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DEF 14A 1 proxy2005.txt 2005 PROXY STATEMENT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Under Rule 14a-12 Marsh & McLennan Companies, Inc. ------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------------- [_] Fee paid previously with Preliminary Materials: ------------------------------------------------------------------------------- [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No: ------------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------------- [GRAPHIC OMITTED] Marsh o Putnam o Mercer Marsh & McLennan Companies 2005 Notice of Annual Meeting And Proxy Statement [MARSH & MCLENNAN COMPANIES, INC. LETTERHEAD] Dear MMC Stockholder: You are cordially invited to attend our annual stockholders meeting. The meeting will be held at 10:00 a.m. on Thursday, May 19, 2005 in the auditorium on the second floor at 1221 Avenue of the Americas, New York, New York. In addition to the matters described in the attached proxy statement, we will report on our Company's activities during 2004. You will have an opportunity to ask questions and to meet your directors and executives. Whether you plan to come to the annual meeting or not, your representation and vote are important, and your shares should be voted. If you have received this proxy statement by regular mail, you may vote by signing, dating and returning the enclosed proxy card or via telephone or over the Internet by following the instructions on your proxy card. If you have received this proxy statement by electronic mail, you may vote by telephone or over the Internet by following the instructions in the e-mail message. We look forward to seeing you at the meeting. Your vote is important to us. Very truly yours, /s/ Michael G. Cherkasky ----------------------------------- Michael G. Cherkasky President & Chief Executive Officer March 31, 2005 MARSH & McLENNAN COMPANIES, INC. 1166 Avenue of the Americas New York, New York 10036-2774 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT Time: 10:00 a.m. Local Time Date: May 19, 2005 Place: Second Floor Auditorium 1221 Avenue of the Americas New York, New York Purpose: 1. To elect five persons to serve as Class I directors, each for a three-year term; 2. To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm; 3. To vote on amendments to our employee and senior executive incentive and stock award plans; 4. To vote on three proposals submitted by stockholders; and 5. To conduct any other business that may properly come before the meeting. This notice and proxy statement describes the matters being voted on and contains certain other information. In this material, we refer to Marsh & McLennan Companies, Inc. as "MMC", the "Company", "we" or "us". Only stockholders of record on March 21, 2005 may vote at the annual meeting. You will need proof of ownership of MMC stock to enter the meeting. This proxy solicitation material is being mailed to stockholders on or about March 31, 2005 with a copy of MMC's 2004 Annual Report, which includes financial statements for the period ended December 31, 2004. Your vote is important. If you received this proxy statement by regular mail, you may cast your vote by mail, telephone or over the Internet by following the instructions on your proxy card. If you received this proxy statement in an e-mail message, you may cast your vote by telephone or over the Internet by following the instructions in the e-mail message. /s/Peter J. Beshar ------------------- Peter J. Beshar Corporate Secretary March 31, 2005 TABLE OF CONTENTS

2 INFORMATION ABOUT OUR ANNUAL MEETING AND SOLICITATION OF PROXIES Who May Vote Holders of our common stock, as recorded in our stock register on March 21, 2005, may vote at the meeting. As of that date, there were 524,262,100 shares of common stock outstanding and entitled to one vote per share. A list of stockholders will be available for inspection at the principal executive offices of MMC at 1166 Avenue of the Americas, New York, New York for at least ten days prior to the meeting. How To Vote You may vote in person at the meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting. Most stockholders have a choice of proxy voting by using a toll free telephone number, voting through the Internet or, if they received their proxy materials by regular mail, completing the proxy card and mailing it in the postage-paid envelope provided. If you received your materials by regular mail, please refer to your proxy card or the information forwarded by your bank, broker or other holder of record to see which options are available to you. Executors, administrators, trustees, guardians, attorneys and other representatives voting on behalf of a stockholder should indicate the capacity in which they are signing and corporations should vote by an authorized officer whose title should be indicated. How Proxies Work MMC's board of directors is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting, or at any adjournment thereof, in the manner you direct. You may vote for all, some, or none of our director nominees. You may also vote for or against the other proposals or abstain from voting. If you sign and return a proxy card or otherwise vote by telephone or Internet but do not specify how to vote, we will vote your shares in favor of our director nominees, in favor of Items 2 and 3 and against Items 4, 5 and 6. As of the date of this proxy statement, we do not know of any other business that will be presented at the meeting. If other business shall properly come before the meeting, including any proposal submitted by a stockholder that was omitted from this proxy statement in accordance with applicable federal securities laws, the persons named in the proxy will vote according to their best judgment. Revoking a Proxy You may revoke your proxy before it is voted by submitting a new proxy with a later date, by voting in person at the meeting, or by sending written notification addressed to: Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036-2774 Attn: Mr. William J. White, Assistant Corporate Secretary Mere attendance at the meeting will not revoke a proxy that was previously submitted to MMC. Quorum and Conduct of Meeting