Ladies and gentlemen, my name is William Connelly, and I am the Chair of the Board of Directors at Aegon Limited. I will chair today's general meeting. On behalf of Aegon, I welcome you to Aegon's 2024 Annual General Meeting of Shareholders. I hereby open this meeting. I hereby appoint Bieke de Bruijn, Company Secretary of Aegon Limited, as Secretary of this general meeting. This is our first meeting since the redomiciliation to Bermuda, and I am pleased to welcome our shareholders here in Bermuda and those who are participating virtually through a live webcast. Let me introduce the people present with me at the table. Dona Young, Chair of the Compensation and Human Resource Committee, Lard Friese, Executive Director and CEO, Matt Rider, CFO, and Bieke de Bruijn.
The other meeting members of the Board of Directors, as well as the director nominee, Albert Benchimol, are present here in the room. Also present here today are Onno van Klinken, our General Counsel, Sonja Nauta, the Principal Representative of the company, Yves Cormier, Head of Investor Relations, Brad Adderley, partner of our legal counsel in Bermuda, Appleby, and Rogier van Adrichem, partner of our independent auditor, PwC. The other members of the executive committee are following the AGM through the live webcast. Before we continue, I would like to make a few remarks. This meeting will be chaired in English. Shareholders have been registered, who have been registered through the e-voting portal prior to the start of the meeting, and participating in a virtual manner, have been directed automatically to the Lumi environment, in which they can vote and ask questions.
To accommodate live voting and keeping in mind the short delay in the webcast, the voting is now open and will remain open until the last voting item on the agenda. The voting results will therefore be shown at the end of the meeting. For our shareholders present here in person, if you would like to speak, please raise your hand, and you'll be given a microphone. Please make sure you clearly state your name before asking a question, so we can reflect that in the minutes. For voting, please note that you can already use the link to the Lumi webpage. In case you experience any difficulties, please notify our staff. Upon registration, you have received a voting card. This card would only be used if the voting webpage does not work due to technical issues.
To ensure constructive dialogue with all our shareholders, we have enabled a chat function as well, as well as a video connection in the Lumi environment. This allows shareholders participating virtually to ask questions during the meeting. I have appointed our Head of Investor Relations, Yves Cormier, to moderate the questions that will come through the chat function of the Lumi system. Shareholders who wish to ask their questions through the video connection during the meeting, you'll be directed to the meeting by an operator. I will explain the process, how to address the meeting via the video connection shortly. Then, I hereby establish the following. This meeting was convened in accordance with the required formalities.
The agenda, with explanatory notes and further meeting documents, were published on Aegon's corporate website on May 8th, 2024, and our shareholders of record have been informed hereof in accordance with Aegon's bylaws and the Companies Act of Bermuda. The meeting documentation was also made available for review at Aegon's head office in the Netherlands and its registered office in Bermuda. Prior to this meeting, our shareholders have also been able to cast their votes, either by granting a proxy or by using the e-voting system. I note that no shareholders have proposed to put additional items on the agenda of the present meeting. The minutes of today's meetings will be kept in English by the secretary of this meeting. They will be made available both at Aegon's head office in the Netherlands and its registered office in Bermuda, as well as on Aegon's corporate website.
The final minutes of the 2023 Annual General Meeting of Shareholders, held on May 25, 2023, and the final minutes of the Extraordinary General Meeting of Shareholders, held September 29, 2023, have been made available as of November 23, 2023, and March 29, 2024, respectively, both at our head office in the Netherlands and on Aegon's corporate website. The minutes of the Extraordinary General Meeting of Shareholders, held in Luxembourg on September 30, 2023, have been established by Luxembourg Notary and have been made available on the Luxembourg Trade and Companies Register.
The attendance list of this meeting is currently being drawn up, and we will come back to this later. I wish you all a good and interesting meeting. We will now move to agenda item 2, the Annual Report and Annual Accounts 2023. Lard Friese, Aegon CEO, will give a presentation on the course of business in 2023, including the financial results. The company's 2023 annual accounts have been approved by the Board of Directors and are presented for information purposes. Lard, the floor is yours.
Thank you, Bill. Thank you, Bill, and welcome to all shareholders joining us today at our first AGM in Bermuda, a tangible change for our shareholders attending this meeting, both in person and virtually. In 2020, we embarked the company on a transformation journey to transform Aegon into a more focused company with better operational performance, a stronger balance sheet, and an enhanced risk profile. Thanks to the hard work and dedication of our colleagues, we have exceeded the targets that we set ourselves three years ago. I'm very proud of the progress we've made in increasing our strategic focus, improving Aegon's performance, and restructuring the group.
As one chapter closes, another one opens, and at our Capital Markets Day in London in 2023, we outlined the next steps in our journey to create leading businesses in investment protection and retirement solutions. Our strategic efforts have left us with an attractive set of businesses. Our fully owned activities are in established large markets where the dynamics favor us. Demographic changes and evolving regulations mean that our customers need to save more, not less. Additionally, governments are shifting long-term savings and retirement planning responsibilities to households and individuals. We have strong market positions and clear competitive advantages to benefit from these trends. For example, in the United States, we are building America's leading middle market life insurance and retirement company. In the United Kingdom, the international division and asset management, our focus is on driving improvement and value. Our partnerships are crucial.
They provide unique access to growing, under-penetrated markets and are strong franchises in their own right. Aegon brings value to these partnerships through our capital, expertise, and experience. In the Netherlands, we determined that the best way to create value was to form a market leader through a combination with a.s.r., where we hold a strategic 29.99% stake. We intend to maintain this stake until the a.s.r. share price reflects the intrinsic value, unless value-creating opportunities present themselves. Zooming in a little bit further on our strategy for the United States, I would like to share with you why we are confident about Transamerica's future. The U.S. middle market is our sweet spot. The U.S. middle class is large, underserved, and offers significant growth potential. Companies that successfully reach these consumers achieve higher returns than the overall industry.
Transamerica is uniquely positioned to serve this diverse and geographically spread group effectively. We have strong market positions, a strong brand, and advantaged access points to customers through the WFG franchise with 75,000 agents in our retirement plan business. Our ambition is to build America's leading middle market life insurance and retirement company. Over the next three years, we will increase both the level and the quality of capital generation from strategic assets while reducing our exposure to financial assets. We have detailed bottom-up plans to further improve our competitive position and attractive financial ambitions. The aim for financial assets is to create shareholder value by reducing risk and releasing capital. Since our Capital Markets Day in 2020, we have made steady progress in reducing the capital employed in our financial assets, mainly by improving our risk profile.
We have added our universal life and single premium group annuity businesses to the scope of the financial assets to increase our focus on reducing these blocks of business. Without further management actions, the capital employed in our financial assets would gradually reduce by around $600 million through 2027. That is not enough. We have identified new unilateral and bilateral management actions to accelerate this process. We now expect to reduce the capital employed in financial assets by an additional $1.2 billion over time, and we will continue to explore further reductions. Please note that the capital release from these management actions creates financial flexibility to potentially reduce exposure to financial assets even more. Last year, Aegon in the United Kingdom extended its partnership with Nationwide Building Society and will onboard Nationwide's advisory businesses early next year.
This supports Aegon U.K.'s strategy to be the leading digital platform provider in the workplace and retail markets, driving forward our pension and investment propositions. I want to remind you that we will be hosting a teach-in webinar on our U.K. businesses on June 25th, during which we will highlight our plans. This past year, we maintained a high pace in transforming Aegon and sharpening our strategic focus. The transaction with a.s.r. has been closed, and we initiated the asset management partnership with a.s.r. As the new combination progresses, we expect significant synergies to benefit our shareholders. Following this transaction, we have launched a EUR 1.5 billion share buyback program, which is now 95% complete as per June 7th. An additional EUR 200 million share buyback program was also announced on May 16th.
In Brazil, we have increased our economic ownership stake in the life insurance joint venture, Mongeral Aegon Group, from 55% to 59%, strengthening our position to benefit from market growth. Aegon Asset Management and La Banque Postale have extended their partnership in the asset manager, La Banque Postale Asset Management, through 2035. We have participated in capital raising for La Banque Postale's asset management acquisition of La Financière de l'Echiquier, a French asset manager, consolidating La Banque Postale's asset management strong market position. We also made significant strides in exiting subscale or niche positions. We have closed the sale of our remaining Central and Eastern European businesses, and we announced the sale of our stake in the India business.
Now, let's talk about one of the milestones that we achieved last year and that has brought us to this year's AGM location, the completed re-domiciliation to Bermuda. For the first time, we are holding our AGM not in The Hague, but as a hybrid event with a physical presence here in Bermuda. In September 2023, we officially moved our legal seat to Bermuda and our group supervision to the Bermuda Monetary Authority, following the approvals received at the EGMs last September. This change was driven by the closing of the a.s.r. transaction, which meant Aegon would no longer have a regulated insurance business in the Netherlands. After consulting the members of our College of Supervisors, the Bermudian regulator, the Bermuda Monetary Authority, informed us it would become Aegon's group supervisor upon our legal seat transfer to Bermuda.
This was a logical decision, considering the major shift in Aegon Group's geographical footprint. While Aegon retains part of its global asset management activities in the Netherlands and holds a stake in a.s.r., over 99% of our business activities are now outside the European Union and not subject to the European Union Solvency II regime. We believe that moving our legal seats to Bermuda was the best path forward for Aegon Group and our businesses for several reasons. Aegon has been active in Bermuda for a long time, and the Bermuda Monetary Authority, the BMA, has been our regulator and part of our College of Supervisors for many years. Bermuda's established, well-regarded regulatory regime has experience in regulating international insurance groups.
