Good morning and welcome. I'm John Gibson, Chairman of the Board of ONE Gas Inc. It's my pleasure to welcome you to the ONE Gas 2020 Annual Meeting of Shareholders. I now call this meeting to order. It is our intention to conduct today's meeting according to the agenda and rules and procedures you received as you entered the room and pursuant to CDC social distancing guidelines.
Please note that following adjournment of the meeting, there will be an opportunity for questions and discussion. The polls will open for voting after all the proposals have been presented. I remind you that statements made during our annual meeting that include expectations or predictions should be considered forward looking statements and are covered by the Safe Harbor provisions of the Securities Act of 1933 and the Securities and Exchange Act of 1934. Actual results could differ materially from those projected in any forward looking statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings.
Before proceeding to the business of the meeting, let me introduce the other Board members. Robert Evans, retired President and Chief Executive Officer of Duke Energy Americas, Minden, Louisiana Tracy Hart, President and Chief Executive Officer, Tarleton Corporation, St. Louis, Missouri Michael Hutcheson, retired partner at Deloitte and Touche, Denver, Colorado Patty Moore, Retired Board Chair, Red Robin Gourmet Burgers and Owner, Patty L. Moore Associates, Broken Arrow, Oklahoma. Pierce Norton, President and Chief Executive Officer, 1 Gas Inc, Tulsa, Oklahoma Eduardo Rodriguez, President, Strategic Communications Consulting Group, El Paso, Texas and Doug Yeager, Retired Chairman, President and Chief Executive Officer of the Laclede Group, now Spire Inc, St.
Louis, Missouri. I would like to thank each of these directors for their service on the Board. Brian Shore, Vice President, Associate General Counsel and Corporate Secretary of 1 Gas Inc. Will serve as secretary for this meeting. Dan Loeffler of EQ Shareholder Services, our independent stock transfer agent has been appointed as Inspector of Election for this meeting.
Mr. Shore will now report on the mailing of the notice of this meeting and the presence of a quorum.
Thank you, Mr. Chairman. Notice of this meeting, accompanied by a proxy statement covering the matters to be acted upon at this meeting, a proxy card and the company's 2019 annual report were first mailed on April 1, 2020 to each shareholder of record as of March 23, 2020. A list of shareholders entitled to notice of and devote at this meeting has been available for viewing here at corporate headquarters for the past 10 days and is available for viewing at this meeting. At the record date, 52,859,608 shares of ONE Gas common stock were issued and outstanding.
We are informed by the Inspector of Elections that the count of shares immediately prior to this meeting shows that a majority of the shares of 1 Gas common
stock outstanding at the
Thank you, Brian. I hereby declare a quorum is present.
Thank you, Brian. I hereby declare a quorum is present and that this meeting is duly convened for the purpose of conducting such business as may properly come before it. On behalf of the Board of Directors of ONE Gas, I express my appreciation to all shareholders and attendants today and all shareholders who return their proxies. At today's meeting, we are asking our shareholders to vote on the following three proposals. Proposal number 1 is the annual election of 8 directors to serve for a 1 year term expiring at the company's Annual Meeting of Shareholders in 2021.
The nominees for the 8 directorships are set forth in the process statement for this meeting and were previously introduced. Proposal number 2 is the ratification of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 1 Gas Inc. For the 2020 fiscal year. And proposal number 3 is the annual advisory vote on the compensation paid to the named executive officers as described in the proxy statement for today's meeting. I now move for shareholder approval of these three proposals.
And the polls are now open. I would like to point out that those of you who have previously returned proxies have authorized the persons named in the proxy to vote your shares as instructed on all proposals coming before the meeting and you do not need to vote by ballot. If any shareholder present has not submitted a proxy or wishes to revoke a previously voted proxy and cast your vote by ballot, please raise your hand and you will be given a ballot. Since all those desiring to vote by proxy or ballot have done so, I declare the polls closed. The Inspector of Election will now tabulate the votes.
While the inspector is completing the tabulation of the votes, I would like to ask Pierce Norton, President and Chief Executive Officer, to provide an update on the company's performance.
Thank you, and good morning. I'd like to begin by acknowledging that we are in unprecedented times. We're faced with an event that has impacted our economy, our businesses and our daily lives. It has impacted every person in some way. As a natural gas utility, we have an important role in serving our communities and that includes taking the necessary precautions to protect ourselves and the people around us.