In order to carry on the business of the meeting, we must have a quorum. This means at least a majority of the outstanding shares eligible to vote must be represented at the meeting, either by proxy or in person. The chairman of the annual meeting has broad authority to conduct the annual meeting so that the business of the meeting is carried out in an orderly and timely manner. In doing so, the chairman has broad discretion to establish reasonable rules for discussion, comments and questions during the meeting. The chairman also is entitled to rely upon applicable law regarding disruptions or disorderly conduct to ensure that the meeting is conducted in a manner that is fair to all participants. Attendance at the Meeting Only stockholders, their proxy holders, and MMC's guests may attend the meeting. Admission to the meeting will be on a first-come, first-served basis. Verification of ownership may be requested at the admissions desk. If your shares are held in the name of your broker, bank, or other nominee, you must bring to the meeting an account statement or letter from the nominee indicating that you are the beneficial owner of the shares on March 21, 2005, the record date for voting. 3 Votes Needed Directors are elected by a plurality of the votes cast. "Plurality" means that the individuals who receive the largest number of votes cast FOR are elected as directors up to the maximum number of directors to be chosen at the meeting. Votes withheld from any director nominee will not be counted in such nominee's favor. All other matters to be acted on at the meeting require the affirmative vote of a majority of the shares of MMC stock present or represented and entitled to vote at the meeting to constitute the action of the stockholders. In accordance with Delaware law, abstentions will be treated as present and entitled to vote for purposes of the preceding sentence, while broker nonvotes will not. A "broker nonvote" is a proxy submitted by a broker in which the broker fails to vote on behalf of a client on a particular matter for lack of instruction when such instruction is required by the rules of the New York Stock Exchange. Broker nonvotes will be counted for purposes of determining the presence of a quorum for the transaction of business. Electronic Access to Proxy Materials and Annual Report This proxy statement and the 2004 Annual Report can be viewed on our website at http://www.mmc.com/annualreport.html. Most stockholders may elect to view future proxy statements and annual reports over the Internet instead of receiving paper copies in the mail. If you are a stockholder of record, you may choose this option and save MMC the cost of producing and mailing these documents by following the instructions provided when you vote over the Internet. If you hold your MMC stock through a bank, broker or other holder of record, please refer to the information provided by that entity for instructions on how to elect to view our future proxy statements and annual reports over the Internet. Active employees of MMC who hold MMC stock in employee stock plan accounts or are stockholders of record will, beginning this year, receive their proxy materials by electronic delivery to their business e-mail accounts. If you are an active employee or if you choose to view our future proxy statements and annual reports over the Internet, you will receive an e-mail message with instructions on how to access MMC's proxy statement and annual report and vote. If you chose to view future proxy materials over the Internet, your choice will remain in effect until you tell us otherwise. To view, cancel or change your enrollment profile, please go to www.investordelivery.com. Solicitation of Proxies We pay the expenses of preparing the proxy materials and soliciting this proxy. We also reimburse brokers and other nominees for their expenses in sending these materials to you and obtaining your voting instructions. In addition to this mailing, proxies may be solicited personally, electronically or by telephone by our directors, officers, other employees or our agents. We have retained Georgeson Shareholder Communications Inc. as our agent to assist in the proxy solicitation at a fee of approximately $11,000, plus expenses. If any of our directors, officers and other employees assist in soliciting proxies, they will not receive additional compensation for those services. Multiple Stockholders Sharing Same Address If you and other residents at your mailing address with the same last name own shares of common stock through a bank, broker or other holder of record, your bank or broker may have sent you a notice that your household will receive only one annual report and proxy statement for each company in which the members of your household hold stock through that bank or broker. This practice of sending only one copy of proxy materials to holders residing at a single address is known as "householding", and is designed to reduce printing and postage costs. If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. If you did not receive a householding notice from your bank, broker or other holder of record, you can request householding by contacting that entity. You may revoke your consent to householding at any time by calling 1-800-542-1061. If you wish to receive a separate paper copy of the annual report or proxy statement, you may telephone Corporate Development at (212) 345-5475 or write to: Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036-2774 Attn: Corporate Development 4 ITEM 1 ELECTION OF DIRECTORS Our board of directors is divided into three classes. Members of each class serve for a three-year term. Stockholders elect one class of directors at each annual meeting. At this annual meeting, stockholders will vote on the election of the five nominees described below for a term ending at the 2008 Annual Meeting. The following section contains information provided by the nominees and continuing directors about their principal occupation, business experience and other matters. As part of MMC's efforts to pursue corporate governance best practices, management directors Peter Coster, Charles A. Davis, Mathis Cabiallavetta, Ray J. Groves and A.J.C. Smith resigned from the