The regime has been granted equivalency status by both the European Union and the U.K., and has been designated as a qualified and reciprocal jurisdiction by the NAIC in the United States. Most importantly, Aegon has agreed on transitional arrangements with the BMA, providing stockholders with stability in our capital management framework. The transfer of the legal seat to Bermuda allows Aegon to maintain its headquarters in the Netherlands, where we have the talent and the experience to manage an international company. This also means we can keep our listings on Euronext Amsterdam and the New York Stock Exchange, bringing stability to our stockholders and remain a Dutch tax resident. This wraps up the strategic milestones of 2023. Now, let's touch on our financial milestones for the year.
In 2023, Aegon maintained commercial momentum, driven by the strong performance of our U.S. business, Transamerica, as well as our U.K. workplace business and our joint venture in Brazil. At our Capital Markets Day last June, we announced Transamerica's strategy to become America's leading middle-market life insurance and retirement company. In 2023, Transamerica delivered a strong performance. The Individual Solutions business generated new life sales of $486 million, an increase of 13% with the prior year, marking the highest sales level in the past 8 years. The number of agents at World Financial Group grew by 18% compared with a year earlier, reaching nearly 74,000.
Written sales of mid-size plans for our Workplace Solutions business amounted to EUR 6.7 billion, an increase of 72% compared with the prior year, driven by growth in both single employer plans and pooled plans. We also continued to actively manage our financial assets, including actions to reduce Transamerica's capital ratio, exposure to equity market movements. Our U.K. workplace platform also performed well. Despite the loss of a large, low-margin pension scheme in the third quarter, we reported positive net inflows for 2023, and expect continued net inflows from onboarding new schemes and higher net deposits on existing schemes. Conversely, both Aegon U.K. retail platform and the asset management business experienced net outflows due to the challenging macroeconomic environment in 2023.
In our international business unit, new life sales were up 18% to EUR 293 million compared to the prior year, primarily driven by growth in Brazil and China. Now, looking a little closer at the numbers, we see that in 2023, we had strong operating capital generation, reaching EUR 1.3 billion, which exceeded our guidance. This was thanks to solid business growth and some favorable one-time items. Looking ahead to 2024, we expect higher new business strain due to the growth of our U.S. strategic assets, and we anticipate operating capital generation to be around EUR 1.1 billion, keeping us on track to meet our target of about EUR 1.2 billion in 2025.
In the fourth quarter of 2023, we redeemed a maturing senior bond, which brought our gross financial leverage down to EUR 5.1 billion. This means we've achieved our goal of having a leverage position of around EUR 5 billion. Free cash flow for 2023 was EUR 715 million, surpassing our guidance. This included EUR 123 million of remittances from our Chinese asset management joint venture and a significant portion of which were special remittances reflecting performance in previous years. As we mentioned during our last Capital Markets Day, we expect free cash flow in 2024 to exceed EUR 700 million, driven by sustainable growth in operating capital generation. Finally, we are proposing a final dividend of EUR 0.16 per common share.
Subject to approval of today's general meeting, this will bring the full year 2023 dividend to EUR 0.30 per common share, as we had guided. We are confident that we can grow the dividend to our target of EUR 0.40 per share by 2025. In summary, we are well on track to achieve our 2025 financial targets. In addition to our financial achievements, I am encouraged to share that we have made progress on our 2025 sustainability targets. As part of our purpose to help people live their best lives, we see it as our responsibility to help contribute to a more sustainable and equitable, equitable world. To help support this, Aegon has committed to transition its general account investment portfolio to net zero greenhouse gas emissions by 2050.
Aegon Limited is a signatory of the Net Zero Asset Owner Alliance. We have set intermediate targets to drive progress toward our 2050 commitment, and as shown on this slide, we've already reached most of these targets and are on track to achieve the remaining ones. With 2025 just around the corner, we are currently updating these targets and will communicate them once finalized to continue our net zero journey. Reflecting on 2023, I am incredibly proud of everything our teams have achieved, and I'm very, very grateful for their hard work and steady progress during another transformational year. We will continue to diligently execute our strategy in 2024, and deliver on our financial commitments.
Our strong commercial performance, along with the crucial steps taken to realign our company, has provided us with a solid foundation for sustainable growth in our dividend per share. I also look forward to continuing our sustainability journey with new targets to be announced on the way towards our net zero goal. We also eagerly anticipate presenting the strategy for our U.K. business in more depth during the teach-in session in two weeks' time, on June 25th, and we kindly invite you to virtually attend the event, which can be accessed through our website on that day. I wanna thank you very much for your time and attention, and back to you, Bill.
Thank you, Lard. I would now like to invite Rogier van Adrichem, our independent auditor from PwC, to make a few comments on the auditor's report of PwC. Please note that Aegon has released PwC from the obligation to observe confidentiality, to allow them to comment on the audit of, and the auditor's report on, the financial statements of Aegon Limited. Rogier, the floor is yours.
Thank you, Chairman. Dear shareholders, let me provide you with my insights into our 2023 audit of Aegon's financial statements. 2023 was a challenging year, with the closing of the transaction to combine the business of Aegon, the Netherlands, with a.s.r., the domiciliation of the legal seat to Bermuda, and the first year of IFRS 17. While the transaction with a.s.r., as well as the first year of IFRS 17, are described in our key audit matters. Before I turn to our key audit matters, let me first start with the outcome of the audit. We issued an unqualified, clean audit opinion on the consolidated financial statements, dated April 3rd. Then the key audit matters.
Well, key audit matters often include critical accounting estimates and management judgment, and we identified two key audit matters, being the valuation and accounting of the 29.99% stake in a.s.r. In that one, I mean, the accounting evaluation of the stake in a.s.r involves significant judgment over the fair value of assets and liabilities and the identification and valuation of acquisition-related intangibles. This stake in a.s.r. is valued against its equity value, in line with IAS 28, which is different from the share price of a.s.r. Based on our audit work performed, we found management's assumptions and estimates of the fair value of the assets and liabilities as part of the acquisition consistent, reasonable, and in line with our own expectations. The second key audit matter, and that's around the valuation of certain assets and liabilities arising from insurance contracts.
Well, as from January 1st, 2023, IFRS 17 became effective for the annual reporting of the group. For IFRS 17, the measurement of the insurance contracts is primarily performed, applying a model that estimates the present value of future best estimate cash flows that will arise as the contracts are fulfilled, which includes an explicit risk adjustment and a contractual service margin reflecting unearned profits. The non-economical key assumptions used in measuring the liabilities for insurance contracts relate to mortality, morbidity, future expenses, surrender, lapse, and utilization rates, and a change in one of these assumptions could have a significant effect on the contractual service margin and/or the best estimate of liabilities.
Now, we involved our actuarial and valuation specialists to test the models, the process, the inputs, and the key assumptions, and we concluded that the valuation are within a range we consider acceptable based on our own industry experience. Well-balanced was our point in the range. Then let me highlight a few things around the internal controls around financial reporting. So we have audited Aegon's internal controls over financial reporting as of the end of December 2023, and in our opinion, Aegon maintained, in all material respects, effective internal controls over financial reporting as of that date. We did not notice any material weaknesses in Aegon's control environment around financial reporting. But throughout the industry, we do notice that IFRS 17 has significantly altered the landscape of financial reporting, resulting in large-scale changes to reporting processes, systems, and controls.
This has resulted in significant pressure on a reporting and control environment that is not at historical maturity levels yet. Therefore, we have recommended management to continue focus on building out stable, repeatable processes and controls, allowing the finance organization to operate in a predictable and agile fashion. Climate risk and the CSRD readiness of Aegon. We considered the impact on the financial statements resulting from the risk of climate change on Aegon's activities limited due to, among others, the relative limited size and nature of the property and casualty portfolio, as well as the fact that the investment portfolio is largely valued at market value. In respect to the CSRD readiness, we noticed that Aegon is on the right track to be able to report over 2024 the required information.
A double materiality assessment has been performed, and potential data gaps are identified and worked on. While Aegon is not yet CSRD compliant, we do see the good progress it's making to be compliant for the year 2024. Then the last topics I would like to highlight are around the risk of fraud, going concern, and our interaction with management. So we identified a potential fraud risk as potential fraud risk, the risk of management override of controls, as well as the risk of fraud in revenue recognition. Based on our audit work done, we did not notice any indications of fraud potentially resulting in material misstatements. In respect to the assumption that the group is a going concern, that it will continue its operation for the foreseeable future, we reviewed management going concern assessment and whether it includes all relevant information.
We evaluated the adequacy of the solvency positions and the free cash flows, and we evaluated the stress testing of liquidity and capital requirements. These procedures performed didn't result in outcomes contradicting management assumptions and judgment. Then around interaction with management. Well, while we have not performed any audit work on the culture of Aegon, I would like to give you some insights around our interaction with management. We interact with the financial reporting group on a weekly basis throughout the year, and more frequently during the quarters, the interim, and year-end. My team and I met regularly with risk and control groups, and with internal audit, at least on a monthly basis. These interactions were very open, professional, and proactive in nature. I also participated in all Audit Committee meetings and noticed an appropriate level of discussion and constructive challenge.
In addition, I had regular engagement throughout the year with Lard Friese, with Matt Rider, with Bill Connelly, and Jack McGarry, as well as with other members of the boards. I would describe those discussions as open, professional, and they are generally interested in our impressions, observations, and feedback. When issues arise, management is proactive about reaching out to me right away to consider potential implications to the financial reporting. With that, I would like to thank you very much for your attention, and I'm pleased to take any questions relating to our audit of these financial statements. But before that, I would like now to hand it back to Mr. Chairman.
