John Doyle: So Andrew, we’re working our way through some headwinds in the capital markets, but again feel terrific about the growth in 2022 and we believe we’re well positioned in 2023 as well. Do you have a follow up?
Andrew Kligerman: Yes, one quick follow up, just curious about the JLT integration cost of $91 million in the quarter, just given that it’s been, I think the deal was 2019, so I was just curious what that was?
John Doyle: It was 2019. Mark, maybe you can share with Andrew.
Mark McGivney: And Andrew that pretty much was the final step of integration with the JLT and it related to basically the provisions for shutting down abandoning their headquarters in London as we were able to finally consolidate all of our headcount into our location and into Tower Place. That is an action that was planned at the very early stages of the integration. It just took us that long to refit Tower Place to accommodate all the headcount.
Andrew Kligerman: Got it. Thanks so much.
John Doyle: Thank you. Andrew, we’re ready for our next question.
Operator: And our next question comes from the line of Yaron Kinar with Jefferies.
Yaron Kinar: Good morning. First question, you had talked about the potential for maybe some compensation structure changes and then environment. Given that that you’ve been in this market before, can you maybe give us some ideas or some reflections of how this played out in previous hard markets? How much compensation or commission rate changes in hard markets?
John Doyle: You know Yaron our commission levels have been fairly constant for a number of years. As I said, with some of our larger clients at Guy Carpenter, we’ve had capped commission agreements that have been in place for many years. And so we work with those clients to be fairly remunerated for the work that we do over the course of the year. And so, we have good, healthy relationships with those clients and work our way through them. So I don’t think there’s really anything more to share than that.
Yaron Kinar: Okay. And my other question is with regards to the restructuring, so the workforce action that you identified, does that implicate or impact any of the hires that you had back in 2021?
John Doyle: No. we feel terrific about the strategic talent that we brought into the organization over the course of the last couple of years. We invested in talent last year as well. The returns on those investments have been absolutely terrific and driving a meaningful amount of our growth in 2022 and we expect it to drive growth for us in 2023 as well. So as I said, the actions that we took were more about aligning our workforce and skillsets with evolving needs. And it also is connected in some part with how we challenged ourselves to operate more efficiently, more simply and bringing our businesses closer together.
Yaron Kinar: Thanks and nice year ahead.
John Doyle: Thanks Yaron. I appreciate it. Andrew, next question please?
Operator: And our next question comes from the line of Brian Meredith with UBS.
Brian Meredith: Yes and thanks. Two of them for you. First one Mark, I’m just curious, the $4 billion of kind of planned capital deployment this year, how does that necessarily, how does that relate to kind of what your expectations are on free cash flow? Because I think you actually had $4 billion of capital when you expected to deploy last year?
Mark McGivney: Sure. so Brian, we do plan to deploy about $4 billion of capital. The largest source of that capital deployment will be free cash flow that we expect to generate. We also entered, if you saw our balance sheet, we entered the year with a little bit of cash from the debt raise we did late last year. So, that will provide some additional capital as well.
Brian Meredith: But I guess my point is, you don’t expect free cash will be flat year-over-year, do you?
Mark McGivney: Well, free cash flow for us has been a great story as you know, over a long period of time and over time tends to track pretty well with our strong earnings growth. And our outlook is for solid earnings growth. But cash flow can be volatile. So we generally stay away from predicting free cash flow with precision. But as I said, the biggest source of capital underpinning our projected deployment is going to be the free cash flow we generate.
Brian Meredith: Great, that’s helpful. And then John, I’m just curious a lot of big corporations out there are tightening belts right now in preparation for what they see as a challenging 2023. And I appreciate you’re looking for still a pretty good strong 2023. Maybe you can just remind us what’s the lag effect that you see with your revenues vis-Ã -vis kind of a slowdown in business activity out there? I always remember there’s like some lag effect.
John Doyle: Well, it’s hard to talk about lag with any precision. And my comments earlier about the broader environment really carry the day. I mean, yes, it’s an uncertain environment. It’s maybe modestly more positive when you think about the reopening of China and how Europe has at least so far successfully managed energy related risks and the impact on the economy in Europe. Having said that, there’s still meaningful geopolitical risks out there. But for us, again, nominal GDP is more indicative than real GDP and demand remains strong for us in our businesses. So, as I said, we expect a bit of a moderation of demand at Oliver Wyman, but broadly speaking, our businesses overall including strong growth prospects for Guy Carpenter remain quite healthy.
And if things get more difficult, we know how to perform in a more challenging environment. We have the playbook and we’re ready to execute on that playbook. We’re a resilient business and so we’ll navigate whatever comes in front of us.
Brian Meredith: Great, thanks for the answer.
John Doyle: Thanks Brian. Andrew?
Operator: And our next question comes from the line of Ryan Tunis with Autonomous Research.