board in November 2004. Mr. Jeffrey W. Greenberg resigned from the board in October 2004. All five of the nominees are current directors of MMC. Each nominee has indicated to MMC that he or she will serve if elected. We do not anticipate that any nominee will be unable or unwilling to stand for election, but if that happens, your proxy may be voted for another person nominated by the board. The board of directors recommends a vote FOR the election of all five nominees. Nominees for Election as Directors For a Three-Year Term Expiring in 2008 [PHOTO OMITTED] Michael G. Cherkasky Director since 2004 Mr. Cherkasky, age 55, is president and chief executive officer of MMC. He is also chairman and chief executive officer of Marsh Inc., MMC's risk and insurance services subsidiary. Prior to being named to his current positions in October 2004, Mr. Cherkasky was president and chief executive officer of Kroll Inc., the global risk consulting company acquired by MMC in July 2004. Since then, he had also been responsible for Marsh's Risk Consulting Practice. Mr. Cherkasky joined Kroll in 1994, rising to the position of president and chief executive officer in 2001. Prior to joining Kroll, Mr. Cherkasky spent 16 years in the criminal justice system, including serving as chief of the Investigations Division for the New York County District Attorney's Office. [PHOTO OMITTED] Stephen R. Hardis Director since 1998 Executive Committee Audit Committee (chair) Mr. Hardis, age 69, was chairman of Eaton Corporation from 1996 until his retirement in 2000. Mr. Hardis joined Eaton in 1979, and was its chief executive officer from 1995 to 2000. He is chairman of Axcelis Technologies, Inc. and a director of American Greetings Corporation, Lexmark International Corporation, Nordson Corporation, Progressive Corporation and Steris Corporation. 5 [PHOTO OMITTED] The Rt. Hon. Lord Lang of Monkton, DL Director since 1997 Executive Committee Compensation Committee Directors & Governance Committee Lord Lang, age 64, was a member of the British Parliament from 1979 to 1997. He served in the cabinet as president of the Board of Trade and secretary of state for trade and industry from 1995 to 1997 and as secretary of state for Scotland from 1990 to 1995. Lord Lang is chairman of BFS US Special Opportunities Trust plc and Thistle Mining Inc. He is also non-executive chairman of the Patrons of the National Galleries of Scotland and a governor of Rugby School, England. Thistle Mining Inc., a Canadian corporation, is currently undergoing a financial reorganization pursuant to the Canadian Companies' Creditors Arrangement Act. [PHOTO OMITTED] Morton O. Schapiro Director since 2002 Compensation Committee Directors & Governance Committee Mr. Schapiro, age 51, is president of Williams College. Prior to joining Williams College, he was dean of the College of Letters, Arts and Sciences of the University of Southern California from 1994 to 2000, the University's vice president for planning from 1999 to 2000 and chair of its Department of Economics from 1991 to 1994. Mr. Schapiro is a trustee of the Williamstown Theatre Festival, the Sterling & Francine Clark Art Institute, the College Board, the Massachusetts Museum of Contemporary Art and Hillel. [PHOTO OMITTED] Adele Simmons Director since 1978 Executive Committee Audit Committee Mrs. Simmons, age 63, is vice chair of Chicago Metropolis 2020 and president of the Global Philanthropy Partnership. From 1989 to 1999, she was president of the John D. and Catherine T. MacArthur Foundation. Ms. Simmons is a director of the Shorebank Corporation. She is also a trustee of the Field Museum of Chicago and chair of the board of the Fair Labor Association. 6 Directors Continuing in Office (Term Expiring in 2006) [PHOTO OMITTED] Gwendolyn S. King Director since 1998 Audit Committee Directors & Governance Committee Ms. King, age 64, is president of Podium Prose, a speaker's bureau. From 1992 until 1998 she was senior vice president, corporate and public affairs at Peco Energy. From 1989 to 1992 she served as commissioner of the Social Security Administration in the U.S. Department of Health and Human Services. Ms. King is a director of Lockheed Martin Corporation, Monsanto Company and the not-for-profit National Association of Corporate Directors. [PHOTO OMITTED] David A. Olsen Director since 1997 Audit Committee Mr. Olsen, age 67, was chairman of Johnson & Higgins from 1991 until its business combination with MMC in 1997. He served as vice chairman of MMC from May through December of 1997. He joined Johnson & Higgins in 1966, and was its chief executive officer from 1990 to 1997. Mr. Olsen is a director of U.S. Trust Corporation. He is trustee emeritus of Bowdoin College, a trustee of Landmark Volunteers, a director of Salisbury Visiting Nurses Association and an honorary director of New York's South Street Seaport Museum. Directors Continuing in Office (Term Expiring in 2007) [PHOTO OMITTED] Lewis W. Bernard Director since 1992 Executive Committee Compensation Committee (chair) Mr. Bernard, age 63, was chief of finance, administration and operations of Morgan Stanley & Co., Inc. from 1985 until his retirement in 1991. Mr. Bernard joined Morgan Stanley in 1963. Mr. Bernard is chairman of Classroom, Inc., a non-profit educational corporation. He is also chairman of the board of the American Museum of Natural History and a trustee of The Andrew W. Mellon Foundation. 