Morning, ladies and gentlemen. My name is Joe Echevarria, Chair of the Bank of New York Mellon Corporation Board of Directors. We are very pleased that you're able to join us this morning for our 2024 annual meeting of the stockholders. As Chair of the Board of Directors, I will preside over the meeting. As a reminder, this meeting is being recorded. No one attending is permitted to use any audio or video recording device. Let me provide an overview of how our meeting will proceed. First, I'll call the meeting to order. Then I'll turn the meeting over to our President and Chief Executive Officer and fellow member of the board, Robin Vince. Robin will make introductory remarks, go over some procedural matters necessary for our corporate record keeping, and introduce the formal business of the meeting, including the five items on our agenda.
He will then pause for questions and open the polls for voting on those five items. After the polls are closed, our Corporate Secretary will report on the voting results. Following that, I'll adjourn the meeting and Robin will take general questions from the stockholders. I'll now call this meeting to order and turn it over to Robin.
Thank you very much indeed, Joe. Thank you to our stockholders who are joining us this morning. We're very pleased to welcome you in person today. 2023 was my first full year as the CEO of BNY Mellon. It's a privilege to lead our company with its proud history, enviable client roster, and central position in the world's capital markets. We were founded 240 years ago by Alexander Hamilton, and BNY Mellon is today a leader in global financial services. We manage, move, and protect nearly $50 trillion in assets for our clients: governments, pension funds, mutual funds, unions, endowments, corporations, financial services firms, and people of the world. This position gives us an unparalleled perspective. Our company touches around one-fifth of the world's investable assets. We help over 90% of Fortune 100 companies and nearly all the top 100 banks globally to access the money that they need.
With this unique position in global markets, our duty extends well beyond ourselves, and we take this responsibility very seriously too. At last year's annual meeting, which took place just weeks after the abrupt failures of certain regional banks, I reflected on the legacy of trust that BNY Mellon has built with clients and the industry over time. Resilience is both the cornerstone of our business and a commercial attribute, both in terms of financial resilience, our ability to support clients with our strong, highly liquid, lower credit risk, and well-capitalized balance sheet, as well as the operational resilience to provide continuity of service to our clients throughout periods of market volatility. I'm proud of how our employees have shown up for our clients and for the industry during the events of last year.
Throughout 2023, we worked hard to improve our financial performance and to lay the foundation for a multi-year transformation of our company. Our financial performance last year demonstrates both our resilience as well as our ability to execute when appropriately organized and focused. Both pre-tax margin and return on tangible common equity improved on the back of significant operating leverage. At the beginning of last year, we communicated three financial goals for 2023. First, we expected to generate approximately 20% net interest income growth year-over-year. We delivered 24%. Second, we set out to halve our constant currency expense growth rate in 2022 to approximately 4% year-over-year expense growth, excluding notable items. We delivered 2.7%. And third, we sought to return north of 100% of earnings to common shareholders through dividends and buybacks. We delivered over 120%.
Over the course of the year, we returned $3.9 billion of capital to common shareholders in the form of buybacks and dividends, including a 14% increase of our quarterly dividend in July of last year. At the same time, we further strengthened our regulatory capital ratios to be well-positioned for a wide range of macroeconomic and regulatory outcomes. While our company has done many things well over time, our long-term financial performance has not lived up to our potential, given the attributes that BNY Mellon brings to the table: industry-leading positions across our businesses, an expansive client set, and an important role in advancing the future of finance. While we are still at the beginning of our journey to unlock the opportunity inside of our firm, early proof points this past year highlight our ability not just to deliver on our commitments, but to exceed them.
This gives us confidence that we can effect meaningful change and consistently improve our financial performance over time. As we execute this work, we introduced three strategic pillars to guide us: be more for our clients, run our company better, and power our culture. These pillars are deliberately simple, and our people are rallying around them. First, be more for clients. Our clients around the world both trust and want to do more business with us. Over the last year, all of our businesses have been innovating and creating new solutions that enable us to deepen our relationships with existing clients and bring in new ones: Wove, Pershing's wealth advisory platform, our buy-side trading solutions offering, Bankify, real-time payments on FedNow, white-labeling LiquidityDirect , intraday repo settlement, BNY Mellon Advisors. These are all examples. In 2023, we filed more patent applications than ever before.
