Good morning. Thank you for joining us today, and welcome to our 2013 annual shareholders meeting. I'm Jim Cracchiolo, Chairman and Chief Executive Officer of Ameriprise Financial. Tom Moore, our Corporate Secretary and Chief Governance Officer, is with me to conduct our meeting today. Let's get started, Tom.
Thank you, Jim. The Board of Directors has appointed The Carideo Group Inc. as Inspector of Elections for this meeting. Ms. Janice Dryman, the representative of The Carideo Group, has subscribed her oath of office and filed it with me. The Board of Directors has fixed February 28th, 2013, as the record date for determining the shareholders entitled to notice of and to vote at this annual meeting. Mr. Chairman, I present the following documents. A certified list of the holders of the common stock of the company as of the close of the record date of February 28th, 2013. This list has been prepared by Computershare Trust Company, National Association, the company's stock transfer agent and registrar.
An affidavit of Ms. Sally Lent, an employee of Broadridge Financial Solutions, as to the distribution beginning on March 13th, 2013, to our shareholders of record as of February 28th, 2013, of a notice regarding the availability of proxy materials for the shareholder meeting to be held on April 24th, 2013, or paper copies of the proxy materials. The notice informed our registered shareholders of the availability online of the notice of meeting, the proxy statement for this meeting, and the 2012 annual report to shareholders. Shareholders were also informed how to obtain these proxy materials in paper form or by email at no charge. The notice disclosed the date, time, and location of this meeting, as well as the items to be voted on. Copies of the proxy materials have been posted on the internet and provided in paper form to those shareholders who requested them.
I will file these materials with the minutes of this meeting. Jim?
The Inspector of Elections has reported the existence of a quorum, so we'll proceed with the business of this meeting. I now call the meeting to order. Let me begin first by please helping me introduce my colleagues on the board of directors who are here with us today. We could not be a strong company without their committed and steady stewardship. I ask you to please hold your applause until after I've requested all our directors to stand. Please remain standing until I've introduced all of you. Siri S. Marshall, Lon R. Greenberg, Warren D. Knowlton, W. Walker Lewis, Jeffrey Noddle, H.J. Sarles, Robert F. Sharpe, Jr., William H. Turner. In recognition of their efforts on behalf of Ameriprise and our shareholders, please join me in giving our board a warm and welcome deserved round of applause. Thank you.
Next, I would ask the members of the executive leadership team of Ameriprise Financial to please stand. The board and I rely upon your expertise, your unique experience and passionate leadership. Please join the board and me in giving my ELT colleagues a round of applause for their many contributions to our success. I'll now turn it back to Tom for the statement of order of business and the opening of the polls. It's all yours, Tom.
Thank you, Jim. To ensure the orderly conduct of the business of this meeting, the board of directors has adopted the order of business set forth in the agenda provided to each person as he or she entered. Accompanying the agenda are the meeting procedures approved by the board of directors. We ask that, in fairness to all shareholders attending this meeting, you please honor these rules. The four items of business to be presented at today's meeting are as follows. First, the election of nine directors to serve until the company's 2014 annual meeting or until their successors are elected and qualified. Second, a non-binding advisory vote to approve the compensation of the named executive officers. Third, the ratification of the audit committee selection of PricewaterhouseCoopers as the company's independent auditors for the fiscal year ending December 31st, 2013. Finally, a shareholder proposal relating to supermajority voting rights.
The company has not received from any of its shareholders as required under its bylaws of any other matter to be considered at today's meeting, and therefore, no other proposal or nomination may be properly introduced by shareholders. On behalf of the chairman, I now declare the polls open for voting at this annual meeting. If you wish to vote at the meeting and have not yet done so, you may deliver your ballot to the Inspector of Elections. Inspector, please stand in order to identify yourself. If you need a ballot, the inspector can give you one. The polls will remain open until immediately after any discussion of today's proposals.