7 [PHOTO OMITTED] Zachary W. Carter Director since 2004 Audit Committee Mr. Carter, age 55, is a partner at the law firm of Dorsey & Whitney LLP, where he is co-chair of the White Collar Crime and Civil Fraud practice group. He joined Dorsey & Whitney in 1999. Mr. Carter was the United States Attorney for the Eastern District of New York from 1993 to 1999. Mr. Carter is chairman of the Mayor's Advisory Committee on the Judiciary, chairman of the board of directors of Hale House Center, Inc. and a trustee of the New York University School of Law and the Vera Institute of Justice. [PHOTO OMITTED] Robert F. Erburu Director since 1996 Compensation Committee Directors & Governance Committee (chair) Mr. Erburu, age 74, is non-executive chairman of MMC's board of directors. Mr. Erburu was chairman of The Times Mirror Company from 1986 until his retirement in 1996. Mr. Erburu joined Times Mirror in 1961 and was its chief executive officer from 1981 to 1995. Mr. Erburu is chairman of the board of trustees of the National Gallery of Art and chairman of the Board of Councilors of the College of Letters, Arts and Science of the University of Southern California. He is a director of the Pacific Council on International Policy, the Ahmanson Foundation and the William and Flora Hewlett Foundation. [PHOTO OMITTED] Oscar Fanjul Director since 2001 Audit Committee Compensation Committee Mr. Fanjul, age 55, is vice chairman and chief executive officer of Omega Capital, a private investment firm in Spain. Mr. Fanjul is honorary chairman of Repsol YPF, where he was chairman and chief executive officer from its inception in 1986 until 1996. He was chairman of Hidroelectrica del Cantabrico from 1999 to 2001 and chairman of NH Hoteles from 1997 until 1999. Mr. Fanjul is a director of Acerinox, the London Stock Exchange, Unilever and a member of MMC's international advisory board. He is a trustee of the International Accounting Standards Committee Foundation and the Amigos del Museo del Prado. 8 Information Regarding the Board of Directors MMC is a global professional services company. Our business is conducted by our business units, and their employees and officers, under the direction of the chief executive officer and the oversight of the board. The board of directors, which is elected by the stockholders, is the ultimate decision-making body of MMC except with respect to those matters reserved to the stockholders. The board held 18 meetings during 2004. On March 17, 2005, the board of directors named Robert F. Erburu non-executive chairman of the board. Corporate Governance Guidelines Our board of directors has adopted the MMC Guidelines for Corporate Governance. These guidelines are posted on the MMC website at http://www.mmc.com/corpgov.html and a print copy is available to any stockholder upon request. With respect to our directors: o a meaningful portion of the compensation for independent directors is paid in MMC stock; o all new directors participate in an orientation. This orientation includes background material and presentations by management on MMC's operations and strategic plans, its financial statements and its key policies and practices; o in addition to access to MMC officers, the board and its committees have the authority to obtain advice and assistance from external advisors or consultants as they may deem necessary; and o the independent directors meet at regularly scheduled executive sessions without management, at which meetings MMC's non-executive chairman, Robert F. Erburu, presides. Director Independence It is the policy of MMC that a substantial majority of the members of its board of directors be independent of MMC's management. For a director to be deemed "independent," the board must affirmatively determine that the director has no direct or indirect material relationship with MMC. To assist the board in determining director independence the board has adopted categorical standards, which include the standards established by the New York Stock Exchange, as amended from time to time. Under these standards, a director will not be deemed "independent" if: (a) within the preceding three years, the director was employed by MMC or a member of his or her immediate family was employed by MMC as an executive officer; (b) within the preceding three years, the director, or a member of his or her immediate family, received more than $100,000 during any 12 month period in direct compensation from MMC (other than director and committee fees and pension or certain other forms of deferred compensation); (c) (i) the director or an immediate family member is a current partner of a firm that is MMC's internal or external auditor; (ii) the director is a current employee of such a firm; (iii) the director has an immediate family member who is a current employee of such a firm and who participates in the firm's audit, assurance or tax compliance (but not tax planning) practice; or (iv) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on MMC's audit within that time; (d) within the preceding three years, a current MMC executive officer was on the compensation committee of a company which concurrently employed the director as an executive officer, or which employed an immediate family member of the director as an executive officer; (e) the director is a current executive officer or employee, or the director's immediate family member is a current executive officer, of a company that made payments to, or received payments from, MMC for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of such company's consolidated gross revenues; or (f) the director serves as an executive officer, director or trustee of a charitable organiza- 9 tion to which MMC's charitable contributions (other than matching contributions) in single fiscal year during the preceding three years exceeded the greater of $1 million or 2% of such organization's consolidated gross revenues in a particular fiscal year. With respect to items (a) through (f) above, the term "MMC" includes any subsidiaries within MMC's consolidated reporting group. The term "immediate family" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person's home. In addition, the board has considered and determined that the following commercial relationships do not impair a director's independence: o a director's ownership interest in MMC stock, Putnam mutual funds or the private equity funds managed by MMC Capital; o a director's use of any of the services provided by MMC's subsidiaries in the ordinary course of the subsidiaries' business (e.g., personal insurance placements and any other services); and o a director's service as a member of the board of other public and private companies. In accordance with these guidelines, the board has determined that the following directors are independent: Mr. Bernard; Mr. Carter; Mr. Erburu; Mr. Fanjul; Mr. Hardis; Ms. King; Lord Lang; Mr. Olsen; Mr. Schapiro and Ms. Simmons. Committees Our board has established an Executive Committee, an Audit Committee, a Compensation