Thank you, Rogier. Before we address your questions, I would like to add, or I would like to invite Bieke de Bruijn to invite you, to inform you about the attendance list of this meeting. Bieke?
Thank you, Bill. On the record date, being May 15, 2024, 1,631,345,302 common shares were an issue and outstanding, and 9,545,345 common shares B were an issue and outstanding. There are 8 holders of common shares and common shares B present in this meeting. They represent, together with shareholders who have voted through e-voting or via proxy voting, a total of 1,200,542,726 votes. This number represents 73.16% of the voting shares and of the issued and outstanding capital as at registration date for this meeting. Thank you.
Thank you, Bieke. I hereby establish that with the total number of shares validly represented at the meeting, the quorum requirements have been fulfilled and that we can proceed with the meeting. We will now address your questions regarding agenda items 2.1 and 2.2. We will first answer the questions from our shareholders present here in the room. Thereafter, we will address questions from our shareholders participating virtually, who would like to ask questions through the video connection. Lastly, we will address the questions that come through the chat function. These shareholders can already enter their questions so that we can address them immediately after having answered the question from all shareholders here in the room, and the shareholders who will ask their questions via the video connection.
Since this is the first time we're using the video feature, let me briefly explain how this works. First of all, make sure you have turned off any video platform such as Zoom or Microsoft Teams. If you wish to address the meeting, please select the Request to Speak button that appears in the broadcast panel. You may need to allow permission to use the microphone and the camera from your web browser. First, click on the live stream image to unmute it. This will allow you to continue following the live stream until you are brought into, until you are brought into the meeting. You do not have to worry, others cannot hear you until you are brought into the meeting. Please check that the correct camera, microphone, and speakers are connected, and click the green check mark to confirm your connection.
You will now be put in the queue until your connection can be checked by the operator before you are brought into the meeting. You'll be brought into the meeting. When you are first in the queue, the operator will connect you into the meeting, and I will welcome you there. Please make sure you unmute your microphone and clearly state your name for the minutes before asking your question. It is important to note that you will be visible for me and the others here at the table, but your picture will not be broadcasted live stream. If you are in the queue, but no longer want to ask a question, you can leave the queue by clicking on the red X.
When you are finished asking your question, simply click on the Return to Broadcast button at the bottom of the Broadcast panel, and you will return to the live stream within the Lumi environment, where you can continue following the meeting. Before we start, may I please remind you that questions should be related to the agenda items. Also, to give all shareholders the opportunity to ask questions, I would like to ask you to limit your number of questions or comments to three at the time. Questions that cannot be answered during the meeting will be answered afterwards. These questions, and the answers thereto, will be added to the minutes. You can ask your questions in Dutch as well, if preferred. Questions asked in Dutch will be answered in English. May I now invite shareholders present here to ask their questions.
Please raise your hand and you will receive a microphone. Clearly state your name for the minutes. If there are no further questions from shareholders in the room, I would like to invite the shareholders participating virtually to ask their questions via the video connection. May I ask the first person in queue to be brought into the meeting? Okay. We'll give everyone a bit of time to make the connection. It's okay. We've got time.
All right. Can you hear me now?
Welcome.
I think it's my turn, Gerben Everts. Can you hear me? Because I don't get, I don't receive any feedback.
Yes, I can hear you. Can you hear us?
Okay, perfect. Oh, yeah, yeah.
Great. Welcome.
Sorry. It's a bit difficult, but, thank you.
First time. It was all for all of us. First time is a bit tricky.
Yeah, I know, but we're there. My name is Gerben Everts. I represent Royal Dutch Shareholders Association, so the Dutch retail investors and nearly 30,000 members. Lard just mentioned that Aegon is well on track. And we indeed recognize that Aegon successfully closed the first transformation chapter after a four-year period. Non-core activities were sold and the balance sheet was de-risked, and this, of course, we welcome. Capital intensive products with volatile earning profiles were replaced by asset light products with smooth, smoother earnings, and that's something we investors like. Nonetheless, a lot of work remains to be done, particularly in the asset management and U.K. businesses. However, the most critical next step is to strengthen, indeed, growth in the U.S., the sweet spot. And history proves that growth is relatively easy in the insurance industry.
The hard part is growing while realizing adequate returns. I therefore have the following three questions. The first one on the asset management business. Here, operating profit fell 25%, in line with last year, also 25%. Now, we are pleased to see in Q1 this year that the net, net deposits increased. And clearly, the asset management activities is still a turnaround story, and the question is whether Aegon is the best owner of the asset management business, considering scale and cost efficiency. And my question: is the turnaround of asset management going according to plan, and what are the complications and the key challenges? And a follow-up question: in 2023, there was a net outflow of third-party businesses on the global platforms due to two large clients leaving. Should investors be worried about this, and should we expect more large clients to leave Aegon?
Then, turning to my second question, Aegon has a long runway for releasing capital from businesses that are capital intensive, such as fixed annuities, and the company has been clear that it will reinvest some of this capital back into the business rather than allocating it back to shareholders. Turning to my question on the capital position, how confident is Aegon that it will find value-attractive, investment opportunities, and in what areas? With undervalued Aegon shares, in our view, shouldn't Aegon invest in its own shares by doing buybacks instead of reinvesting in the business? And if the latter is chosen, so in reinvesting it in the business, due to the rising interest rates and increased cost of capital, analysts use a cost of equity ranging from 12%-16.6% in their valuation models. Does Aegon believe it could make these types of returns on retained capital?
A third question on the World Financial Group, Aegon's distribution network. Aegon's World Financial Group has a prominent place in the strategy. In total, 76,000 WFG agents are selling products in the middle market and focus on historically underserved communities, for instance, families with an immigration background. The number of agents should grow to 110,000 by 2027. We understand the attractiveness of a differentiation strategy, where most peers only focus on the high net worth individuals. This is really the sweet spot largely referred to. Also, there is ample room for growth and returns in this asset light business.
However, having learned the lessons from recent history, also Aegon's history, with unit-linked investment and insurance product scandals and mortgage products sold to underserved communities, especially in the U.S., that led to significant fines in the global financial crisis, this is not a strategy without risk. So my question is, Aegon mentioned that the indexed universal life products sold via WFG have an internal rate of return of more than 12%. This seems to be relatively high. How do you balance the risk between selling a reasonably priced product to consumers versus making an attractive return on investment for shareholders? And we've currently remarked that financial illiteracy might be above average in the WFG client base, leading to a higher risk of mis-selling. So those are my questions. I have a few more, if time allows, but I'll leave it to this, and I'm happy to hear your answer.
Very good. Thank you. Lard?
Yes, Mr. Everts, thank you very much for studying the group so carefully, and for your questions. I will take them one by one, if you don't mind. First, let's talk about the asset management business. Last year was actually a tale of two parts of the year. We saw interest rates shooting up very quickly in the beginning of last year, and you may recall the volatility in the first half of the year. That was quite dramatic, particularly in the U.K. So we saw in the...
We noticed that in the asset management business, as interest rates go up, if you're a fixed income skewed asset manager, your assets under management come down, and since the fees are calculated as basis points over the asset values, you're actually losing revenue at that point in time, and that's what we noticed last year. That gave pressure on the results. Also, we saw net outflows, as you rightly pointed out. The good news is that in Q4, we saw, let's say, the amount of money entrusted to us in the form of mandates from third parties increasing. Also, the a.s.r. relationship started to really take off, and as a result, in Q4 and Q1, we saw a return of net positive flows through our asset manager, and that is quite encouraging.
The first quarter was EUR 2.2 billion in China and EUR 2.6 billion in the other areas. So, you know, in that sense, we're seeing encouraging signs that the growth of our net flows and third-party mandates entrusted to us are actually getting back again. That is good. Now, if you look at the asset manager in more detail, it's actually composed of three components. One is a Chinese joint venture, which is very well-positioned. We co-own it together with Industrial Securities. It's a fund management business doing very well. Last year, it was suffering from a negative economic backdrop in the market in China, but it is very well placed to ramp up its performance when the cycle turns.
As I mentioned, EUR 2.2 billion was net inflows came in in Q1. The second piece is a 25% ownership in the asset management business of La Banque Postale. We co-own that business. That is a well-positioned business doing good. I mentioned in my opening remarks that we actually co-invested with them in the acquisition of an equity platform. So quite and we lengthened the duration of the partnership with La Banque Postale Asset Management, and that is actually going quite well. So then the third component is our global platforms business, and there we are looking at a cost-income ratio, which is too high. The team is working on this diligently. It takes, it will take time.
We have seen some restructuring happening in the global platforms businesses, particularly in the U.K. Those are bearing fruit, so we're seeing that coming through in the numbers, but there's more work to be done. So bottom line, last year was a rough year, a difficult year, with two sides of the year, where in Q4 we saw the flows coming back that persisted throughout Q1, which is an encouraging sign that on the commercial side, we're gaining traction. But when it comes to the cost-income ratio, we need further work, but I would say... That will take a bit of time before that is implemented. On the second question of capital or investment opportunities. A couple of points here.
We aim to grow our franchise profitably, and as you rightly point out, growth is one thing, but growing it at appropriate returns is, of course, the thing that really counts. And we prioritize profitable growth over market share improvements to make sure that we remain disciplined in the value creation as we are growing the business in the various markets where we are present. We believe that we have quite some scope to invest in our business. So the capital that we generate, and the OCG last year was surpassing EUR 1.3 billion. So we like to reinvest a lot of that back into the business to sustain the growth and build franchise value over time.
