Good morning and welcome everyone. I'm Dan Amos, Chairman and CEO of Aflac Incorporated. I'd like to call the 2021 Annual Shareholders Meeting of Aflac Incorporated to order. As you know, due to COVID-nineteen, we're conducting a virtual shareholders meeting. Taking the health and well-being of all of our shareholders, employees and policyholders into account, the Board of Directors made the decision to hold this year's shareholders meeting in this format while affording shareholders the opportunity to participate.
We certainly miss seeing you in person this year. I've asked Audrey Boone Tillman, Executive Vice President, General Counsel to begin our meeting with an invocation. Audrey?
Good morning. I invite you to pray with me. Father God, we thank you for this day and in this season, we don't take for granted that we are here another gathering in another year and so we thank you And we thank you for this company, for all the good that it does and for the privilege and the honor of being here and being associated with this wonderful team, this wonderful organization. And we ask blessings upon the leaders that you will grant us wisdom and insight as we lead this organization in ways that are pleasing to you. And I ask this in Jesus' name, amen.
As is the custom, we will conduct the business portion of our meeting first, then I will provide some closing remarks. We plan to answer any questions at the end of the meeting. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible. We are also joined here today by KPMG, our independent auditors, who will be available during the meeting to respond to appropriate questions. The first item of business to come before this meeting is the report of the Inspector of Elections.
I will call upon the Secretary of the company, Mr. Matt Lowdermilk, for that report.
Thank you, Mr. Chairman, and good morning to our fellow shareholders. Mr. Chairman, the oath of Inspector of Election of this meeting is hereby submitted for the record. Inspector of Election appointed by the Board of Directors for this meeting is a representative of Broadridge Financial Solutions Inc, Belinda Massafra.
The appointee has sworn to faithfully execute the duties of Inspector of Election at this meeting with strict impartiality and according to the best of her ability. The inspector reports that there are present by a proxy sufficient number of votes to constitute a quorum.
I hereby declare a quorum present and this meeting duly constituted and open for business. The polls are open for any shareholders who have not voted or wish to change their vote. They may do so by clicking on the voting button on the web portal following the instructions there. Shareholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action. Mr.
Secretary, please present the items of business to be considered.
Mr. Chairman, we have 3 proposals to vote on this morning as described in detail in this year's proxy statement. The first item of business is to consider the proposal naming 11 nominees to be elected as directors for the coming year. It is my privilege to again introduce the Director nominees for election to hold office until the 2022 Annual Meeting of Shareholders or until their successors are duly elected and qualified. Mr.
Daniel P. Amos, Mr. W. Paul Bowers, Mr. Toshihiko Fukuzawa, Mr.
Thomas K. Kinney, Ms. Georgette D. Kiser Ms. Carol F.
Lloyd Mr. Nobuchika Mori Mr. Joseph L. Moskowitz Doctor. Barbara K.
Romer, Doctor. Catherine T. Rohrer and Doctor. Melvin T. Stead.
The second item of business is to consider and approve the following advisory proposal. Resolved on an advisory basis, the shareholders of Aflac Incorporated approve the compensation of the named executive officers as described pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis and accompanying tables and narrative in the notice of 2021 Annual Meeting of Shareholders and proxy statement. And the final item of business is the ratification of the selection of KPMG LLP as independent registered public accounting firm for the company for the year ending December 31, 2020. The Board has recommended that shareholders vote for each of the foregoing proposals. Under our bylaws, the deadline for submitting a director nominee or any other shareholder proposal has passed and no other nominations or shareholder proposals were submitted.
Therefore, these three items of business are the only matters that we will consider at this meeting.
Now that everyone has had the opportunity to vote, I cast all votes authorized by the proxy in favor of these three proposals. I hereby declare the polls for the 2021 Aflac Incorporated Annual Shareholders Meeting closed. Mr. Secretary, do we have the preliminary voting results?