Committee and a Directors & Governance Committee to assist the board in discharging its responsibilities. Following each committee meeting the respective committee chair generally reports the highlights of the meeting to the full board. Membership on each of the Audit, Compensation, and Directors & Governance Committees is limited to independent directors. The charters for these committees can be viewed on our website at http://www.mmc.com/corpgov.html. Print copies are available to any stockholder upon request. In addition, MMC's Audit Committee charter is attached to this proxy statement as Appendix A. The Executive Committee: o is empowered to act for the full board in intervals between board meetings, with the exception of certain matters that under Delaware law or MMC's by-laws may not be delegated; and o meets as necessary, with all actions taken by the committee reported at the next board meeting. The current members of the Executive Committee are Messrs. Bernard, Hardis, Lord Lang and Ms. Simmons. The committee held one meeting during 2004. The Audit Committee: The Audit Committee is charged with assisting the board in fulfilling its oversight responsibilities with respect to: o the integrity of MMC's financial statements; o the qualifications, independence and performance of MMC's independent auditors; o the performance of MMC's internal audit function; and o compliance by MMC with legal and regulatory requirements. The Audit Committee selects and oversees MMC's independent auditors, and pre-approves all services to be performed by the independent auditors pursuant to the Audit Committee pre-approval policy. The current members of the Audit Committee are Messrs. Carter, Fanjul, Hardis (Chair), Olsen, Ms. King and Ms. Simmons. All members of the Audit Committee are independent as required by MMC and the listing standards of the New York Stock Exchange. All members of the Audit Committee are financially literate, as determined by the board of directors. The board of directors has determined that Stephen R. Hardis, an independent director and the chair of the Audit Committee, has the requisite qualifications to satisfy the SEC definition of "audit committee financial expert". 10 The Audit Committee held ten meetings during 2004. The Compensation Committee: o among other things, evaluates the performance and determines the compensation of MMC's chief executive officer; o reviews and approves the compensation of other senior executives; and o makes recommendations to the board with respect to MMC's incentive compensation plans and equity-based plans and discharges the respon- sibilities of the committee set forth in these plans. The current members of the Compensation Committee are Messrs. Bernard (Chair), Erburu, Fanjul, Schapiro and Lord Lang. All members of the Compensation Committee are independent as required by MMC and the listing standards of the New York Stock Exchange. The Compensation Committee held ten meetings during 2004. The Directors & Governance Committee: o among other things, develops, reviews and periodically reassesses MMC's corporate governance principles and recommends proposed changes to the board; o identifies, considers and recommends qualified candidates to the board for election as directors, including the slate of directors that the board proposes for election at the annual meeting; o in consultation with the board committee chairs, recommends committee assignments to the board; and o develops processes for and oversees annual assessments of the board's performance and effectiveness. The current members of the Directors & Governance Committee are Mr. Erburu (Chair), Lord Lang, Ms. King and Mr. Schapiro. All members of the committee are independent as required by MMC and the listing standards of the New York Stock Exchange. The Directors & Governance Committee held three meetings in 2004. Policy on Stockholder Nominations of Directors The Directors & Governance Committee, as a policy, gives equal consideration to all director nominees whether recommended by our stockholders, management or current directors. The Directors and Governance Committee has determined that, at this time, 10-14 directors is the appropriate size for the board and that this range is flexible enough to accommodate the availability of any outstanding candidate. The quality of the individuals serving is more important than the precise number of members, and these considerations could lead to a board of directors outside this range from time to time. All directors represent the interests of all stockholders, not just the interests of any particular stockholder, stockholder group or other constituency. Candidates for the board of directors must be experienced, dedicated, and meet the highest standards of ethics and integrity. The Directors & Governance Committee periodically reviews with the board the requisite skills and characteristics for new directors as well as the composition of the board as a whole, taking into account, among other things, the mix and diversity of skills, backgrounds and experience. A substantial majority of our directors must satisfy the independence requirements of both MMC and the New York Stock Exchange. Each member of the Audit Committee must be financially literate and at least one member must possess the requisite qualifications to satisfy the SEC definition of "audit committee financial expert". Once a candidate is identified, the Directors & Governance Committee will consider the candidate's mix of skills and experience with businesses and other organizations of comparable size, as well as his or her reputation, background and time availability (in light of anticipated needs). The committee will also consider the interplay of the candidate's experience with the experience of other board members, the extent to which the candidate would be a desirable addition to the board and any committees of the board and any other factors it deems appropriate. Stockholders may propose director nominees for consideration by submitting a recommendation in writing to: Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036-2774 Attn: Directors & Governance Committee c/o Mr. William J. White, Assistant Corporate Secretary The Directors & Governance Committee may ask any proposed nominee to provide such information as is reasonably necessary to determine his or her eligibility and qualifications to serve as a director of MMC, including information that relates to a candidate's independence and financial literacy. 