At the same time, we have a very clear capital management policy, that the capital that we have in the business and in the holding company, that we do not need for investing in the business, has a clear priority of going back to stockholders in the form of dividends or buybacks over time. Now, it could be that... So first of all, our priority is to invest in the business in profitable areas. That's number one. Obviously, we also look at opportunities when they present themselves inorganically, if they fit the strategy, if we are ready to undertake the integration, and if we believe that they meet the strict financial and non-financial criteria.
If we would see those opportunities, I always call it a game of opportunity meets discipline, then we will act, and that we believe that it's in, let's say, then it's in the interest of our shareholders to do that. But again, if we do not find those opportunities, or we do not need the money for our transformation or for our growth, then it has a clear destination, which is that we bring it back to stockholders over time. We are serious about that commitment of disciplined capital management.
We have demonstrated through multiple buyback programs over the last years, including the $1.5 billion that we launched last year, or the $200 million that we've launched recently, that we are serious about our commitment of being a continued good steward of the capital that our stockholders are entrusting to us and that the business generates. The third component is about WFG. WFG is indeed a franchise that we're very pleased with, and I will explain to you why. A big underserved part of the market in the U.S. are 68 million households in the middle market, and those are households with incomes $50,000, $100,000, $150,000. That's what we call the middle market in the U.S. That market is vastly underserved.
We have the unique capability of WFG with 76,000 agents, who are actually themselves coming from those households, so those agents are part of that middle market America. We should also bear in mind that most of these households are second-generation immigrant families. They are relatively young, younger than 40 years, 45 years old, and that is therefore a very diverse group, and our agents are reflecting that group and have a very good access to that large, underserved market. So we're very pleased that we have that capability. We are the second largest in the United States, after a big competitor of ours, and we are indeed growing it to 110,000 agents. And so far, you can see it coming through, the benefits of this, in three ways.
One, increased sales. Two, increased agents. Three, an increased distribution profits from WFG, in its own right as a, as a business. Obviously, we spend a lot of time on managing that network in a very diligent and compliant fashion, and compliance is something we find extremely important. A couple of things I would like to mention, and that may not be that intuitive for, for, you know, working not in the United States. Different than in the Netherlands, for instance, every product that is being sold in a state in the United States needs to have regulatory approval, so the product design needs to be approved by the regulator in that particular state. That is number one. Number two, the agents are licensed.
We maintain the licensing over time to make sure the agents are appropriately licensed. About 3,700 of those agents are also additionally licensed by the SEC with a securities license. We have a number of regulators, both in the States, but also federal, who are overseeing the compliant nature of their licensing. We have a lot of training in place to ensure that the suitability of the processes between the agents and the clients are happening in an appropriate manner, and we have many checks and balances in place to ensure that this happens in a good fashion. One signal point for this is actually a quite interesting one.
If I look at the various distribution channels that we have, and I compare the customer complaints we're getting, then, relatively, the customer complaints we're getting from clients that are served through WFG are relatively the lowest, versus the other, distribution channels, which is an interesting, I think, an interesting backdrop. So we are happy with this. I also want to note one final point on WFG. They are agents that are not only selling our product, they are also selling products from other competitors of ours. So not only our eyes as a manufacturer on them from a compliance perspective, but also the eyes of many other manufacturers who they are working with. They do not only sell products from Transamerica. With that, I hope that I've been able to answer the questions that you raised.
Okay. Mr. Harris, do you have... You had some follow-up questions?
Yes. I understand you hear me, then the microphone is still on. If not, please intervene. But thank you for your answers, Lard. These we recognize, we appreciate, and also the disciplined capital management you refer to obviously coincides with our beliefs. As a very quick follow-up question on the WFG, to our understanding, the agents receive variable compensation after a sale. So I believe that this is an interesting market for Aegon, but are all control systems in place to protect against the mis-selling of financial products? Of course, that is the risk, a tail risk for the investors.
In immediate terms, we see the profit and, you know, the value of this business, but in the long term, you might have the tail risk that, you know, some of the agents might have been misaligned with the long-term interests of end consumers and investors. A follow-up question, Lard referred to his answer to the Chinese business with the joint venture in Aegon THTF insurance company. There, we indeed recognize the net outflow and the margin pressure following a regulatory change. Could you give a bit more light and more color on what the regulatory change in China was?
More generally, how is Aegon's relationship with the Chinese regulator, and what is the risk of additional negative impact of regulation in the future? Final question, a follow-up question, during 2023, Aegon remitted EUR 75 million from this joint venture business, calling it a special remittance. Does Aegon face hurdles if it wants to remit capital from China to Bermuda? And how does this impact capital allocation decisions in going forward? And do you anticipate any substantial write-offs on this investment if the remittance is an issue coming from China? So these are my follow-up questions.
Lard?
Yes, I'll take the first one and maybe, maybe, the remittances, et cetera, on from China. And the last piece of your question, my colleague, Matt Rider, can answer to you. We have two businesses in China. One business is an asset management joint venture with Industrial Securities. I was referring in my first answer to that. The second joint venture that we have is a life insurance joint venture, indeed, with THTF, our partner in China. In China, interest rates have dropped quite a bit. If you look at the interest rates, they have come down over the last couple of quarters, and especially in the fourth quarter, quite a bit. And the regulator has taken industry-wide action in the life insurance space.
Basically, it was a number of actions that they took, but let me give you a couple of them. The first one was to ensure that, let's say, the distribution commissions that are being paid are capped, that's number one. Number two, to maintain profitability also of the products. And number two, that there were some rules around the guarantees you could be designing in your products to make sure that so the regulator then acted industry-wide on this, not particularly to our own company. This, of course, has had an impact on overall volumes in the industry itself, and you see that reflected in the life insurance sales that we had in China as well last year. When it comes to the relationship we have with the regulator, we have a very good and constructive relationships with all our regulators, but also with our regulator in China. Maybe Matt, on the...
Maybe, maybe on the special dividends. So, so first of all, we did take some special dividends from the Chinese joint venture in 2023. There are no regulatory restrictions on dividend payments. We have a joint venture partner, where we come to an agreement on what dividend distributions will be to, to each of us. But our primary focus there, over the last several years, has been making sure it has enough capital to grow, which has really paid off. This is a business that, Aegon had paid something like EUR 20 million for, years ago, and now it's, it's making a significant profit, it's making a significant contribution to the group.
Okay. Anything else, Mr. Everts?
No, thank you. I have a few more questions also on the annual statements, but preferably I'll give the floor to someone else. Unless there's no one else, then I can do a quick round of three to five quick questions.
Giving a quick check. No, please proceed.
Okay. There are two topics on which I would like to raise an additional question. I will keep it short. Second, first question is, in the U.K. Aegon talks in its first quarter results about a continued challenging environment for retail. According to the press release, retail deposits fell again due to reduced customer activity. Could the poor performance be entirely blamed on the challenging macro environment, or are some of the issues self-inflicted? And in the same theme, in Aegon's U.K. workplace business, so this is the retirement plans for companies and their staff. Aegon reported lower net deposits in 2023, reflecting the departure of a single large client. Why, my question: Did this large client depart, and should investors be worried about this? And a third question on the annual accounts.
Analyzing insurance companies by looking at the market value to book value ratio is common practice. Is this ratio still relevant for Aegon? Now, it's reducing its exposure from asset-heavy insurance products to more asset-light, strategic assets in the WFG, in asset management, and the U.K. platform. So shouldn't Aegon give more disclosure about the potential of these businesses? And two questions on the presentation of the annual accounts. First question on applicable accounting standards.
When Aegon announced the redomiciliation to Bermuda, it noted that it was exploring the implementation of U.S. GAAP in the medium term, in addition to IFRS. Could Aegon give a status update? Is it still the plan? A second and final question, in the risk paragraph, Aegon stated that the SEC and other regulators have increased their focus on cybersecurity, vulnerabilities, and risks. This has had, and will probably continue to have, an impact to Aegon. Could you please give a status update on the new rules and the potential impact? Let me stop here.
Okay, good. I'll first pass to Lard, and then the particular the points on the financials to Matt, the CFO. Go ahead.
Yes, thank you very much. So, Mr. Everts, first, on your question on the U.K. Our workplace business in the U.K., to start there, is actually doing well. And commercially, we're seeing a number of quarters in a row, the business growing well, in spite of indeed one big contract that left us. Now, while I do not like to lose clients, let me make that perfectly clear, it is sometimes a fact of life. Competition exists, and if clients need to renew their contract, sometimes you lose it. Obviously, we don't like that. We don't like that, but I would say that is... If I look at the overall workplace business, it is buoyant. We are now the number three in net flows in the U.K. market, so we're doing actually pretty well.
Having one large contract leaving us is unfortunate. We don't like it, but these things unfortunately happen, and it's a part of competing. The second business we have in the U.K. is what we call the retail platform. This is a platform used by advisors to advise their retail clients and to administer the assets as a result of that. Indeed, there are two components here. It's not only the market, to your point. We are looking at, in the U.K., you know, the economy in the U.K. is not really good, and the market backdrop is not really good. It was not really good in 2023 for retail households, given high inflation and a lot of pressure that that environment brought to them.
So there was some apprehension when it comes to investing. Secondly, the move from defined contribution, sorry, defined benefit money that moved to individuals to be reinvested in defined contribution was less these transfers, and also that meant there was less volume in the market to be reinvested. That's another component of it. However, there's also another component of the quality and intuitive customer experience and advisor experience that our platform is offering, and we've had some issues there. We have invested in it. We are rolling out, as we speak, ADX, which is a new version of the platform, which has been very well received by the advisors at this point. But I would say the retail platform performance is a combination of two things.