To promote the efficient conduct of the meeting, the chairman has waived the formalities of requesting motions and seconds from the audience and has declared the order of business as stated in the agenda to be accepted by those present in the meeting room. Each of the following proposals is described in the company's proxy statement dated March 8, 2013. The first three proposals are presented at this meeting by the board of directors. The fourth proposal relating to supermajority voting rights has been submitted by Mr. John Chevedden, acting as the representative of Mr. Kenneth Steiner, one of our shareholders. The first proposal is the election of nine directors. As we explain in our proxy statement, this is the first year that all of our director candidates will stand for election or re-election at the same meeting for one-year term.
Our classified board structure has been phased out over a three-year period, beginning with our 2010 annual meeting. Our shareholders at that meeting approved a management proposal to amend our certificate of incorporation for this purpose. Therefore, Mr. Cracchiolo and each of the other eight directors named in the proxy statement, and whom Mr. Cracchiolo introduced to you earlier in the meeting, are standing for re-election, each to serve until our 2014 annual meeting. The second proposal is a non-binding advisory vote to approve the compensation of the named executive officers. The named executive officers are those officers identified in the compensation disclosure tables, including in the proxy statement for this meeting. This vote, commonly called a say on pay, is required by federal law for large public companies.
At our 2011 annual meeting, the shareholders strongly supported the board's recommendation that a non-binding advisory vote to approve the compensation of the named executive officers be held annually. As a result, you'll again have the chance to vote on this proposal at our 2014 annual meeting and at each annual meeting through our 2017 annual meeting. At the 2017 annual meeting, you will have another opportunity to vote on how frequently you would like this proposal to be presented to shareholders. The third proposal seeks ratification of the audit committee's selection of PricewaterhouseCoopers as the company's independent auditors for the fiscal year ending December 31, 2013. The fourth and final proposal relates to a supermajority voting rights matter and is set forth on page 32 of our proxy statement.
The proposal is being submitted by Mr. Kenneth Steiner, a fellow shareholder, and we have received notice that Mr. Steiner will be represented at this meeting by Mr. Gerald Carlson. Mr. Carlson, would you please stand and wait for a microphone to be brought to you?
Thank you.
Thank you, Mr. Carlson. Good day and welcome. Please present the proposal of Mr. Steiner and in accordance with the rules established by the Board of Directors for the meeting, please limit your presentation to no more than five minutes. After your presentation, we will allow time for other shareholders to ask questions regarding or offer comments on Mr. Steiner's proposal. Mr. Carlson, please proceed.
Thank you. Resolve. Shareholders request that our Board take such steps necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be eliminated and replaced by a requirement for a majority of the votes cast and against applicable proposals or a simple majority in compliance with applicable laws. If necessary, this means the closest standard to a majority of votes cast for and against such proposals consistent with applicable laws.
Thank you, Mr. Carlson. Do any other shareholders or proxies for shareholders have any questions for Mr. Carlson regarding this proposal? If not, thank you, Mr. Carlson.
Thank you.
Now we will proceed with voting on each of the proposals I've described. The votes required for each proposal to be approved are described in the chart provided on page three of our 2013 proxy statement. We will close the polls immediately after any discussion on these proposals. If you wish to vote and have not yet done so, now is the time to return your proxy card or ballot to the Inspector of Elections. If you previously returned a proxy card or voted by means of the internet or telephone and do not wish to change your vote, you do not need to vote at this meeting.
If you have not yet turned in a proxy card or if you are a shareholder of record and you wish to vote your shares in a manner different from that you have indicated, please raise your hand so that you can be given a ballot. We will provide the opportunity following the chairman's remarks for shareholders to raise questions not related to the proposals being voted on today. As we detail in our proxy statement, the audit committee of the board of directors approved the engagement of PricewaterhouseCoopers for the 2013 fiscal year, subject to ratification by our shareholders. I would ask Mr. Bateman of PricewaterhouseCoopers to please stand and be recognized. Before I declare the polls closed, are there any questions for Mr. Bateman regarding PricewaterhouseCoopers' engagement? Thank you, Mr. Bateman.