We are also working to enhance the client experience across the firm and bring more of BNY Mellon's platforms to deliver comprehensive solutions to our clients, many of which use us for just a single service. Last year, we hired our first Chief Commercial Officer, who is driving our strategy to deliver a broader range of our capabilities to existing clients, while at the same time pursuing opportunities to grow our client base. Next, run our company better. We're taking important steps to improve efficiency, reduce bureaucracy, and spend smarter so our investments in the business can go further. In 2023, we generated nearly double the efficiency savings of the prior year, which allowed us to make over $500 million of incremental investments. And we laid the foundation needed to transition to a platform's operating model.
Last year, we launched successful pilots in two areas of the organization, and just last month, we went live with the first wave of six client and enterprise platforms. Client platforms will help us to deliver end-to-end commercial products and services to our clients, improving the coordinated development and delivery of products, capabilities, and services for our clients. Enterprise platforms will provide services to internal teams, helping our client platforms deliver a consistent and cohesive client experience by simplifying internal processes and driving efficiency across functions. Third, power our culture. While we focus on being more for our clients and running our company better, we know our people are essential in making that happen. It's important that our employees see BNY Mellon as a place where they are proud to work and excited to grow their careers.
Last year, we introduced enhanced wellness benefits for employees, and we made strides towards elevating recruitment and retention programs with a special focus on early career talent. At BNY Mellon, our scale and significance mean we play an important role in society as we help make money work for the world. Over the course of 2023, we proudly helped communities around the country benefit from the power of our platforms and capabilities. One milestone that I'm especially proud of was our role as the first globally systemically important banking institution to organize a debt issuance that was entirely led by women, minority, and veteran-owned broker-dealers. These broker-dealers, who also happen to be our clients, delivered excellently on a transaction historically reserved only for bulge-bracket firms.
We're also building on the success of our bold share class in investment management, launching SPARK Shares, which give our clients the unique ability now to align their liquidity investments to their philanthropic goals. We're looking at new ways of driving a more sustainable future through the lens of resilience. Looking ahead, now with clearer focus on our objectives and having demonstrated our ability to deliver on our plans, earlier this year, we announced medium-term financial targets for each of our business segments and the firm overall. While we are still early in our journey and humble about the work ahead of us, we are confident that our strategy reflects an ambitious yet achievable plan to increase the financial performance of our company over time. As we celebrate our 240th anniversary, we are excited about the opportunity set ahead of us.
I'd like to thank you not only for your time today, but also for your continued conviction and support of BNY Mellon. With that, I'd like to recognize that we have with us today members of our board of directors as well as our director nominee. Several members of our executive committee are joining us in the front of the room today as well. I would also like to welcome our employees, many of whom are joining us by audio this morning. In addition, Megan Reardon and Jen Stemple of KPMG LLP, representatives from our independent registered public accountants, are joining us today. The proxy holder for this annual meeting is Jean Weng. Our inspectors of election are Michele TerryCabrera and Alina Radeen. Ms. Weng is also acting as secretary for the annual meeting. Ms.
Weng will go over some of the rules and procedural matters, but first a reminder that stockholder questions are welcome, but conducting the business set out in the agenda for the benefit of all stockholders will be paramount. Please reserve any questions or comments on the agenda items for the meeting until after all items have been introduced, and please hold questions of a more general nature until the business of the meeting has been concluded. And now, Jean will go over some of the procedural items.
Questions that do not conform with the rules of conduct. If you need to refer to the rules, a copy of them has been provided with the agenda. In the interest of fairness to all stockholders, these rules will be strictly followed. I will now turn to the formalities of the meeting.
