million, or $29.23 per share, in 2016, and $14.4 million, or $26.62 per share, in 2015.
 
For the five months ended December 31, 2017, 2016 and 2015 (portions of the 2017-2018, 2016-2017 and 2015-2016 plan years), 217,514, 247,023 and 231,803 shares of common stock (from authorized but unissued shares), respectively, were subscribed to by ESPP participants for proceeds of approximately $8.2 million, $7.7 million and $6.8 million, respectively.
Incentive Stock Option Plan
On April 21, 2000, Brown & Brown adopted, and the shareholders approved, a qualified incentive stock option plan (the “ISOP”) that provides for the granting of stock options to certain key employees for up to 4,800,000 shares of common stock. On December 31, 2008, the ISOP expired. The objective of the ISOP was to provide additional performance incentives to grow Brown & Brown’s pre-tax income in excess of 15% annually. The options were granted at the most recent trading day’s closing market price and vest over a period of 1-to-10 years , with a potential acceleration of the vesting period to 3-to-6 years based upon achievement of certain performance goals. All of the options expire 10 years after the grant date.
The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options on the grant date. The risk-free interest rate is based upon the U.S. Treasury yield curve on the date of grant with a remaining term approximating the expected term of the option granted. The expected term of the options granted is derived from historical data; grantees are divided into two groups based upon expected exercise behavior and are considered separately for valuation purposes. The expected volatility is based upon the historical volatility of the Company’s common stock over the period of time equivalent to the expected term of the options granted. The dividend yield is based upon the Company’s best estimate of future dividend yield.
A summary of stock option activity for the years ended December 31, 2017, 2016 and 2015 is as follows:
Stock Options
 
Shares
Under
Option
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
(in thousands)
Outstanding at January 1, 2015
 
470,356

 
$
18.57

 
3.1
 
$
5,087

Granted
 
—

 
$
—

 
 
 
 

Exercised
 
(151,767
)
 
$
18.48

 
 
 
 

Forfeited
 
(49,000
)
 
$
19.36

 
 
 
 

Expired
 
—

 
$
—

 
 
 
 

Outstanding at December 31, 2015
 
269,589

 
$
18.48

 
2.2
 
$
2,395

Granted
 
—

 
$
—

 
 
 
 

Exercised
 
(64,589
)
 
$
18.48

 
 
 
 

Forfeited
 
(30,000
)
 
$
18.48

 
 
 
 

Expired
 
—

 
$
—

 
 
 
 

Outstanding at December 31, 2016
 
175,000

 
$
18.48

 
1.2
 
$
4,616

Granted
 
—

 
$
—

 
 
 
 

Exercised
 
(175,000
)
 
$
18.48

 
 
 
 

Forfeited
 
—

 
$
—

 
 
 
 

Expired
 
—

 
$
—

 
 
 
 

Outstanding at December 31, 2017
 
—

 
$
—

 
N/A
 
$
—

Ending vested and expected to vest at December 31,
2017
 
—

 
$
—

 
N/A
 
$
—

Exercisable at December 31, 2017
 
—

 
$
—

 
N/A
 
$
—

Exercisable at December 31, 2016
 
175,000

 
$
18.48

 
1.2
 
$
4,616

Exercisable at December 31, 2015
 
164,589

 
$
18.48

 
2.2
 
$
2,241


The total intrinsic value of options exercised, determined as of the date of exercise, during the years ended December 31, 2017, 2016 and 2015 was $4.7 million, $1.0 million and $2.2 million, respectively. The total intrinsic value is calculated as the difference between the exercise price of all underlying awards and the quoted market price of the Company’s stock for all in-the-money stock options at December 31, 2017, 2016 and 2015, respectively.
There are no option shares available for future grant under the ISOP since this plan expired as of December 31, 2008.
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)
 
2017
 
2016
 
2015
Stock Incentive Plan
 
$
24,899

 
$
11,049

 
$
11,111

Employee Stock Purchase Plan
 
4,025

 
3,698

 
3,430

Performance Stock Plan
 
1,707

 
1,305

 
972

Incentive Stock Option Plan
 
—

 
—

 
—

Total
 
$
30,631

 
$
16,052

 
$
15,513


Summary of Unamortized Compensation Expense
As of December 31, 2017, there was approximately $87.9 million of unamortized compensation expense related to all non-vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans. That expense is expected to be recognized over a weighted-average period of 3.62 years.