Welcome to Principal Financial Group 2026 Annual Shareholders Meeting. Please submit any questions or comments for today's meeting by clicking on the Q&A icon in the upper right-hand corner of the virtual meeting site. The polls for this meeting are open and will close just prior to the inspector's report. Closing will be announced. If you've already sent in your proxy or otherwise voted, you don't need to do anything else today. You may vote during the meeting by clicking on the Vote icon in the upper right-hand corner of the virtual meeting site, where we list all company proposals. It is now my pleasure to turn today's meeting over to Deanna Strable, Chair, President, and Chief Executive Officer of Principal Financial Group.
Good morning. Welcome to the 2026 Annual Shareholders Meeting of Principal Financial Group. I will now call the meeting to order. The agenda and rules for today's meeting are available on the virtual meeting site by clicking on the Documents icon in the upper right-hand side of the page. I'm Deanna Strable, Chair, President, and Chief Executive Officer of Principal Financial Group. With me today is Chris Agbe-Davies, Interim Corporate Secretary, Vice President, and Associate General Counsel, Joel Pitz, Executive Vice President and Chief Financial Officer, as well as Humphrey Lee, Vice President, Investor Relations. Along with the company's executive management team, member of the company's Board of Directors are participating in our meeting today, including Jonathan Auerbach, Mary Beams, Jocelyn Carter-Miller, Roger Hochschild, Scott Mills, Elizabeth Mitchell, Claudio Muruzabal, Diane Nordin, Blair Pickerell, Clare Richer, and Alfredo Rivera.
I invite your questions and comments during today's meeting. Any questions or comments related to any proposal being voted on today will be addressed first. We will address the other questions and comments at the end of the meeting. I would like to introduce the directors who are standing for election today. Jonathan S. Auerbach, Mary E."Maliz" Beams, Jocelyn Carter-Miller, Scott M. Mills, and Claudio N. Muruzabal. The skills and experience each director candidate brings to our board of directors are detailed in the proxy materials you received, but I'll summarize a few of them for you. Jonathan Auerbach has been on our board since 2019. He serves on our Finance and Human Resources Committees. He brings executive leadership experience in financial technology, strategy, and global operations. Mary E. "Maliz" Beams has been on our board since 2021. She serves on our Audit and Finance Committees.
Maliz brings executive leadership experience in financial services, retirement solutions, and investment management. Jocelyn Carter-Miller has been on our board since 1999. She serves as Chair of our Human Resources Committee and is a member of our Nominating & Governance and Executive Committees. Jocelyn Carter-Miller brings executive leadership experience in marketing, brand management, and international operations. Scott M. Mills has been on our board since 2016 and has served as our Lead Independent Director since 2020. He serves on our Audit, Nominating & Governance, and Executive Committees. Scott brings executive leadership experience in media, entertainment, and investment management. Claudio N. Muruzabal has been on our board since 2021 and serves on our Human Resources and Nominating & Governance Committees. Claudio brings executive leadership experience in technology and global business operations. The board has appointed Computershare to serve as Inspector of Election for this meeting.
Representatives from Computershare, as well as our independent auditing firm, Ernst & Young, are participating in today's meeting. Chris, do we have a quorum?
Yes. The board of directors set March 25, 2026, as the record date for determining shareholders entitled to vote at this meeting. The representatives of Computershare, the Inspector of Election present today, have subscribed their oath of office and report to us that on the record date, there were a total of 216,449,333 shares of company's common stock outstanding. The holders of 1/3 or more shares of common stock entitled to vote at this meeting are present today by virtual participation or by proxy. We have a quorum. An affidavit of mailing has been delivered to us by Computershare attesting to the fact that the notice of meeting, the proxy statement, and the 2025 Annual Report on Form 10-K were all properly made available to all shareholders of record beginning April 13, 2026.
As stated in the notice for this meeting that you received, the purpose is to vote on the proposals presented in our proxy statement, as well as any other business as may properly come before the meeting.
On the basis of the secretary's report, the meeting is duly convened. Let's turn to the meeting's agenda available to you on the meeting website. The polls for each proposal voted on at this meeting are open. I will announce the closing of the polls shortly. If you've already sent in your proxy card or otherwise voted, you don't need to do anything else today. If you want to vote now or revoke and change your earlier vote, click on the Vote icon on the meeting website. If you want to use either of those options, please vote now, Chris, would you present the proposals, please?
Yes. Proposal number one. On behalf of the Board of Directors, I nominate the following persons, Jonathan S. Auerbach, Mary E. "Maliz" Beams, Jocelyn Carter-Miller, Scott M. Mills, and Claudio N. Muruzabal, for election as directors to serve in the class whose terms expire in 2029, or until each of their respective successors have been elected and qualified. Proposal number two. On behalf of the Board of Directors, I move adoption of the following resolution. Resolve that the compensation paid to the company's named executive officers, as disclosed pursuant to item 402 of Regulation S-K, including the Compensation Discussion and Analysis , compensation tables, and narrative discussion, each as presented in our proxy statement, is hereby approved. Proposal number three.
On behalf of the Board of Directors, I move adoption of the board's recommendation that shareholders vote for the ratification of the appointment of Ernst & Young LLP to audit the consolidated financial statements of the company for the fiscal year ending December 31, 2026. Proposal number four. On behalf of the Board of Directors, I move adoption of the following resolution. Resolve that the Principal Financial Group 2026 Stock Incentive Plan is hereby approved and authorized.