I have in my possession a copy of the notice of this meeting together with affidavits showing that the notice, the proxy statement, and the annual report were duly mailed on February 29th, 2024, to stockholders of record as of the close of business on February 14th, 2024, which is the record day for determining persons entitled to vote at this meeting. In addition, I have in my possession the oaths subscribed to by the inspectors of election. I also have in my possession certified lists of the stockholders as of the close of business on February 14th, 2024. A copy of the list of stockholders entitled to vote at this meeting was available for inspection by stockholders during business hours at the company's headquarters for 10 days prior to the day before the meeting.
The number of votes for which proxies have been received to date totals approximately 89% of the total eligible vote. Accordingly, a quorum is present, and the meeting is duly constituted. Votes represented by proxies received this morning, as well as those to be voted in person, will be included in the inspector's report, which will be filed with the records of the meeting. That concludes my report on the formalities of the meeting.
Thank you, Jean. The meeting is now duly called and organized, and a quorum is present. I will now proceed with the business of the meeting. I have moved all of the management proposals set forth in the proxy statement. We will take questions on the proposals after all of them have been presented.
The first proposal is the election of the slate of 11 directors nominated in accordance with the bylaws as set forth in the proxy statement. The second proposal is an advisory vote for the approval of the 2023 compensation of our named executive officers, as disclosed in our proxy statement. The third proposal is the ratification of the appointment of KPMG LLP as the corporation's independent auditor for 2024. The fourth proposal is a stockholder proposal regarding transparency in lobbying. This proposal is set out in detail starting on page 96 of the proxy statement. Is Mr. Chevedden or his representative in the room? Please state your name, who provided you with the authority to speak on behalf of this proposal. We're just getting a microphone for you. I'm sorry, sir. Thank you so much, Mr. Beatty.
My name is Glenn Beatty, and John Chevedden asked me to represent him here at this meeting.
Thank you, Mr. Beatty. If you could please proceed.
This is proposal four, sponsored by Kenneth Steiner. I move proposal four, asking the Bank of New York Mellon to provide a report on its state and federal lobbying expenditures, including indirect funding of lobbying through trade associations and social welfare groups. Investors are asking companies to disclose all dark money payments to third-party groups that use money to influence policy. BNY Mellon fails to do this. BNY Mellon does not issue a comprehensive report of its own lobbying. The data is scattered among federal and state regulators and is difficult to obtain.
We know that for its direct lobbying, BNY Mellon has spent over $17 million on federal lobbying since 2010, and there is incomplete disclosure about BNY Mellon's spending at the state level, where an expert called this finding information nearly impossible. BNY Mellon is required to report its lobbying and already has this information, so it could easily be provided to stockholders. This proposal seeks full disclosure of dark money payments to trade associations or social welfare groups, where there are no limits on disclosure requirements. BNY Mellon's stockholders face a huge blind spot here. Trade associations spend hundreds of millions to lobby. The U.S. Chamber of Commerce has spent more than $1.8 billion since 1998. BNY Mellon lists memberships in 21 principal trade associations but fails to disclose any of its payments nor the amounts for lobbying.
BNY Mellon belongs to the American Bankers Association, the Business Roundtable, and SIFMA, which spent over $35 million on lobbying in 2023. How large are BNY Mellon's payments, and what amounts were used for lobbying? We don't know, and that's a problem. Many of BNY Mellon's trade association lobbying positions contradict company public positions, resulting in values misalignment and reputational risk. For example, BNY Mellon publicly supports addressing climate change, yet the Business Roundtable opposed the Inflation Reduction Act and its historic investments in climate action. BNY Mellon also fails to disclose its payments to 501(c)(3) and 501(c)(4) social welfare organizations, which also lobby. First Energy's trial regarding $60 million of dark money payments led a prosecutor to note that a social welfare group is a perfect entity to receive a secret bribe.