One, a market dynamic that has been the same for the entire industry. And number two, additional investments and capabilities that we need to improve in our UK business to make that platform more intuitive, and giving it a better experience for my advisors, and as a result, being able to attract new net flows. So it's a combination of both. And I think maybe Matt? Maybe you just want the, asset light, price to book value.
Oh, yeah, price to book ratio. It actually becomes a bit more relevant under the new IFRS 17 standard. So I think you could see a year around year-end, we were sitting at a price to book of around 1.3x . So our book value stands at year-end at about EUR 7.5 billion, and our prices significantly increased over the last several years. So we're actually, it starts to become more meaningful given the implementation of IFRS 17.
Okay. And,
Then there was a question on the plan to consider U.S. GAAP. So, maybe you want to answer that as well, maybe?
Sure. On U.S. GAAP, we said at the Capital Markets Day that we were going to be investigating implementing U.S. GAAP, and we are indeed still in that investigating stage. So we have not yet kicked off a project that would add to the ability to compare, especially our U.S. business to U.S. peers, and might give us some additional flexibility, but we have not yet kicked off that project. We elected more to spend our time on the implementation of IFRS 17, to make sure that we had fully embedded that one first. So may be doing that, but have not kicked off a project.
Okay, and SEC rules? And cyber?
Yeah, on cyber, I would say that, you know, we already have actually quite a strong cybersecurity program, so I wouldn't anticipate that new SEC rules would have a tremendous influence on us. Given our, given our past history, as we have been supervised by the Dutch Central Bank, in the Netherlands, there was a very strong focus on cybersecurity. So, you know, a lot of what we talk about in the risk, in the Risk Committee meetings is around, the risk of cyber and the steps that we are taking to make sure that we have a good handle on that. So I would not anticipate anything additional coming out of the SEC for us.
Okay. Does that answer your questions?
Certainly, does-
Any other questions, Mr. Everts?
Not on this topic, no.
Okay. Okay, just, because just for Mr. Everts, just so you know, we're going to be moving on to the remuneration report. Do you have any questions for PwC, the auditors, before you move on?
No. The presentation was clear and much appreciated.
Thank you, then. Okay, thank you then for your questions. We now move to agenda item 2.3. Dona Young, the Chair of the Compensation and Human Resource Committee, will present the 2023 Remuneration Report. Dona?
Thank you, Bill. Ladies and gentlemen, before we ask you to cast your advisory vote on the 2023 Remuneration Report, I would like to share a summary of what was disclosed in the 2023 report and answer your questions. The report included four sections, which described our business and remuneration highlights, our remuneration approach for the general population, the remuneration of the non-executive directors, and the remuneration of the executive director. We will first look at the remuneration of the non-executive directors. The remuneration policy that applied to the non-executive directors in 2023 was approved by our shareholders in 2020, and there were no deviations from this policy in 2023. The total compensation level of the non-executive directors in 2023 was comparable to 2022.
Changes in compensation at the individual level were mainly caused by the number of meetings that were attended, the travel movements that were made to attend meetings in person, and the fact that some non-executive directors joined or left in 2022 and 2023. The remuneration policy that applied to Mr. Friese and Mr. Rider in 2023 was approved by our shareholders in 2020 as a policy for our executive board members. When Mr. Friese joined our new one-tier board as executive director in the course of 2023, this policy continued to apply to Mr. Friese, but no longer to Mr. Rider. However, for transparency, Mr. Rider's compensation was disclosed for the full 2023 performance year. For both Mr. Friese and Mr. Rider, there were no deviations from the policy in 2023.
For the 2023 performance year, Mr. Friese was allocated EUR 1.637 million in fixed compensation and EUR 3.9 million in total compensation. Mr. Rider was allocated EUR 1.037 million in fixed compensation and EUR 2.5 million in total compensation. The total compensation for both was higher compared to 2022 because the base salaries of Mr. Friese and Mr. Rider were increased by 5% as of January 2023, and they were allocated higher variable compensation. When looking at the variable compensation in more detail, the 2023 awards for Mr. Friese and Mr. Rider were based on a mix of 70% Aegon Group business results and 30% individual performance results.
As disclosed in this table, the total 2023 group performance result was 139% on a performance scale, with 100% as target and 150% as maximum. This result was mainly driven by strong performance on relative total shareholder return, addressable expense savings, the timely execution of the transformation programs initiatives, and employee engagement. However, looking at the average financial performance results, it was decided that a performance result of 130% was a more accurate reflection of the group's overall performance, and therefore, the total performance result was adjusted downward. For Mr. Friese and Mr. Rider, the adjusted group result of 130% equaled a result of 92% on the performance scale that applied to them.
Combined with the results of their individual goals, the total performance result for both Mr. Friese and Mr. Rider was 93%. For this, Mr. Friese was allocated EUR 1,529,000 in variable compensation, and Mr. Rider was allocated EUR 969,000 in variable compensation. A third of their variable compensation has been paid in cash in 2024, while two-thirds will be paid in Aegon shares in 2027 after a three-year deferral period. Back to you, Bill.
Thank you, Dona. Thank you, Dona. We will now address the questions regarding agenda item 2.3. Mr. Everts, you're first in line. Do you have any questions on this point?
I have no questions. We agreed, the policy, then, and it's well-deserved, I think, the outcome, so, no questions.
Okay. I'll then check. Are there any questions on the chat? No. Good. So then, just please note that the agenda item 2.3, about the Remuneration Report, is subject to an advisory vote. Proceeding to the vote, let me briefly explain how you can vote via the Lumi application. The voting app displays the following options: for, against, and withheld. After you voted, the display will show your vote. If you want to change your vote, you can do so until the voting is closed. For our shareholders in the room, if you have questions about the voting app, please raise your hand and someone will assist you. The voting results will be shown at the end of the meeting before any other business. We now move to agenda item 2.4, the approval of the final dividend 2023. This is a voting item.
As indicated in the annual report 2023, we propose a final dividend in 2023 of EUR 0.16 per common share and EUR 0.004 per Common Share B. If approved, and in combination with the interim dividend paid over the first half of 2023, Aegon's total dividend over 2023 will amount to EUR 0.30 per common share and EUR 0.0075 per Common Share B. We will now address questions regarding agenda item 2.4. May I invite shareholders present here in the room to ask their questions? If there are no further questions from shareholders in the room, I would like to invite those shareholders participating virtually to ask their questions via the video connection. Mr. Everts, you're still connected?
I'm still connected.
Any questions on this point?
No questions. We appreciate it.
Okay, very good. There are no further questions on the video connection. Any on the chat? No. Good. Therefore, we can then proceed to the next agenda item, which is item 3.1, adoption of the directors' remuneration policy, which is a voting item. We now move to agenda, agenda 3.3, the adoption of the policy. The Chair of the Compensation Human Resource Committee, Dona Young, will discuss with you the proposal as described in agenda item 3.1. Dona?
Thank you, Bill. In this agenda item, we ask you to vote on the directors' remuneration policy. This vote takes place at least every four years and was last held in 2020. As a board, we propose a new remuneration policy for this year's vote. We felt a new policy was needed for the following reasons. First, to enable Aegon to attract and retain executive and non-executive directors who can deliver on Aegon's ambitions for value creation and our strategy of growth. Second, to establish a strong correlation and alignment between the executive directors' remuneration and Aegon's financial performance, as well as the long-term interests of Aegon, its shareholders, and other stakeholders. Third, to reflect the significant changes in Aegon's profile, geographical footprint, governance, and the strategy since the last vote in 2020.
Fourth, to consider continental European, U.K., and U.S. remuneration market standards and key proxy advisors' guidelines. Finally, we sought to consider all stakeholders' interests in creating a new framework, despite the fact that more than 99% of our business activities are outside of the European Union, and notwithstanding the fact that more than the majority of our business is in the U.S. The policy was developed over several months and was discussed by the board with many different stakeholders in two engagement rounds. These stakeholders included Aegon's largest shareholders, proxy advisors, shareholder representatives, and employee representatives. Before we ask you to cast your vote, I would like to share a summary of the proposed policy and answer your questions.
The proposed policy consists of three main parts: a new labor market peer group, a new policy for the executive director, this is the policy that applies to our CEO, Mr. Friese, and a new policy for the non-executive directors. I will address each of these parts in more detail in the following slides. We propose a new labor market peer group that better reflects the markets in which we compete for executive and non-executive directors. Since 2020, when the previous policy was adopted, these markets have shifted, along with the significant changes to Aegon's profile and geographical footprint. The proposed peer group consists of eight European insurance companies, four Dutch general industry companies, and four US insurance companies. The European and U.S. insurance companies are included as competitors for talent with experience in the same industry and markets in which Aegon operates.
The Dutch general industry companies reflect competitors for talent with experience in Dutch companies that also have a large part of their business in the U.S., like Aegon. Despite the significant size of Aegon's business in the U.S., which currently constitutes around 70% of Aegon's operations, the number of U.S. companies is deliberately underweighted to be respectful of Aegon's roots, primary listing, and headquarters in the Netherlands. In the new remuneration policy, the executive director's remuneration will consist primarily of variable, performance-based compensation, while previously, most remuneration was guaranteed. The base salary will be determined by the CEO's experience, performance, market data, and the pension will be equal to 15% of base salary. The variable compensation for the executive director will consist of a distinct short-term incentive, STI, and long-term incentive, LTI.