We will get through this pandemic relying on the same values that we use to address other risk in our business. I'd like to express my thanks to the Board of Directors for their continued service and guidance and to you, our investors, for your confidence in our company. As you'll hear in our 2019 results, ONE Gas is committed to creating exceptional value for our stakeholders and building on our legacy of safely and reliably delivering natural gas to our more than 2,200,000 customers to meet their residential, commercial and industrial needs. We safely and reliably deliver natural gas each day, thanks to our more than 3,600 dedicated employees. Thank you for living out our core values and working every day to ensure the safe delivery of natural gas to our valued customers.
Our company has a long history of exceptional talent and dedicated workforce. Thank you to our retirees who continue to be part of that legacy and for continuing to be champions of the company today. And now I'm pleased to report on some of the notable achievements in 2019. Our net income increased to 186,700,000 with corresponding diluted earnings per share of $3.51 compared with $172,200,000 of net income and earnings per share of $3.25 in 2018. We also increased our quarterly dividend by 8% over dividends paid in 2019 to $0.54 per share effective for the Q1 2020, resulting in an annualized dividend of $2.16 per share.
Our average annual dividend growth rate is expected to increase 6% to 8% between now and 2024 with a targeted dividend payout ratio of 55% to 65%, subject to Board approval. Total shareholder return was up 20% in 2019, up 156% since our spin off as a new company in 2014. These results are made possible by a focused business strategy, our dedicated workforce and staying true to our core values, which has enabled us to increase both shareholder value and the impact we're able to make in the communities we serve. Part of our business strategy and our primary core value is safety. ONE Gas is committed to operating safely and reducing risks for our employees, customers and communities.
We ranked in the American Gas Association's 1st quartile in all three safety performance metrics: total recordable incident rates, days away, restricted and transferred and preventable vehicle incident rates. This is the 3rd consecutive year that ONE Gas was in the 1st quartile in all three metrics. We remain committed to refining our processes and procedures to produce zero harm to our employees, customers and the public. Another important aspect of safety is our pipeline replacement program. It is at the core of our business model and will continue to provide decades of clarity on capital spending as well as cost mitigation through system modernization.
In 2019, we invested $465,000,000 in capital expenditures with 70% of that investment going towards system integrity. We replaced 430 miles of distribution mains, service lines and transmission lines last year, which include 197 miles of vintage pipeline. We're pleased to have completed our 5 year accelerated cast iron replacement program ahead of schedule, a major milestone for our company. We will now return our attention to the other vintage pipeline materials in our system. With more than 60,000 miles of distribution mains, services and transmission pipelines, there's always more work to do.
That's why we continue to utilize technology that prioritizes which assets we replace next. As our workforce continues to grow, fostering an ethical workplace that values inclusion and diversity remains a top priority. We've seen firsthand how our environment where employees feel like their contributions are valued, creates engaged employees who care as much about one another as they do the customers we serve. In 2019, we again had record breaking participation in our employee engagement survey with more than 90% of the employees providing feedback. The scores were again among the highest in the company's history and for our industry.
It's also important that our employees and customers have the community resources and the quality of life that they desire. So we look for ways to give our time and our resources through charitable giving, volunteerism and community engagement. In 2019, we proudly contributed $2,500,000 through the ONE Gas Foundation grants and community investments. Our employees, their family members have also spent thousands of hours volunteering in their communities. Mr.
Chairman, thank you for the opportunity to review the company's 2019 performance. Pierce, thank you very much for your remarks.
On behalf of the Board and the shareholders, we want to thank you for your leadership as well as the courage and commitment shown by you, your team and your employees to lead us through this difficult time. Mr. Shore, will you please report on the results of the bogey?
Mr. Chairman, we have been provided the preliminary report of the Inspector of Election as follows. Each of the 8 director nominees has been elected for a 1 year term. The selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm has been ratified a 99.24% favorable vote. And the advisory vote on the compensation paid to the named executive officers received a 96 0.5% favorable vote.
Because no one has submitted any additional business for this meeting in accordance with the provisions of our bylaws, there is no other business to come before this meeting. I once again express my appreciation to the shareholders who attended this meeting and to those who submitted their proxies prior to the meeting. I now declare this annual meeting of shareholders adjourned.