If there are any questions regarding the voting procedures or if any shareholder wishes to comment on or raise any questions regarding the proposals being voted on, please raise your hand now. There being no further discussion of the proposals, we will now prepare to close the polls. Please return your ballots now if you have not already done so. On behalf of the chairman, I now declare the polls closed. While we're waiting for the inspectors' voting report, I'll turn it back to our chairman for his report on the state of the business. Jim?
Thanks, Tom. I'm proud to announce that 2012 was another successful year for Ameriprise Financial. The year was marked by measurable progress as we worked to execute our strategy and strengthen our standing in the marketplace. We've built a terrific company with unique capabilities, a diversified retail financial services leader. We have delivered a superior return, all while investing for growth and maintaining the strength of our financial foundation. The economic and market environment is always an important backdrop to consider when viewing our results. Last year, the U.S. and global economy struggled to gain solid footing before showing signs of improvement in the latter part of the year. While equity markets were volatile during the year, they finished stronger. Short and long-term interest rates were at generational lows.
We have two key drivers of our business that we're focused on for growth, wealth management and asset management, and we've demonstrated solid earnings growth and increased profitability. Our insurance and annuity businesses complement our growth platforms. This is all in line with our mission to help people feel confident about their financial future. Our focus on helping our clients succeed empowers our company to succeed. We've accomplished many things and we're well-positioned for continued progress. Why? Because there are two forces shaping and redefining the global financial services marketplace. First is the large opportunity to serve the needs of the mass affluent and affluent, as well as baby boomers as they transition to retirement. Second, the global asset management opportunity. Ameriprise is positioned to capture a share of both. In 2012, we made significant progress across the firm.
We're the leading financial planning firm in the country and have the fifth-largest branded advisor network. We continue to enhance our products and capabilities to serve our clients' needs, and we make it easier for our advisors to do business. This includes the addition of our managed account product suite, an enhanced online presence, and a powerful new brokerage platform. In fact, the installation of our brokerage platform was one of the most substantial technology endeavors that we've undertaken, and we executed it very well. We also continue to invest in the Ameriprise brand with new television advertising with award-winning actor Tommy Lee Jones. It captures the American spirit and conveys the benefits of working with an Ameriprise advisor. Among our advisors, we continue to earn very high satisfaction, and our retention rates are above 95% for our most tenured and productive advisors.
They value the tools, the support, and collaborative culture we've built together. Over the past few years, we have enhanced our advisor recruiting methods to focus on experienced advisors who have strong practices. Ameriprise ranked fourth of 25 firms in a recent Cogent survey that ranks firms as an attractive destination for breakaway advisors. Last year, 382 experienced advisors joined Ameriprise. Let's look at the overall results. In 2012, Ameriprise client assets grew to a record $353 billion, and advisor productivity reached an all-time high. We strengthened our position as the leading mutual fund wrap provider with sustained net inflows on our platform. As our clients build their wealth and work towards a stable and secure retirement, their focus evolves from accumulation to preserving their hard-earned income for retirement. Through our annuity protection and risk management capabilities, we have proven product solutions to address important client needs.
Last year, we introduced a new variable annuity product that helps clients manage and navigate equity market volatility. This year, we'll be expanding the managed volatility product line even further. In terms of insurance, on the life and health side, we've built a sizable business with $191 billion of life insurance in force. We've experienced consistent growth in indexed universal life insurance sales and a pickup in variable universal life sales getting stronger as the year went on. In auto and home, we generated steady increases in policies and premiums. However, the earnings were muted given the difficult storm environment. Now let's move to asset management. We have two complementary platforms in Columbia and Threadneedle. Combined, we manage $455 billion in assets and have earned leading positions in the U.S. and U.K. and expanding distribution in Europe, Middle East, and Asia.
We're well-positioned with a strategic balance of equity and fixed income assets, broad capabilities, and improving distribution. We have excellent investment talent. We've generated consistent competitive investment performance last year. At year-end, 111 of our funds were rated four or five stars by Morningstar, and we won more than 40 Lipper awards across equity and fixed income categories in the U.S. and Europe. We're also diversifying our asset base and growing earnings. Like many firms in the industry, we experienced net outflows last year. However, our flows reflected unique characteristics of our previous acquisitions and former parent relationships. Everyone on the team is committed to driving consistent positive net inflows as we move forward. We have a strong foundation and are building on it with a focus on consistent, measurable results. We completed the integration of Columbia and are moving forward.