11 Depending on the needs of the board, the Directors & Governance Committee may consider director nominees proposed by stockholders at any time throughout the year, but in no event will a nominee be considered later than the next annual meeting of stockholders for which a recommendation was timely received. To be timely received in connection with an annual meeting of stockholders, a recommendation on a proposed director candidate should be sent to us at the above address no later than the December 31st preceding that annual meeting. Attendance The average attendance by directors at meetings of the board and its committees was approximately 93%. All current directors attended at least 75% of the meetings of the board and committees on which they served. Barring unforeseen circumstances, all directors are expected to attend our annual meeting of stockholders. In 2004, all but one of our directors attended the annual stockholders meeting. Codes of Business Conduct and Ethics We have adopted the MMC Code of Business Conduct and Ethics that is applicable to all directors and all employees, including officers, of MMC. This code is posted on the MMC website, www.mmc.com, and a print copy is available to any stockholder upon request. We have also adopted the Code of Ethics for Chief Executive and Senior Financial Officers which applies to our chief executive officer, chief financial officer and controller and which is filed as an exhibit to our 2002 Annual Report on Form 10-K. We intend to disclose amendments to, or waivers from, the Code of Ethics, if any, on our website. Communications with the Board To report any issue relating to the accounting, internal accounting controls or auditing practices of MMC (including its subsidiaries and affiliates), employees, stockholders and others may contact the company by mail or telephone, as described below. Anyone who wishes to send a communication to our non-executive chairman or to the independent directors as a group may also do so by mail or telephone, as follows: By mail to: Marsh & McLennan Companies, Inc. P.O. Box 4974 New York, N.Y. 10185-4974 By telephone to the MMC Compliance & Ethics Line: Canada & the U.S.: 1-800-381-2105 Outside Canada & the U.S., use your country's AT&T Direct(R) service number to reach the MMC Ethics & Compliance Line toll-free. MMC's procedures for handling complaints and concerns of employees and other interested parties are posted on our website at http://www.mmc.com/corpgov.html. Tenure Non-executive directors retire at the annual meeting following their 72nd birthday, unless the person has been a non-executive director for less than ten years. In such cases, non-executive directors retire at the annual meeting following the earlier of ten years of service or attaining age 75. Executive directors resign from the board upon their retirement. Directors' Compensation Directors who are also employees (currently only Mr. Cherkasky) receive no compensation specific to their service as directors. With regard to compensation for the service of our non-executive directors, we paid the following compensation to Messrs. Bernard, Carter, Erburu, Fanjul, Hardis, Olsen, Schapiro, Lord Lang, Ms. King and Ms. Simmons: o a basic retainer of $40,000 per year and an annual stock grant as determined by the Directors & Governance Committee, which was 1,800 shares in 2004 (the "Annual Stock Grant"); o a fee of $1,000 and reimbursement of related expenses for each meeting of the board or a committee they attend; o an additional retainer of $5,000 per year to the chair of each committee; and o an additional retainer of $2,000 per year to other members of committees. We also offer travel accident insurance benefits to non-executive directors in connection with MMC-related business travel. Non-executive directors are eligible to participate in MMC's matching-gift program for certain charitable gifts by employees up to a maximum of $5,000 per year. Under the terms of MMC's Directors Stock Compensation Plan, the non-executive directors receive twenty-five percent of their basic retainer in 12 MMC stock at the fair market value thereof, as well as their Annual Stock Grant, on each June 1. The balance of their compensation (including attendance fees and committee retainers) is paid quarterly in either MMC stock or cash, as the director elects. The non-executive directors may defer receipt of all or a portion of their compensation to be paid in MMC stock until the year following either their retirement from the board or a specified earlier date. Mr. Fanjul serves on MMC's International Advisory Board and is a director of Marsh, S.A., a Spanish subsidiary of MMC, but receives no additional compensation for such service. In 1999, all of MMC's directors were offered the opportunity to invest, on an after tax, out of pocket basis, in a fund that is a limited partner of Trident II, L.P. ("Trident II"), a $1.4 billion private equity fund that was to be managed by MMC Capital, Inc., a subsidiary of MMC. In 1999, Messrs. Bernard and Hardis and Lord Lang committed to invest an aggregate of $2.29 million in this fund. Neither the directors nor the fund through which they invested in Trident II were required to pay the 1.5% management fee or a carried interest performance fee equal to 20% of the profit generated by the fund, subject to the achievement of minimum returns for all the limited partners in Trident II. Such fees, if they had been payable on the same terms in which they were charged to third-party investors, would not have exceeded $30,000 for any of Messrs. Bernard and Hardis and Lord Lang in any of the last three years covered by this proxy statement. See "Transactions with Management and Others; Other Information" below. Stock Ownership of Management and Certain Beneficial Owners The following table reflects the number of shares of our common stock which each director and each named executive officer, as defined below, has reported as owning beneficially or otherwise having a pecuniary interest in, and which all directors and executive officers of MMC have reported as owning beneficially as a group. These stock holdings are as of February 28, 2005, except with respect to interests in MMC's Stock Investment Plan and Stock Investment Supplemental Plan, which are as of December 31, 2004. All of Mr. Greenberg's and Mr. Coster's holdings are as of October 25, 2004, and January 31, 2005, respectively, after which dates they were no longer directors or executive officers of MMC. The table also includes the number of shares of stock beneficially owned by persons known to MMC to own more than 5% of the outstanding shares. The term "named executive officer" refers to MMC's current and former CEO and the four other most highly compensated executive officers of MMC.