We do. At this point, the vote has been tabulated and I will report the preliminary results for the 3 matters being voted upon. Each of the eleven nominees for Director has received votes cast for election by a vast majority and are hereby elected. The non binding advisory vote on compensation of the company's named executive officers as determined by the compensation committee has been approved by a vast majority of the votes cast. And the appointment of KPMG as the company's independent registered public accounting firm for 20 21 has been ratified by the shareholders by a vast majority of the votes cast.
This proposal has been approved. These preliminary voting results are subject to final tabulation and to verification by the Inspector of Election. We will report the voting results in a current report on Form 8 ks filed with the SEC no later than May 7, 2021. Mr. Chairman, that concludes all items of business to properly come before this meeting.
Thank you, Mr. Secretary. There being no further business to come before the meeting of the 2021 Annual Meeting of Shareholders of Aflac Incorporated is now adjourned. Now I will give a brief presentation and answers and questions that you may have related to today's meeting. Before I begin my comments, today, as in the past, I'm required to go over the Safe Harbor provisions.
Some statements made are forward looking within the meanings of the federal securities law. Although we believe these statements are reasonable, we can give no assurance that they will prove to be accurate because they are prospective in nature. Actual results could differ materially from those we discuss today. Please look at your annual report on the Form 10 ks for some of the risk factors that could cause results to differ materially from those we discuss today. The latest earnings release is available on the Investors page of aflac.com and also includes reconciliations of certain non GAAP measures.
I invite you to visit the investors ataflac.com to review that release and the related materials, including the replay of the Q1 earnings teleconference call. Now again, good morning and thank you for joining us. 2020 was a year that reshaped our world and impacted us in ways we could not have fully anticipated. Our thoughts and prayers continue to be with everyone affected. Last year at this meeting, we were in the early stages of the pandemic.
I shared with you our actions that we had taken to ensure that we protect our employees, distribution partners, policyholders and communities. In addition, we had taken the precaution to hold a virtual meeting to protect you, our shareholders. While I miss seeing you, I'm proud of our response and ability to adapt so well to what has been a very challenging time for everyone. This people first focus is an essential element of the Aflac Way, which is set of principles that conveys who we are as a company. Through it all, we have continued to live up to our promise to be there for our policyholders when they need us most.
Despite the uncertainty brought on by the pandemic in 2020, we generated strong adjusted earnings per share in 2020. We continue to focus on controlling what we have the ability to control and continually monitoring the items we don't have the ability to control. This will allow us to respond in the most effective way possible. Coming off a solid financial Q1 of this year, we are continuing to find ways to adapt. While earnings are off to a strong start for the year from a financial standpoint, keep in mind that they are largely supported by a lower benefit ratio.
Pandemic conditions in the Q1 continued to constrain our sales results, both in the United States and in Japan, as well as our earned premium and revenues. We continue to expect pandemic conditions to improve in the second half of the year as communities and businesses open up, permitting more face to face interactions. We're encouraged by the production and distribution of COVID-nineteen vaccines, but we also understand that vaccination efforts are still in the initial stages in many places around the world. In the meantime, we are cautiously optimistic, but remain vigilant due to the uncertainty caused by the emerging variants of the virus and the intermittent spikes infections in various parts of both the United States and Japan. As we look ahead, we are focusing on how we are positioned operationally as we gradually approach a return toward normalcy.
Looking at our operation in Japan, sales were essentially flat for the Q1 with the launch of our new medical product, offset by continued pandemic conditions. While we continue to navigate evolving pandemic conditions in Japan, we expect continued strength in medical sales. In addition, Japan Post Group's announcement to resume proactive sales in April paves the way for gradual improvement in Aflac's cancer insurance sales in the second half of the year. We are actively working with Japan Post Group to ready the platform, recognizing that it will take time to return to full strength. In the United States, sales are improving, but we are down 22% versus the Q1 of 2020, which had yet to reflect the full effect of the pandemic.