The STI will have a one-year performance period and will be paid in cash after the performance period. The LTI will have a three-year performance period and will be delivered in Aegon performance shares that cliff vest after the performance period. After vesting, these shares will be subject to a two-year holding period. In addition, there will be a 400% minimum shareholding requirement. Both the STI and the LTI have a threshold that will equal 50% of target and a maximum that will equal 200% of target. The STI and LTI performance metrics will be based on financial performance, and the STI will continue to include quantitative ESG metrics. Lastly, the risk management processes for target setting and metric outcomes, as well as the malus clawback rules, will remain in place.
The remuneration package of Mr. Friese for 2024 will be restructured in order to apply the new remuneration policy. His restructured package was calculated as follows. First, Mr. Friese's fixed compensation has been reduced by nearly EUR 800,000 to a base salary of EUR 1.3 million and 15% in pension contributions. This reduction of fixed compensation was subsequently converted into an STI target of 100% of the base salary and an LTI target of 175% of the base salary. Lastly, the base salary was increased by 5% to EUR 1,365,000 as part of the regular annual salary adjustment review. After the salary increase, Mr. Friese's fixed compensation is reduced by EUR 722,000. The total target remuneration equals the 25th percentile of the new labor market peer group.
After 2024, there will be an annual salary adjustment reviews in which the Board can decide to adjust Mr. Friese's base salary. For this, the Board will consider Mr. Friese's individual performance, internal salary changes, salary developments in the new labor market peer group, and economic developments. This is consistent with how his base salary was previously reviewed. There will be no changes to other remuneration components, such as the target STI and LTI percentages, unless there are significant changes to Aegon's scope, for instance, in terms of revenue or total assets. In that case, the board will consider remuneration changes that reflect the scope and will engage with its stakeholders, even if the intended compensation changes are within the new remuneration policy. For the 2024 plan year, the board selected the following STI performance metrics.
Operating capital generation from our business units with a 45% weight, a blended commercial metric that measures the key revenue and sales metrics of Aegon's business units with a 40% weight, a blended ESG metric that measures weighted average carbon intensity, employee engagement, and women in senior management with a 15% weight equally distributed. For the 2024 LTI, the board selected the following performance metrics: relative total shareholder return with a 50% weight, return on regulatory capital with a 50% weight. The board aims to keep the STI and LTI performance metric stable for consecutive plan years, but may exercise discretion to further develop these metrics over time to ensure a continued alignment with the company's strategy and stakeholder interests. Relative TSR will be measured against a peer group of U.S., Canadian, and European insurance companies.
For this metric, the threshold is set at median performance compared to the peer group. The target is set at the 66th percentile, and the maximum is set at the 83rd percentile. The targets of the other STI and LTI metrics will be retrospectively disclosed in the remuneration report. The remuneration of non-executive directors will consist of annual board and committee retainer fees. As you can see in this table, the annual board retainer fees will be paid 75% in cash and 25% in shares. These are non-performance based restricted shares. This approach aligns the remuneration of the non-executive directors with the long-term interests of Aegon and its shareholders, and puts Aegon in a stronger position to compete for non-executive directors in markets where partial payout in shares is the norm, such as the U.S. and parts of Europe.
This is combined with a minimum shareholding requirement, which equals 100% of the cash portion of the annual board retainer fee. This requirement further aligns the remuneration of the non-executive directors with the long-term interests of Aegon and its shareholders, also considering the independent role of the board. The remuneration of the Chair of the Board is aligned with the new one-tier governance structure and responsibilities, where the CEO and the Chair of the Board are each other's counterbalance. The Chair will not be eligible for committee retainer fees. Back to you, Bill.
Thank you, Dona. We will now address your questions regarding agenda item 3.1. Mr. Everts, you're on the video, so if you have any questions, this is the moment to proceed.
Okay, thank you, Chairman. So the Royal Dutch Shareholders Association appreciates Aegon's prior engagement with investors on the topic of remuneration, in which we, as you know, agreed to disagree. In principle, we appreciate that the remuneration policy for the executive director is more tilted towards the longer term, with a clear accent on the longer term component, LTI. We also welcome the introduction of a minimum shareholder requirement for executives. However, while Aegon intends to establish a strong correlation between executive remuneration and Aegon's financial performance, in our opinion, the end result is a substantial pay rise that is relatively independent of delivered performance. We note that the headings at Target and Maximum Performance result in total pay that is substantially higher than under the current remuneration plan.
Doing the math, the maximum payout increases to EUR 9.1 million versus EUR 3.9 million under the current policy. We believe this outcome is disproportionate and undesirable. Aegon has significantly decreased its size and complexity. Moreover, we question the ambition level of the targets. For instance, as is evidenced by the payout under the LTI, with merely median TSR performance compared to peers. Hence, we conclude that the policy is suboptimally structured and consequently allows for excessive outcomes. Hence, I have three questions on the remuneration policy. Aegon introduced a labor market peer group that was used to benchmark the proposed remuneration structure and pay levels, and the peer group consists of eight European insurance companies. We just heard that. Four Dutch general industry companies and four U.S. insurance companies.
Hence, a total of 16, and the quantitative selection of the EU and U.S. insurance companies was based on revenue and total assets. For the Dutch companies, Aegon looked at companies with significant revenues in the U.S. We understand that. Our own analysis shows that Aegon ends up in the middle of the peer group when looking at revenues and total assets. However, and this is important, when looking at the market cap, only four companies are smaller. That is Randstad, Voya, Unipol, and Lincoln. 12 companies are larger and some are substantially larger, including AXA, Zurich, both sevenfold in size, and Prudential, four times as large. Hence, as the impact from the market cap perspective is not corrected for, Aegon compares itself to much larger and more valuable companies, at least the current stance of the exchange.
So my first question: Why wasn't market cap used as the, or at least as an additional selection criterion for benchmark purposes? Then I have two additional questions on Aegon's variable compensation opportunity, which will be higher. According to Aegon, this increases the pay for performance and decreases the risk for payment for failure, and the long-term incentive largely determines the outcome of the CEO's pay. Aegon looked at two performance metrics, relative shareholder return and return on regulatory capital, both with a 50% weight. For relative shareholder return, the peer group at target level is disclosed up front. However, for the return on regulatory capital, Aegon will only disclose three-year period targets and performance levels afterwards. So my second question is, and the Chair of the Remuneration Committee just stated that the variables for target levels will remain stable....
So this is important information for us investors. Why doesn't Aegon disclose the target levels for the return on regulatory capital upfront? As this is high level information, we don't see such targets as commercially sensitive, and the same is true for the disclosure of the performance hurdles of the STI. Secrecy and discretion is not the way to convince shareholders about alignment. We want the transparency here. And for the relative total shareholder return metric, the threshold is set at median performance. The target is set at 66th percentile, and a maximum is set at the 83rd percentile. So my third question, while the new policy intends to increase pay for performance, it's setting the threshold level at a peer group's median. Is it really paying for performance? And this is by definition, a mediocre performance.
With the maximum payout, 3.5x base compensation, already at the 83rd percentile, does this really qualify as exceptional performance? How can we be assured that the ambition level of the undisclosed return on regulatory capital is ambitious enough? A final observation on executive remuneration, the new policy includes a buyout arrangement. Why wasn't this arrangement capped or maxed or maximized, or is it? So those are my questions on the executive remuneration, and I have two smaller questions on the non-executives, but please allow me to give you the floor to answer my questions first.
Understood. Thank you. Dona?
Certainly, thank you for your questions, and I hope I've captured them all, but if not, please correct me. Number one, as we discussed during the engagement that we had, and I believe we had at least two conversations on this. When you construct a peer group for, a labor market peer group for an insurance company, the two most widely looked at factors are indeed revenue and assets, not market cap. That is consistent across the industry, and in the spirit of being consistent across the industry, that is the basis upon which we constructed our peer group. So you're correct in terms of how we position on market cap, but again, this is consistent as a best practice within the life insurance industry. So that was your first question. The second question is, about, I think, post-disclosure.
Is that the question? And that we've given disclosure on the TSR targets up front, but we're giving post completion of the performance cycle for the other metrics. That is also a practice that is consistent with the industry and with most companies across industries, as far as I'm aware, because those performance metrics really go to the heart of the business plan and the competitive nature of the company. And it is not our intention to be secretive at all. In fact, I think our disclosure and our level of engagement throughout the shareholder process leading up to this new policy, which you favorably commented on, is clearly reflective of our intention to be fully transparent, and we will disclose this information and engage with shareholders once a performance cycle ends.
In terms of the third question, setting the threshold at 50% on TSR, does that suggest we're paying for mediocre performance? The answer to that is not at all. That is the threshold, that is not the target. The target is, of course, at the 66th percentile. Again, having done extensive work on this, having had extensive consultation with shareholders on this very point, this is a very consistent framework with what other companies are using and is considered a best practice.
And what we certainly learned during the consultation process is that this is an appropriate level at which to set the threshold, and the higher ambition for target and for maximum performance reflects outperforming our peer group substantially. Now, I think there was another question, and I'm not sure. I really don't understand the question about the buyout mechanism not being capped. So if you could explain that, that would be helpful.
Mr. Everts, it was just the buyout. Could you just explain again the question about the buyout mechanism not being capped, if we understood correctly?
Yeah. If I read it well, the new policy includes a buyout arrangement in the remuneration policy, which is not capped or maximized. But if that is not understood, I will redo my homework and put you something in writing on this.
Okay. That would be useful.
Why don't we have a follow-up with that, and if you put it in writing, we'll be happy to answer that.