For example, Center Forward is a 501(c)(4), which has attracted attention for pushing to weaken bank capital requirements and even running Sunday night football ads attacking the Basel III proposal. Does BNY Mellon make contributions to these dark money groups like the Center Forward? Stockholders have no way to know. Lobbying disclosure is a safe mechanism for BNY Mellon, its reputation, and stockholders as what gets disclosed gets managed. Full disclosure of BNY Mellon's lobbying, including all third-party payments, will ensure proper oversight of BNY Mellon's lobbying. The proposal after this proposal, shareholder five, is a black sheep shareholder proposal. I urge stockholders to vote for proposal four.
Thank you, Mr. Beatty. The fifth proposal for a stockholder consideration is a stockholder proposal regarding a report of risks on politicized debanking. The proposal is set out in detail starting on page 100 of the proxy statement.
Is a representative of the American Family Association in the room? I ask again, is a representative of the American Family Association in the room? It does not appear that a representative of the American Family Association is present. I will now ask the corporate secretary to read the resolution submitted for consideration by the American Family Association, which can be found along with a supporting statement on page 100 of our proxy statement. I note, however, that this proposal has not been properly presented by the stockholder proponent, and therefore, we reserve any and all rights under Rule 14a-8.
I will now read the resolution submitted for consideration by the American Family Association. Resolved.
Shareholders request the board of directors of BNY Mellon conduct an evaluation and issue a report within the next year at reasonable cost and excluding proprietary information and disclosure of anything that would constitute an omission of pending litigation, evaluating how it oversees risks related to discrimination against individuals based on their race, color, religion, including religious views, sex, national origin, or political views, and whether such discrimination may impact individuals' exercise of their constitutionally protected civil rights.
Thank you. I'll now take any questions or comments regarding any of the foregoing proposals. As mentioned earlier, please hold any questions of a general nature, such as those related to our business or financial performance, until the appropriate question and answer period after the formal business of the meeting has been completed. If you wish to ask a question, please raise your hand and wait to be recognized.
When recognized, please stand and state your name and whether you're a stockholder of record or hold a proxy for another stockholder. Then proceed with your question or comment, which should be limited to three minutes. A microphone will come to you if you have a question.
Mr. Chairman, my name is Robert Foster, and I represent the Carpenters Union Pension Funds that collectively hold 1,481,984 shares of Bank of New York Mellon. As long-term shareholders, the Carpenters Funds fully support the company's full slate of directors' nominees. My question relates to the directors' I'm sorry. My question relates to the director election resignation governance policy currently in place. The governance policy provides the board complete post-election discretion to determine whether to accept or reject the resignation of an incumbent director who fails to be reelected by majority vote.
Does the full discretion afforded by the board of governance policy determine the status of an unelected incumbent director potentially undermine the core voting rights of shareholders? Thank you.
Thank you for being first of all, thank you for being a stockholder, and we appreciate the support of the Carpenters Union. Ms. Weng, would you maybe answer the question?
Yeah, sure. So under our bylaws and our corporate governance guidelines, we do have the option to determine resignation or not, but we definitely respect shareholders' votes. And so in all cases, we would respect the shareholders' voices.
And I would just add to that by noting that all of our directors received at least 95% support in the prior election, and so we view that as a very strong showing of support by stockholders for our directors.
Thank you. Thanks.
Are there any other questions from stockholders in the room?
Okay. Hearing no further questions on the proposals, I'll now call for a vote. At this time, ballots will be distributed to those persons who are stockholders and who have not already voted or who may wish to change their previously cast vote. Please note that any stockholder who has sent in a proxy card or voted by internet or telephone does not need to execute a ballot unless you wish to change your vote. If you have a legal proxy issued by your broker, please hand it in with your ballot. If you would like a ballot, please raise your hand, and a ballot will be distributed to you. The polls are now open and will remain open until voting has been completed. We have stockholders completing ballots. If there's anybody else who needs a ballot, please do raise your hand.