Small businesses are still in recovery mode, and we expect that they will be for most of 2021. At the same time, larger businesses remain focused on returning employees to the work site rather than modifying the benefits for their employees. We have provided our career agents and brokers with the tools that they need to reach their customers and the comprehensive product portfolio that fits their clients' needs. As a result, we expect better sales in the second half of twenty twenty one as we build toward pre pandemic levels. However, there are certain key strengths of our business that position us well for the recovery.
As a market leader in both countries, we have a solid business model that combines a powerful brand and product innovations. This is supported by extensive distribution network, solid underwriting and customer centric focus. From a sales perspective, we view the challenges posed by the pandemic to face to face sales as a near term headwind. Our model is supported by high quality, diversified portfolio that operates within the parameters of the strategic asset allocation and strong risk management framework. In addition, our model has generated consistent earnings and cash flows to the holding company and contributed to our strong capital and liquidity position.
As always, we remain committed to prudent liquidity and capital management. We ended 2020 with nearly $4,000,000,000 of cash at the holding company, which was nearly $2,000,000,000 above the minimum balance that we'd like to keep. In March of this year, we issued our 1st sustainability bond and we seek to allocate $400,000,000 from that issuance to reinforce our commitment to social and environmental initiatives. This issuance was well received by the market as was our message of balancing profit and purpose. As a result, we maintained a strong liquidity profile at the end of the Q1 of 2021.
We believe our capital position by any measure remains robust given our risk profile and we continue to have among the highest return on capital and lowest cost of capital in the industry. We place significant importance on continuing to achieve a strong risk based capital or RBC and a solvency margin ratio or SMR on behalf of our policyholders and our shareholders alike in the United States and in Japan. When it comes to capital deployment, we pursue value creation through a balance of actions, including growth investments, stable dividend growth and disciplined stock repurchase. We treasure our 38 year track record of dividend growth and remain committed to extending it, supported by the strength of our capital and cash flows. Fortunately, we entered this pandemic in a very strong capital and liquidity position, which allowed us to tactically repurchase $1,500,000,000 or 37,900,000 shares of our stock in 2020.
Through a combination of dividend and share repurchase, we returned about $2,300,000,000 to our shareholders in 2020. In 2021, we remain in the market repurchasing shares with a tactical approach focused on integrating the growth investments we have made with the platform. By doing so, we look to emerge from this period in continued position of strength and leadership. While 2020 was a year filled with unrivaled challenges, our belief in fostering and welcoming all forms of diversity and viewpoints in our operations remains unchanged throughout our workforce, management team and in composition to our Board. This further demonstrates our commitment to one of the Aflac Way's most central tenants, treating everyone with respect and care.
Not only is this the right approach to take, but it enhances our ability to respond to all of our constituents and live up to the commitments we make to our customers, to our fellow employees and to all the people who rely on us. I don't think it's coincidence that we have achieved success while focusing on doing the right things for our policyholders, shareholders, employees, sales distribution, business partners and communities. I'm proud of what we've accomplished in terms of both our social purpose, our financial results, which have ultimately translated into strong long term shareholder return. Being true to what our company stands for is just as important as the products and services we provide. We have worked to be a good corporate citizen for decades and beyond.
It's the right thing to do and that is what we stand for. We have captured our actions in our Corporate Social Responsibility Report for more than 10 years and will do so in our Integrated Business and Sustainability report at esg.aflac.com. This commitment extends to our outreach into the communities in which we do business and operate. It takes shape in various ways within the Aflac family, but most prominently in our dedication to children facing cancer and their families. In addition to marking our 65th year since Aflac Incorporated's founding, the Aflac Ducks' 20th birthday and 2020 marks the 25th anniversary of our partnership with the Aflac Cancer and Blood Disorders Center of Children's Healthcare of Atlanta.
It also marked the 2nd full year in the U. S. And the 1st full year in Japan of My Special Aflac Duh. This smart and comforting social robotic companion uses interactive technology to comfort and bring joy to children facing their treatments. My special Aflac Duck is a symbol of our company that people can touch and feel.