Good response.
Thank you, though. Thank you for your questions.
And then you had some questions about non-executives?
Yeah. First,
Go ahead
A quick follow-up or reflection on the answers. I fully appreciate it. This is the policy which is on the agenda, and we need to vote, and a lot of my fellow investors already voted, of course, by proxy. So it is what it is, and we need to work with this, and I presume that there will be a majority also for the remuneration policy. But as you rightly stated, this will be evaluated, yeah, every, let's say, so many years. You referred a lot to industry practice.
We understand that, but sometimes if all the companies that enter the scene, in this case, Aegon, coming from the Netherlands, entering the scene in the U.S., and will pull up, let's say, the remuneration to the levels which is industry practice, we understand it. That's a new market. But then you will see that, some which have a larger market cap will go over that industry practice, and the industry practice will move to higher levels, while no one is actually recognizing that. So sometimes you need to set the tone. So my reflection on your answers is, in the future evaluation, please consider carefully whether market cap should be an element. It can be an advantage for Aegon if everything goes right, a disadvantage, as well, but, you know, take it into account.
And also, let's say the target levels and the transparency on target levels. We've really carefully looked at this, and we really don't think that commercial interests will be a convincing argument not to be, let's say, ex ante clear on the target levels. We think that is possible. But, you know, work with it. This is the policy as it is, but we think a bit more transparency might be helpful. But that is my reflection on your very well-answered questions. Then, if I may, two remaining questions on the non-executive remuneration. The new policy implies that around 25%-5% of the fee for the non-executives will be paid in Aegon shares.
In addition, a minimum shareholder requirement is introduced that is equal to 100% of the cash portion to be built up within four years. In the Q&A, Aegon states that this requirement further aligns the remuneration of the non-executive directors with the long-term interest of Aegon and the shareholders, and I quote, "Also taking into account the independent role of the board." End of quote. So my first question: could Aegon specify how the independent role of the board, especially, you know, the non-executives in the board, was considered? Was, for example, taken into consideration that generally accepted corporate governance codes in Europe and in the Netherlands are quite clear that remuneration of non-executives should not include shares? And are non-executives, for examples, allowed to sell shares during the term or immediately after their term?
The second question, there is a significant difference in compensation between the Chair, in total EUR 500,000 annually, and other Board members, in total EUR 115,000, excluding committee fees. So what is the rationale for this significant difference, and how does this compare to the non-executive remuneration of peers? And how is the collective decision-making guaranteed if the Chair is not one among equals, but paid a significantly higher amount? So is the incentive, for instance, to continue as a Chair due to the pay, not a significant governance risk, which might easily undermine independence and the willingness to apply professional criticism?
I raise this question, be very clear, irrespective of the personal character, and don't take this personally, Bill, but it's for the sole reason that culture and ethics build on structure, including the remuneration structure, and not the other way around. So have you provided the auditor, for example, with the opportunity to reflect on this? And if so, what was the outcome of this reflection? So these were my two questions.
Okay. Dona?
Very good. Thank you. Number one, the independent role of the board is reflected in the way we approached this entire process. We independently evaluated, starting with the strategy of the company, where we are today, vastly different, as you heard from Mr. Friese, than it, we were even just four years ago. Against that backdrop, we took into consideration, outside advice, market practice, and considered how to balance all of the interests involved. Because admittedly, Aegon is a bit unique, with 99% of its business outside of the EU, nearly 70% of its business in the U.S., and yet we have wonderful historic roots in the Netherlands, our headquarters in the Netherlands, we remain a shareholder, taxpayer in the Netherlands and a shareholder in a.s.r.
So we had to balance all of that as we considered the future and to future-proof the remuneration policy on behalf of this company. And in that regard, we looked at what is, what is the required to attract the best, most capable, knowledgeable individuals to our board, and that included the non-executives, not just the executives. And in that context, and in striking that balance, we appropriately set the compensation levels, reflecting the same labor market peer group. We looked at the structure of compensation and simplified meaningfully the program and moved to the retainer.
In light of the fact that we have substantial U.S. interests, we have substantial number of board members who reside in the U.S., even currently, and given the fact that in some European jurisdictions, shares are used. We felt that instead of creating a conflict of interest by providing 25% payment in shares, we actually create an alignment of interest with our shareholders and stakeholders. So we think it is a very balanced program. It reflects all the factors I just articulated. In terms of the holding period, that is designed to ensure that we are focused on alignment with our shareholders.
In terms of selling shares, while there is no restriction on selling shares, once we've reached that holding period, and we've built up to the 100% cash retainer in four years, we obviously would be subject, any non-executive director who intended to sell shares would be subject to all of the pre-clearance and regulatory requirements that would always apply to an insider. So I think there are safeguards around that process to avoid any kind of conflict. Now, with respect to the chair, the chair's compensation also, I don't want to repeat myself, but competitively positioned, reflecting the peer group that we have chosen, and his compensation also reflects the significant change in structure.
We have moved from a two-tier board to a one-tier board, and that has an impact on compensation because of the additional engagement expected and requirements of a Chair in a one-tier board, and the counterbalance that I referred to in my prepared remarks. In terms of where we have set that compensation level, it is below the median of the peer group. It is at roughly the 36th percentile.
And I appreciate the fact that you were commenting on Mr. Connelly's character or performance directly, but Mr. Connelly himself was not a factor in deciding how to set the compensation for the Chair. He happens to be the incumbent, but the process was the same. We need a structure that's future proof. We need a structure that attracts the best and brightest candidate to be our Chairman, whether it's currently Mr. Connelly or sometime in the future. I hope that was helpful.
Does that address your questions, Mr. Everts?
Yeah, thank you. I've one observation, and the last remark is very valid. Of course, this is a responsibility of the Chair of the Remuneration Committee, and it doesn't connect to individuals. But the outcome for us is still a challenge if there is such a difference in remuneration among the non-executives. But I've heard your response to that. There was one part of your response which deserves a reply, and that is, that in a lot... You referred to in a lot of corporate governance codes and practices, also in Europe, sometimes shareholdership of the non-executives is appreciated.
I don't dare to comment here, because, you know, from a governance perspective, and especially coming from the Netherlands, the responsibility of the supervisory board, and here also the non-executives in a one-tier board, is to not only look at the perspective of the shareholder, but to take into account all stakeholders. For instance, if there is a takeover, a merger, anything which relates to the continuity of Aegon, but especially if there's a hostile takeover. And therefore, in most corporate governance codes, it is really not wanted that those that actually need to address all stakeholders and all their interest as a non-executive, they do have a direct interest in shares. Hence, they have a bias vis-a-vis shareholders.
We like it as investors, but that is for, let's say, friendly fire and not for hostile takeovers. We want the continuity of Aegon, of course, to be always safeguarded by the non-executives. So hence, you trigger a bit my applause by, okay, it's good to be aligned, but at the same time, the role of executives and non-executive is a bit different, and hence my criticism on this proposal. But of course, the shareholder base is not only the Dutch, it's international, and I also recognize in the U.S., this is common practice, so most probably you'll get a round of applause from the shareholders in the voting. But this issue, of course, needs to be addressed as well. So thank you for being able to do that.
Okay.
I appreciate your candor and your...
Let me just remind you that this agenda item 3.1, the adoption of directors' remuneration policy, is a voting item. We will now move to agenda item 4.1, the proposal to appoint Ernst & Young Accountants as independent auditor for the annual accounts of 2025. During the 2023 AGM, Ernst & Young Accountants was appointed as Aegon's new accountant for the annual accounts 2024 to 2028. In accordance with Bermudian legislation, the accountant must be annually reappointed. We ask our shareholders today to reappoint Ernst & Young as the auditor for the 2025 annual accounts. Are there any questions from the room or from the video on this item on the chat? Very good. This allows us to proceed to Aegon's agenda item 5.1, the approval of the amended bylaws of the Aegon Limited.
This is a voting item. We will now address Aegon's amended bylaws. As announced on September 15, 2023, in advance of our extraordinary general meeting of shareholders held on September 29, 2023, following engagement with our stakeholders, three additional changes to the governance of Aegon Limited had been decided upon to further enhance shareholder rights. These three changes are the introduction of preemptive rights on the issuance of common shares, the requirement to receive shareholder approval for share buybacks, and shareholder approval for annual final dividend payments. In addition to these three changes, a few minor changes have been made to the amended bylaws. An overview of the proposed alterations can be found in Annex One to the agenda. Pursuant to bylaw Article 46, upon passing the resolution at this meeting, the amended bylaws will become effective immediately.
We will now address any questions in the room or via video on this item. Any from the chat? Very good. This allows us to continue to agenda item 6, Composition of the Board of Directors of Aegon Limited. This is a voting item. We'll now move to agenda item 6, the composition of the board of directors. Let me first address all proposals under this agenda item before taking your questions. First point, 6.1, re-election of Mr. Lard Friese as member of the board of directors, voting item. We propose to re-elect Lard Friese as executive director of the board of directors for a term of 4 years, so until the end of the AGM, to be held in 2028.
It is proposed to extend the current term of Mr. Friese because of his performance, leadership, and vision as CEO, as well as his in-depth knowledge of the financial services industry. Under Lard’s leadership, Aegon has become a more focused company with improved operation, operational performance, a stronger balance sheet, and enhanced risk profile. Aegon has embarked upon the transformation with the ambition to build leading businesses in investment, protection, and retirement solutions. Lard’s re-election will help drive the execution of the next chapter of Aegon’s transformation and will continue to deliver on Aegon’s strategy and financial objectives. More information about Mr. Friese is available in the agenda in Annex 2. Then we have item 6.2, the re-election of Ms. Corien Wortmann-Kool, as a member of the board of directors. Again, voting item.