Our retail and institutional product lines are broad. They include strong performance across equity and fixed income. We've committed to building a good presence on key distribution platforms and strengthening relationships with important intermediary and institutional gatekeepers. We're building new products and improving existing ones to compete more effectively in key growth areas such as emerging markets, asset allocation, and global. As we look ahead, we intend to organize the strength of Columbia and Threadneedle to take an even stronger position in the global marketplace. Now let me turn to our business lines, to all of the core capabilities that support them and underpin the strength of our financial foundation, our expense management, our re-engineering, and our balance sheet. We continue to manage expenses effectively, offsetting the impact of lower interest rates on our spread revenues.
We also executed meaningful re-engineering initiatives, which helped to improve profitability, ensure that we could continue to make significant investments in our business. In fact, we well exceeded our goal, delivering $278 million in savings, and were able to reinvest the majority of this savings back into the business last year. With regard to our balance sheet, it's extremely healthy and a key differentiator for us. We have more than $2 billion in excess capital, strong ratings, good liquidity levels, and a high-quality investment portfolio. We're also committed to returning capital to you. Let me share how we're doing this. Last year, we returned $1.7 billion to shareholders, devoting $1.3 billion to share repurchases and increasing our dividends paid per share by 64%. What does that mean? Well, today, our dividend yield ended the year at about 3% and put us in the top quartile of our peer group.
For the second year in a row, we committed more than 130% of our operating earnings to shareholders. We're able to commit this level of return because of the strength of our cash flow that we generate across our operating businesses and the steps that we've taken to reduce our capital requirements, as well as manage our risk. This included our decision last year to exit the deposit-taking and credit-originating activities of Ameriprise Bank. We managed the transition well, which allowed us to free up capital that we'll return to shareholders this year. In addition, we're looking to continue to return over 100% of earnings again this year to shareholders, plus the additional capital freed up in the bank. Overall, our operating return on equity reached a high of 16.2% at year-end.
With our financial performance and capital management, I'm confident that we'll be able to make and take this return even higher this year. We've built a business that generates a good mix of earnings. We're growing the revenue and profitability of our growth segments of wealth management and asset management while generating excellent returns in our annuity and protection businesses. As I mentioned in November at our financial community meeting, as we grow the business, we plan to generate more of our revenues and earnings from these growth segments, and we're making good progress. In 2008, 30% of our operating earnings were from advice in wealth management and asset management. Last year, they accounted for 51%, and we plan to increase it to more than 60% over time. Investors recognize the strength of our results and the opportunity we represent.
The total return of Ameriprise Financial common stock increased nearly 30% last year. For the past several years, and again this year, we've outpaced the total return of the S&P Financials Asset Management and Life Indices. As we move to 2013, we released first quarter earnings on Monday and had a very good start to the year. On an operating basis, net revenues grew from strong Ameriprise client flows and activity and good equity markets. We benefited from our expense discipline with solid improvement and profitability in our growth businesses. Our capital management initiatives helped drive strong EPS growth and a higher return on equity. We announced an increase in our regular quarterly dividend, raising it another 16%. As I look to the future, I'm excited about the opportunities before us. Our clients work with us because we bring valuable perspective, broad capabilities, and a long-term commitment.
They want advice and solutions tailored to their particular goals, and above all, they want results. This is an ideal time for Ameriprise. Our reputation is not just well-known, but what's most important, it's trusted. Our capabilities are broad, relevant, and continually improving. Our financial foundation is stable, sound, and secure. The values that have long guided our firm remain as important today as any time in our history. In fact, I'm pleased to note that last year, Ameriprise was named to The Civic 50, a list of companies that are committed to their communities. We also conducted one of the most successful employee giving campaigns, and we continued our important charitable partnership with Feeding America. In closing, I'd like to thank our employees and advisors for their dedication to our company and commitment to our clients.