Are there any registered stockholders who have not turned in their ballots? Seeing no one raising their hand, I hereby declare that the polls are closed on all matters that are being voted on by the stockholders and ask the corporate secretary to prepare her report. Thank you. The inspectors of election have counted the votes cast and have submitted their preliminary report. There were approximately 670,700,000 million shares voted, equal to approximately 89% of the common shares outstanding. Final vote totals for each agenda item will be reported on Form 8-K filed with the SEC. First, as to the election of directors, each director candidate received between approximately 98% and 99% for votes, and as such, the slate of 11 directors has been elected. Second, as to the advisory resolution to approve the 2023 compensation of our named executive officers, approximately 95% of the votes cast were in favor.
The advisory resolution on executive compensation has been approved. Third, as to ratification of the appointment of KPMG as independent auditor for 2024, approximately 98% of votes cast were voted in favor. The appointment of KPMG as the corporation's independent auditor for 2024 has been ratified. Fourth, as the stockholder proposal regarding transparency in lobbying, approximately 38% of the votes cast were voted in favor. The proposal has not been approved. Fifth, as to the stockholder proposal regarding a report on risks of politicized debanking, which was not properly presented, approximately 3% of the votes were voted in favor, and the proposal has regardless not been approved. That concludes the report, and I now turn the meeting back to the chair.
Thank you, Robin. This concludes the formal business for which this meeting was called.
Since I am aware of no other business, I will now entertain a motion to conclude the meeting. Is there a second?
Second.
So moved and seconded. All those in favor, please say aye.
Aye.
Aye.
Thank you. The 2024 annual meeting of stockholders of The Bank of New York Mellon Corporation is hereby adjourned. Robin will now take any questions you may have.
Thank you, Joe. Mr. Chairman, I will now take any general questions. Please observe the rules described earlier. If you wish to ask a question, please raise your hand and wait to be recognized. When recognized, please stand and state your name and whether you are a stockholder of record or hold a proxy for another stockholder.
I will ask that you limit yourself to one question at a time so that we may afford the largest number of stockholders an opportunity to ask a question, which should be limited to three minutes. If you raise your hand, a microphone will come to you. Do we have any questions from stockholders? Mike Mayer's not here. Please. Microphone is above you. You don't need to hold it. They'll hold it for you.
My name is Daniel Zucker. I'm a shareholder. You mentioned that you want to return capital to shareholders through dividends and buyback of shares. Which method will be the dominant, the dividends or the buyback?
Sure. Well, maybe I'll just start by just reminding everybody, and this is how we talk about this, that capital return sits towards the bottom of the waterfall. We run the business. We have a capital-generative business.
We have a business model that doesn't consume a lot of capital, but we do consider whether or not there are opportunities to deploy capital into the business as part of our growth strategy. And that can happen and does happen. And then, to the extent that we have capital left over and we don't believe that we have an accretive use for that capital, we look to return it to shareholders. We do it in the form of both dividends and buybacks, as your question implies. Each of those methods have pros and cons. Different stockholders prefer different methods for a variety of different reasons, but the majority of our capital return in the most recent past has occurred through buybacks. Are there any other questions from stockholders?
Hello. Sorry. I'm Brad Cassoff. I'm a shareholder.
As I witnessed today walking through a line of protesters outside the building, there was clear energy against BNY Mellon among certain activist circles regarding its investment in weapons manufacturers, particularly Elbit Systems, and their complicity in the ongoing genocide in Gaza. Does the board have any opinions on the reputational risk of such actions on BNY Mellon, particularly involving employee retention and safety, employee morale, early career recruitment, and any changes to client expectations or requirements?
Thank you, also, for being a shareholder. And this is an important question. I want to just start by recognizing the tragedy that occurred in Israel in October and the ongoing tragedy that is occurring in Gaza, and our hearts go out to all of the people who've been so tragically impacted by these events. We do not have, as a corporation, investments in Elbit Systems.