We propose to re-elect Corien Wortmann-Kool as non-executive director of the board of directors for a term of two years, so until the end of the AGM to be held in 2026. This will bring her total tenure to 12 years. It is proposed to extend Ms. Wortmann-Kool's current term because of her extensive knowledge in the fields of financial markets, sustainability, customer centricity, governance, compliance, and public affairs. Her broad background in the political, societal, and business environment, as well as her interest in cultural, organizational, and employee matters, has provided great value and continuity to the board. More information about Ms. Wortmann-Kool is available in the agenda in Annex 3. Then we have 6.3, re-election of Ms. Caroline Ramsay, as a member of the board of directors. Again, a voting item.
We propose to re-elect Caroline Ramsay as non-executive director of the board of directors for a second term of four years, so until the end of AGM to be held in 2028. It is proposed to extend Ms. Ramsay's current term because of her strong board-level experience, the quality she demonstrates as Chair and the quality she demonstrates as Chair of the Risk Committee. Her extensive knowledge of the organization and her sound finance and audit disciplines are valuable assets to the board. More information about Ms. Ramsay is available in the agenda in Annex 4. Then we have also 6.4, re-election of Mr. Thomas Wellauer as a member of the board of directors. Again, a voting item.
We propose to re-elect Mr. Thomas Wellauer as non-executive director of the board of directors for a second term of four years, so until the end of the AGM to be held in 2028. It is proposed to extend the current term because of his profound experience in Europe, the U.S. and Japan. His extensive knowledge in the insurance and reinsurance industry, his substantial expertise in the fields of strategy, restructuring, operations, and human resources provides great value to the company. More information about Mr. Wellauer is available in the agenda, Annex 5. We then have agenda item 6.5, election of Mr. Albert Benchimol as a member of the board of directors. Again, a voting item. We propose to elect Albert Benchimol as a non-executive director of the board of directors for the first term of four years, so until the end of AGM, to be held in 2028.
It is proposed to elect Mr. Benchimol because of his long and distinguished career in the insurance, insurance sector and his international experience. His extensive knowledge of the Bermuda business environment and his broad network are considered of great value to the board. More information about Mr. Benchimol is available in the agenda in Annex 6. We will now address your questions with respect to these five proposals. May I invite those shareholders in the queue and in the chat to be prepared. You're, Mr. Everts, you're still in the queue? Do you have any questions on any of these points?
I don't have questions, and I would support the re-election.
Thank you. Anything from the chat? Thank you. We now move to agenda item 7, the issuance and acquisition of shares. Let me briefly cover all three proposals of item 7 before taking your questions. We propose that the meeting authorizes the board of directors to resolve to restrict, exclude preemptive rights in connection with the issuance of common shares, as described on page seven of the agenda. Upon adoption, the resolution will replace the authorization granted at the 2023 AGM. The proposed authorization will allow the board of directors to be flexible and to react quickly to circumstances that require the issuance of common shares. Authorizing the board of directors to restrict or exclude preemptive rights is subject to the amended bylaws becoming effective.
It is proposed that the shareholders authorize the board of directors to resolve to restrict or exclude preemptive rights in connection with the rights issue, as described on page eight of the agenda. The proposed authorization will give the company flexibility in managing its capital position and to respond promptly to developments in the financial markets if circumstances so require. Such rights issues will be concluded in line with market practice. To address certain concerns raised by stakeholders in relation to the exclusion of preemption rights in relations to a rights issue in excess of 10%, I would like to make the following clarifying statement. As we have indicated publicly, prior to the re-domiciliation, the board will only use its authority granted by the change of bylaws.
To do so, to do a rights issue in excess of 10% of the issued share capital to protect the company in exceptional circumstances of financial distress, or in other words, where the solvency capital of Aegon Limited is at risk of dropping below applicable regulatory thresholds and the capital position will need strengthening to address actual or reasonable foreseeable challenges caused by a financial crisis situation. The proposed authorization replaces the one granted to the board in previous AGMs of Aegon N.V. Authorizing the board of directors to restrict or exclude preemptive rights is subject to the amended bylaws becoming effective. Lastly, we propose that the shareholders authorize the board of directors to acquire shares in the company. The proposal is described on page nine of the agenda.
The number of shares that may be acquired, may be so acquired, will not exceed 10% of Aegon Limited's issued share capital at the time the authorization is used. Common Shares and Common Shares B may only be acquired at a price not higher than 10% above the actual market value of the shares immediately prior to the acquisition, and provided that the number of shares Aegon may, at any time, hold in its own capital, may not exceed 10% of the issued share capital at the time the authorization is used. Upon adoption, this resolution will replace the authorization granted at the 2023 AGM. We will now address the questions for agenda item 7.1, 7.2, and 7.3. May I invite those shareholders in the video or via chat to raise? Mr. Everts?
No, thank you. Ladies and gentlemen, the item 7 was the last voting item on the agenda. Within a few moments, we will close the live voting. Please submit your votes now if you have not already done so. The voting is closed. Within a few moments, we will show the voting results for the agenda items. I would like to ask the company secretary to report on the voting results. Bieke, would you please read out the voting results for each agenda item?
Definitely. Agenda item 2.3, 98.76% has voted in favor of the resolution, 1.24% against. Agenda item 2.4, approval of the final dividend, 99.6% in favor of the resolution, 0.4% against. Agenda item 3.1, the adoption of the remuneration policy, 97.41% voted in favor of the resolution, 2.59% against. Agenda item 4.1, the appointment of Ernst & Young, 99.96% has voted in favor of the resolution, 0.04% against. Agenda item 5.1, the approval of the bylaws, 99.96% has voted in favor of the resolution, 0.04% against. Then we continue.
Agenda item 6.1, the re-election of Mr. Lard Friese, 98.97% in favor, 1.03% against. Agenda item 6.2, the re-election of Corien Wortmann, 98.46% in favor of the resolution, 1.44% against. Agenda item 6.3, the re-election of Caroline Ramsay, 98.99% has voted in favor of the resolution, 1.01% against. Agenda item 6.4, the re-election of Thomas Wellauer, 98.98% in favor of the resolution, 1.02% against. Agenda item 6.5, the election of Albert Benchimol, 99.09% has voted in favor of the resolution, 0.91% against. And then finally, agenda item 7.1, 98.21% in favor, 1.72% against. Agenda item 7.2, 90.58% in favor of the resolution, 9.42% against. Finally, agenda item 7.3, 99.76% in favor of the resolution, 0.24% against. Thank you, Bill.
Thank you, Bieke. I now establish that the meeting has approved the amended bylaws of Aegon Limited, which will become effective immediately. I establish that the meeting has granted an advisory vote in favor of the Remuneration Report 2023 and approved the final dividend over 2023. Furthermore, I establish the meeting has adopted a directors' remuneration policy. I establish that the meeting has appointed Ernst & Young Accountants as independent auditor for the annual accounts of 2025. I establish that the meeting has re-elected Lard Friese as executive director, Corien Wortmann-Kool, Caroline Ramsay, and Thomas Wellauer as non-executive directors of Aegon Limited's Board of Directors. Also, I establish that the meeting has elected Albert Benchimol as non-executive director of Aegon Limited's Board of Directors.
Lastly, I establish that the meeting authorized the board of directors to, first of all, restrict or exclude preemptive rights in connection with issuance of common shares, to restrict or exclude preemptive rights in connection with the rights issue, and acquire shares in the company. We now move to agenda item 8, any other business. Before we come to the conclusion of the meeting, I will ask us if there are any businesses to be brought forward before the meeting? Thank you. Before I move to closing of this meeting, I would like to thank Rogier van Adrichem for his team in carrying out their task with high level of integrity and dedication over the past 10 years, as this was the last set of annual accounts reviewed by PwC.
On behalf of all the members of the board of directors, I would like to congratulate Lard Friese, Corien Wortmann-Kool, Caroline Ramsay, and Thomas Wellauer with their respective re-elections. Furthermore, I would like to congratulate Albert Benchimol with his election to the board of directors. Congratulations and welcome. We look forward to having you on board. As a last note before officially closing this meeting, I want to take a moment to express our deepest gratitude to our esteemed CFO, Matt Rider, who has announced his retirement as per September 1st, 2024 , after seven incredible years with our company. Throughout his remarkable tenure, Matt has been the cornerstone of our financial strategy, guiding us through numerous pivotal organizational milestones with remarkable insight, dedication, and unwavering commitment to excellence.
Improve external disclosures to our analysts and investors, leading the implementation of IFRS 17, and his involvement in the a.s.r. transactions are just examples that come to mind. What sets Matt apart as a CFO was his clear and transparent communication, and his exceptional ability to make the most complex financial concepts understandable for all of us. Beyond his professional expertise, Matt is an appreciated colleague. During his time with Aegon, he brought a motivational working atmosphere and joy to our organization and his team because of his intellect, hands-on approach, kindheartedness, and his great sense of humor. Despite being soft-spoken, his own presence has always been impactful, leaving a mark on all of us.
Thank you. Thank you very much.
There'll be this will be the first of many farewell celebrations, but I do wanna thank you, Matt, for your countless contribution and everything you've done for us, and wish you all the success in the future. Ladies and gentlemen, this concludes Aegon's 2023 Annual General Meeting of Shareholders. On behalf of the board of directors, I would like to thank you very much for your continued support and your active participation prior to and during this meeting. I look forward to seeing you again next year. I now close this meeting.