(1) This column reflects shares subject to unexercised options granted over the last ten years under MMC's 2000 Senior Executive Incentive and Stock Award Plan, 1997 Senior Executive Incentive and Stock Award Plan, 1992 Incentive and Stock Award Plan, 2000 Employee Incentive and Stock Award Plan and 1997 Employee Incentive and Stock Award Plan. This column contains information regarding stock options only; there are no warrants or stock appreciation rights outstanding. (2) The number of shares that may be issued at the close of current offering periods under stock purchase plans, and the weighted-average exercise price of such shares, is uncertain and is consequently not reflected in columns (a) and (b). The number of shares to be purchased will depend on the amount of contributions with interest accumulated under these plans as of the close of the offering periods. The shares remaining available for future issuance in column (c) includes any shares that may be acquired under all current offering periods for these plans. See notes (3) and (4) below. (3) Includes the following: o 28,186,972 shares available for future awards under the 1999 Employee Stock Purchase Plan, a stock purchase plan qualified under Section 423 of the Internal Revenue Code. Employees may acquire shares at a discounted purchase price on four quarterly purchase dates within the one-year offering period with the proceeds of their contributions plus interest accumulated during the respective quarter. The purchase price may be no less than 85% of the market price of the stock on the purchase date. o 3,774,881 shares that may be issued to settle outstanding restricted stock unit, deferred stock unit and deferred bonus unit awards and other deferred compensation obligations. o 9,198,404 shares available for future awards under the 2000 Senior Executive Incentive and Stock Award Plan. Awards may consist of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, deferred bonus units, dividend equivalents, stock bonus, performance awards and other unit-based or stock-based awards. o 3,183,741 shares available for future deferrals directed into share units under the Stock Investment Supplemental Plan, a nonqualified deferred compensation plan providing benefits to employees whose benefits are limited under the tax-qualified Stock Investment Plan, an employee stock ownership plan with a 401(k) feature. o 1,003,562 shares available for future awards under the Directors Stock Compensation Plan. Awards may consist of shares, deferred stock units and dividend equivalents. (4) Includes the following: o 11,311,995 shares available for future awards under the Stock Purchase Plan for International Employees, Stock Purchase Plan for French Employees, Save as You Earn Plan (U.K.), and Irish Savings Related Share Option Scheme 2001. o 10,398,783 shares that may be issued to settle outstanding restricted stock unit, deferred stock unit and deferred bonus unit awards under the 2000 Employee Incentive and Stock Award Plan and predecessor plans and programs. B-1 o 32,270,144 shares available for future awards under the 2000 Employee Incentive and Stock Award Plan. Awards may consist of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, deferred bonus units, dividend equivalents, stock bonus, performance awards and other unit-based or stock-based awards. o 148,810 shares available for future awards under the Approved Share Participation Schemes for employees in Ireland. Awards are made in shares of stock. o 1,835,327 shares available for future awards, and 316,480 shares that may be issued to settle outstanding awards, under the Special Severance Pay Plan. Awards consist of stock units and dividend equivalents. (5) MMC's Board of Directors has authorized the repurchase of common stock, including an ongoing authorization to repurchase shares in connection with awards granted under equity-based compensation plans, subject to market conditions and other factors. Pursuant to that authorization, MMC repurchased 11.4 million shares in 2004. The material features of MMC's compensation plans that have not been approved by stockholders and under which MMC shares are authorized for issuance are described below. Any such material plans under which awards in MMC shares may currently be granted are included as exhibits to this report. o Stock Purchase Plan for International Employees, Stock Purchase Plan for French Employees, Save As You Earn Plan (U.K.) and Irish Savings Related Share Option Scheme. Eligible employees may elect to contribute to these plans through regular payroll deductions over an offering period which varies by plan from 1 to 5 years. On each purchase date, generally the end of the offering period, participants may receive their contributions plus interest in cash or use that amount to acquire shares of stock at a discounted purchase price. Under the International Plan, the purchase price may be no less than 85% of the market price of the stock on each of four quarterly purchase dates within the one-year offering period. Under the French Plan, the purchase price may be no less than 85% of the market price of the stock at the end of the offering period. Under the U.K. and Irish Plans, the purchase price may be no less than 80% of the market price of the stock at the beginning of the offering period. o 2000 Employee Incentive and Stock Award Plan and predecessor plans