We consistently rate above industry averages for employee engagement and satisfaction, we truly do appreciate all that you do for Ameriprise. I'd also like to thank my fellow directors for their support and their counsel. Finally, thank you, our investors, for the trust and confidence you have in Ameriprise. We will continue to work to reward it. With that, I'd like to now turn it back to Tom.
Thank you, Mr. Chairman. The Inspector of Elections has handed me a preliminary report showing that the proposals presented at today's meeting, including the election of each incumbent director to serve until the 2014 annual meeting of shareholders, have each received the required number of votes to pass. The chairman will now welcome any questions or comments from our shareholders. We ask that you please observe the meeting procedures in the agenda, including the time limit for questions. Please raise your hand and we will bring a microphone to you. Please state your name and city of residence and indicate whether you are a shareholder or a proxy for a shareholder. You may ask a question or offer a comment only if you are a shareholder or a proxy for a shareholder.
If you have a question or concern that is not relevant to the interest of all shareholders, please see one of the attendants in the back of the room and he or she will be happy to help you. With that, I'll turn it over to our chairman, who will open up the meeting for shareholder questions and comments. Jim?
Okay. Are there any questions or comments?
Yes, over here.
They're bringing a microphone.
My name is Steve Peterson. I'm a shareholder. I live in Minneapolis. Thank you for that comprehensive report and congratulations on another good year. I don't think a shareholders' meeting should be complete without at least one question from the shareholders. I have two. Aside from increasing dividends and share repurchases, do you have any other plans for the use of the capital that the cash that you have so prodigiously provided the company? Second, with respect to inflows and outflows from the mutual funds, is there any way to characterize the entities or the individuals that are drawing their funds out or putting their in?
Very good. On the first question, we continue to manage our balance sheet very conservative by holding a certain amount of excess capital so that we can deal with any environmental challenge that may come along, and market volatility, as you know, we have experienced over the years. Having said that, we have about $2 billion of excess. What we've been doing a bit more over time is returning a bit more of that through dividends and buybacks to shareholders. The reason we're able to still maintain a large portion is because over time, we've freed up more capital based on how we've been managing the business and transitioning our growth activities to less intensive capital activities. Over time, as you're aware, we actually do acquire some other companies. We acquired Seligman and Columbia in the asset management. We acquired H&R Block Financial Advisors.
From time to time, we look at opportunities in the marketplace to use our capital for acquisition. We will continue to look in the marketplace for appropriate and strategic additional capabilities. When we do not find them, we'll continue to return to shareholders as we've been doing today. In regard to your other question regarding the outflows that we've experienced, it's a combination of factors. The one that's the largest is, we have acquired businesses. Threadneedle was acquired from Zurich Financial, and they had a very large installed insurance book. Many of those activities are a little in the closed area, we'll just continue to experience some of the outflows. We have a very good relationship with them. We continue to invest in that relationship. However, based on the assets that are currently in those relationships, it's in a natural outflow situation.
The same thing a bit with the acquisition of Columbia from Bank of America. There is a number of ex-parent activities and affiliated activities that over time will run their course and present us with a level of outflows. When we acquired Columbia from Bank of America, we understood that. It's similar to Ameriprise having a proprietary business in mutual funds, that when we opened our platform more, et cetera, we experienced a level of outflows. It took us over time to build some of the third-party activities to offset that. The way we're going to move the business to inflows will be to expand our third-party distribution in both retail and institutional, both here in the U.S. and globally. We've been making excellent progress at Threadneedle, and we're still at the early stages at Columbia, but we have expanding and improving distribution in these platforms.
Over time, we think that we can get the system into a total inflow situation. Any other questions or comments? Okay. Without any further questions and comments, Tom, I'll turn it back over to you.
Thank you, Jim. That concludes the official business of the meeting. On behalf of the chairman and the board of directors and our officers, employees, thank you for attending the annual meeting and for your support of our company. Jim, anything else that you'd like to add?
On behalf of the Ameriprise Board of Directors and its officers and employees, I thank you again for your attending our annual meeting and your support of our company. We look forward to seeing you again next year. Thank you.