Are there any questions from shareholders regarding any of the proposals on the ballot? If you have questions and haven't already done so, please submit these questions or comments regarding any of these proposals. To submit a question, click on the Q&A icon in the upper right-hand corner of the page. We will pause for a moment while we gather the questions and comments. Humphrey?
There are no questions pertaining to the proposals. All other questions will be answered at the end of the meeting. The polls will close momentarily. We will now pause to allow time for final voting. Please submit your final votes now.
With no further business for the meeting and all ballots collected, the polls are now closed. We are ready for the Inspector of Election to report on the vote. Chris, will you please read the report?
A substantial majority of shares entitled to vote at this meeting have been voted by proxy. Those results, plus any shares voted at this meeting, will be tallied and the final results announced publicly within a few days. The Inspector of the Election reports that each of the directors nominated by the board for election received substantially more than a majority of the votes cast. The advisory vote on the company's executive compensation program indicated approval of the program by a substantial majority of the votes cast. Substantial majority of the votes cast were cast in favor of the ratification of the appointment of Ernst & Young LLP, and the Principal Financial Group 2026 Stock Incentive Program was approved by substantial majority of the votes cast.
Thank you, Chris. Based on the preliminary report of the Inspector of Election, I declare that Jonathan S. Auerbach, Mary E. "Maliz" Beams, Jocelyn Carter-Miller, Scott M. Mills, and Claudio N. Muruzabal are elected directors. The advisory vote on executive compensation indicates approval of the company's executive compensation program as set forth in the proxy statement. The appointment of Ernst & Young LLP as independent auditors for 2026 is ratified. The Principal Financial Group, Inc. 2026 stock incentive program was approved by a substantial majority of the votes cast. The meeting is now adjourned. I'd like to thank you again for taking the time to join us today. On behalf of the Board of Directors and all Principal employees, thank you for your continued support. I will now share with you some business highlights from 2025 and provide an update on our strong financial position.
Following that, we will address any remaining questions that have been submitted. Principal is well-positioned for continued strength and performance. We closed 2025 with strong performance across our diversified portfolio of businesses, reflecting the dedication and hard work of our 19,000 employees around the world. Their commitment to excellence and to our customers helped us seize opportunities throughout the year and positions us well for continued growth in 2026. Looking across our three strategic growth areas, our execution in 2025 and the momentum we are carrying into this year position us well. As a reminder, the following are our key strategic areas of focus for continued growth. The retirement ecosystem. Our opportunity extends beyond retirement recordkeeping to asset management, participant advice and wealth management, and retirement income solutions.
We have strong capabilities across each of these areas and are focused on maximizing the value we deliver to customers. Small and mid-sized businesses, which we define as employers with fewer than 1,000 employees. These companies are key drivers of job creation and economic growth in the U.S., and their resilience aligns well with the solutions and capabilities we provide. Global asset management, where we continue to expand our private market capabilities while leveraging our access through joint venture partnerships across global markets. Our conviction and our strategy remain strong as we continue to focus on these growth drivers. Each of these represent a compelling market opportunity that aligns well with our differentiated strengths. I'll now highlight several key milestones from 2025 as we executed our strategy and delivered strong results for customers and shareholders. Following that, we will address any remaining questions that you may have submitted.
Adjusted non-GAAP earnings per share growth in 2025 was 12%. This performance reflects the strength of our diversified business model, favorable market conditions, and disciplined expense management across the enterprise. We ended 2025 with $781 billion of total company assets under management, up 10% from 2024, which was primarily driven by strong market performance. Turning to capital and liquidity, we ended the year in a very strong position with $1.6 million of excess and available capital, including approximately $800 million at the holding company at our targeted level, $300 million in our subsidiaries, and $480 million in excess of our targeted 375% risk-based capital ratio, which was 406% at the end of the year.
Free cash flow conversion remains strong at 92%, and ROE improved 120 basis points year-over-year. Building on sustained performance and improved returns, we are well-positioned to deliver 15%-17% ROE in 2026, an increased target from 2025, reflecting the strength of our results, our competitive positioning, and disciplined capital efficiency across our diversified portfolio. Our strong capital position and free cash flow enabled us to deliver on our capital deployment guidance. We returned over $1.5 billion of capital to shareholders in 2025, including approximately $850 million in share repurchases and $685 million in dividends. Our total capital return to shareholders included share buybacks, which were at the midpoint of our targeted range and an 8% increase in our annual common stock dividend.
We closed 2025 with momentum across our integrated and diversified portfolio of businesses. Our success is a testament to the dedication of our employees, whose commitment to our customer enables us to capture opportunities and deliver strong results. Their work continues to position us well for sustained growth and value creation for our customers, employees, and shareholders. I would like to take a moment to highlight a recent addition to our executive management team. Tim Brown will join Principal as Executive Vice President, General Counsel, and Secretary effective June 8th. Tim brings deep expertise across legal, compliance, government relations, and operations, most recently serving as Chief Legal Officer and Corporate Secretary at Venerable. I am looking forward to partnering with Tim, and I'm pleased to welcome him to Principal. I would also like to recognize and thank George Djurasovic for his valuable leadership while serving as interim general counsel.
This concludes the business update portion of the meeting. If you haven't already done so, please submit any questions or comments you may have. To submit a question, click on the Q&A icon in the upper right-hand corner of the page. We'll now address any questions or comments we've received. Humphrey?
There are no questions. Deanna, your closing comments, please.
As there are no further questions and the business portion of the meeting has been.