It demonstrates the compassion of our brand and helps people tangibly understand the kind of company we are. As evidenced by our engagement with our shareholders and our stakeholders, environmental social governance or ESG continues to be a key area of focus for investors. Over the past year, investors have shown increasing interest in climate change, diversity and inclusion. We have embraced both of these topics for decades, long before it was common industry practice to do so. Our work to date has paved the way for what we believe is helping make a direct and measurable positive impact on society and the environment.
In response to investors' feedback, we have demonstrated our commitment to these principles by incorporating these ESG factors into a modifier for all of our officers' management incentive program. We have proven that you can achieve strong financial results and do the right thing. I have emphasized this many times and it is a message I want to continue to convey. Ultimately, we believe this is a more sustainable approach to business that will continue to increase shareholder value. By remaining disciplined and focusing on doing what we do best, I believe we will continue to generate strong results that will build long term shareholder value.
Let me say that I recognize that most people do not purchase stock based on social responsibilities. You purchase a stock because it is an investment you believe will generate a good long term return. In fact, Aflac Incorporated has done that. At the end of August 1990, Aflac stock was $0.95 a share. Now think about that, dollars 0.95 a share.
At today's market, we have outperformed the major indices by 6,000 percent through the end of March. By investing in Aflac, you've also been involved with a socially responsible company that has truly helped make a difference in so many lives. That to me is what makes Aflac such a great company. Thank you and God bless. Now we'd like to open things up for shareholder questions.
Mr. Chairman, we have received a few germane questions through the portal for this meeting. First, we received several questions related to voting rights legislation, representing all sides on the key issues, including the general role of the corporation and more specifically Aflac. What is Aflac Incorporated's view?
Well, Matt, thank you. Aflac Incorporated has a long history of supporting fairness and justice. We remain committed to the ease of access and building confidence in and the transparency of the voting process. We believe in the democratic process, which requires engagement and constructive dialogue. To that end, we will continue to participate in the process to preserve the interest of Aflac, our policyholders, our shareholders, our employees and other stakeholders.
Mr. Chairman, we also received a question related to women on the Board. The question is, what are you doing to increase the number of women on the Board of Directors?
Well, we're extremely proud of our Board of Directors and the diversity on it. Today, 36% of the members of Aflac's Board are women, which makes Aflac a leader in the Fortune 500. Last week, Forbes Magazine came out with its best companies for diversity and we were number 9 out of 500 corporations. In addition to the Board, our management team has great diversity. We have Audrey Tillman, our Executive Vice President and General Counsel.
We have Theresa White, President of Aflac US. We have Virgil Miller, President of our Group and Individual Business. And we have Shannon Wach as our Senior Vice President and Chief Marketing Officer. And finally, we were the 1st financial services company to promote a woman to an officer position in Japan. So yes, we are definitely a corporation of inclusion, starting with the Board, and we continue to look for smart people that can help fill the role of instructing us at the Board level.
Mr. Chairman, we also got a question directed at you. How long does Mr. Amos envision remaining CEO of
Aflac? Well, time has sure flies and flown and I cannot believe how long I've been here now going on 31 years. But I will tell you that I'm just as enthused today about the business as I was 31 years ago. And I have no plans for retirement in the near future. But my role as CEO now is more than just being CEO.
My role is to help the Board of Directors in finding succession for myself and a lot of other key people in the organization. So at our August Board meeting every year, we review all the key officers. And what I will tell you is we have a great team And I believe we will have the person that will take my place and will do an outstanding job in the future. But in the meantime, don't count me out because I still plan on being around.
Thank you, Mr. Chairman. We also received a few technical questions and some that were unrelated to the business of this meeting. If any questions were submitted and not addressed, we will follow-up after the meeting with the shareholder directly. Please also keep in mind that our Investor Relations team is available to take any questions you may have at 706 596-3264.
Well, thank you, Matt, and thank all of you for attending today. Please stay safe. This meeting is now adjourned.