What our investment management firms do have is some fairly modest investment in that particular company as part of their fiduciary responsibility to clients to track certain indices. As you probably know, that particular company is part of one of the MSCI indices, and we have fiduciary obligations to clients in order to be able to faithfully track the performance of those indices. As such, our investment is for clients as part of those client mandates, not on the balance sheet of the company. I would also note that we are fairly small, at least, those investments represent a fairly small outstanding share of that particular company, and we're quite low down in the shareholder registry. To answer the second implied part of your question, this has obviously been very difficult for many of our employees who've been individually targeted, which is something that we condemn associated with this.
They've had no part in that particular investment, and it's inappropriate that they would be targeted as a result of that. We also condemn the protests and damage that have occurred to our buildings and some of the intimidation that's occurred by the protesters, which we think is unwarranted through this particular event. Of course, you're right. We consider reputational risk as a very important part of the way that we think about risk as the corporation, in addition to credit risk and liquidity risk and operational risk and resilience risk and technological risk as well. This is an important one, but in this particular case, as I mentioned before, the fiduciary obligation to our clients on pre-existing mandates has been something that we have considered to be an important duty of care to our clients. Any remaining questions from stockholders?
Hi.
I'm a stockholder, and I just wanted to follow up on that question. How do you balance the fiduciary responsibility towards clients along with human rights violations that might be occurring through these companies of weapons manufacturers such as Boeing and Elbit Systems? I would assume that the fiduciary responsibility would be to not put stockholders and employees in the way of being part of human rights violations. So how does the board think about recommend that?
Thank you for being a stockholder, and thank you for the question. You're right that it's incredibly unfortunate that our employees have become, as you put it, to use your term, in the way of this. We view them as having been inappropriately targeted by protesters for reasons that are really unfair to them as individuals. But let me get to the heart of your question regarding the fiduciary risk.
So you have to remember that these mandates predate the activities that have occurred over the course of the past year. So we also have an obligation to clients to not leave them in the lurch for previous commitments that we've made to them. We are a 240-year-old company. We have become successful over time by being steadfast in our support of our clients, and that is an important part of our overall approach to this. We certainly condemn the tragedy that did occur and continues to occur in the region, and we certainly very much condemn that. But remember that this is not our values.
We believe, as a company, that it's very important that while we have values, individuals in our company have values, of course, we have individual personal views around policy, but the ability to allow our clients to be able to execute their missions, their desire for certain types of investments, we don't want to subjugate them to the point of view of the company. And we do believe that that's an important principle when it comes to making social policy. It should be our clients. They're our clients' investments. It should be their choices that dictate this approach, and it's our job to support them.
Just following up.
No, please. Just one second. Any other questions from any other stockholders? Not seeing any. Please, go ahead.
Just following up on trying to understand how your commitment to clients to be able to use companies or invest in companies that have human rights violations, how is that including your fiduciary responsibility towards your clients? Because I understand that the company has been around for many years, but new things have come up in terms of human rights violations, and so just trying to get some clarity on that.
So I understand, and I don't want in any way, in answering your question, to minimise the tragedy that did occur in October in Israel or to minimise the tragedy that continues to occur with, in both cases, the loss of civilian human life in the region, which we condemn. Having said that, we do not want to superimpose our social policy on our clients.
We have many, many clients who represent many different constituencies who have very strongly held views about things that they believe are important in the social and governance space. It's been our policy for a while and continues to be our policy that we will support our clients with their investment objectives and not superimpose our own values or judgements on those in most normal cases. That continues to be the background for this. I will also note that those clients, we have an obligation to track those particular indices, and those stocks are part of the indices. So the question could be reasonably addressed also to the index providers, but we are faithfully executing our clients' requests to track those indices with the constituents that are in those indices. Are there any other questions from any other stockholders? Okay. Any further questions of any kind? Okay.
Thank you for your questions. If you have additional questions or your question was not answered, you can reach out to our investor relations group through our corporate website. Additionally, information about non-GAAP measures discussed in today's meeting can be found in our 2023 annual report available through our corporate website. Thank you for attending and for your continued interest and support in our company.