and programs. The terms of this plan and the 1997 Employee Incentive and Stock Award Plan are described in Note 8 to the Consolidated Financial Statements included under Item 8 of MMC's 2004 Annual Report on Form 10-K. In addition, the Stock Bonus Award Program provided for the payment of up to 50% of annual bonuses otherwise payable in cash, in the form of deferred stock units or deferred bonus units which are settled in shares. No future awards may be granted under any predecessor plan or program. o Approved Share Participation Schemes for Employees in Ireland. Eligible participants may elect to acquire shares of stock at market price by allocating their bonus and up to an equivalent amount of their basic salary. The acquired shares are held in trust and generally may not be transferred for two years following their acquisition. The initial value of any shares held in trust for more than three years is not subject to income tax. o Special Severance Pay Plan. Under this plan, certain holders of restricted stock or awards in lieu of restricted stock with at least 10 years of service will receive payment in shares upon forfeiture of their award if their employment with MMC or one of its subsidiaries terminates. The amount of such payment is based on years of service, with the individual receiving up to a maximum of 90% of the value of the restricted shares after 25 years of service and is subject to execution of a non-solicitation agreement. B-2 [GRAPHIC OMITTED] Marsh o Putnam o Mercer Marsh & McLennan Companies Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, NY 10036-2774 www.mmc.com MARSH & McLENNAN COMPANIES, INC. C/O PROXY SERVICES P.O. BOX 9162 FARMINGDALE, NY 11735 VOTE BY TELEPHONE OR INTERNET OR MAIL 24 HOURS A DAY -- 7 DAYS A WEEK IT'S FAST AND CONVENIENT VOTE BY INTERNET - www.proxvvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by Marsh & McLennan Companies, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Marsh & McLennan Companies, Inc., c/o Proxy Services. P.O. Box 9162, Farmingdale, NY 11735. PLEASE RETURN THIS CARD PROMPTLY USING THE ACCOMPANYING ENVELOPE TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS -------------------------------------------------------------------------------- DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. ================================================================================ MARSH & McLENNAN COMPANIES, INC. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED NOMINEES. Item 1. Election of Directors Nominees:

Please indicate if you plan to attend this meeting. If you Yes No are voting by telephone, in order to select the option to attend the meeting you must select option #2 (vote on directors and proposals individually) on the telephone prompt. [_] [_] HOUSEHOLDING ELECTION - Please indicate if you consent to receive certain future investor communications in a single package per household [_] [_] ---------------------------------------------------------- | ========================================================== Signature [PLEASE SIGN WITHIN BOX] Date ---------------------------------------------------------- | ========================================================== Signature (Joint Owners) Date Your telephone or Internet vote authorizes the named proxies to vote the shares in the same manner as if you marked, signed and returned your Proxy Form. If you have submitted your proxy by telephone or the Internet there is no need for you to mail back your Proxy Form. ================================================================================ PROXY PROXY MARSH & McLENNAN COMPANIES, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE 2005 ANNUAL MEETING FOR ALL STOCKHOLDERS The undersigned hereby appoints Michael G. Cherkasky and Peter J. Beshar proxies (each with power to act alone and with the power of substitution) of the undersigned to vote all shares which the undersigned would be entitled to vote at the Annual Meeting of Stockholders of Marsh & McLennan Companies, Inc. to be held on Thursday, May 19, 2005 at 10:00 a.m. (New York City time) in the auditorium, 2nd Floor, 1221 Avenue of the Americas, New York, New York and at any adjournment thereof. FOR STOCKHOLDERS WHO ARE ALSO PARTICIPANTS IN MARSH & McLENNAN COMPANIES STOCK INVESTMENT PLAN AND THE PUTNAM INVESTMENTS PROFIT SHARING RETIREMENT PLAN: This card also constitutes the confidential voting instructions of the participants in the Marsh & McLennan Companies Stock Investment Plan and The Putnam Investments Profit Sharing Retirement Plan. By signing and returning this card, the undersigned directs the Trustees under each Plan to vote in person or by proxy all shares of stock of Marsh & McLennan Companies, Inc. (the "Company") allocated to the undersigned under said Plans upon all matters at the Annual Meeting of Stockholders of the Company on May 19, 2005 and at any adjournment thereof. Provided this card is received by May 13, 2005, voting rights will be exercised by the Trustees as directed or, if not specifically directed, FOR items 1, 2 and 3 and AGAINST items 4, 5 and 6 and, in their discretion, upon any other matters that may properly come before the meeting or any postponement thereof. Under the Plans, the Trustees shall vote all other shares in the same proportion as those shares for which it has received a signed instruction card. Participants in these plans cannot vote at the meeting and may only vote these shares as provided in this paragraph. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTIONS ARE MADE, THEY WILL BE VOTED FOR ITEMS 1, 2 AND 3 AND AGAINST ITEMS 4, 5 AND 6. IN THEIR DISCRETION THE PROXY HOLDERS ARE AUTHORIZED TO VOTE UPON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT THEREOF. +------------------------------------------------------------------------------+ | Comments: | | ----------------------------------------------------------------- | | | | -------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------- | | | -------------------------------------------------------------------------------- (If you noted any Comments above, please mark corresponding box on the reverse side.) ================================================================================