Good afternoon, ladies and gentlemen. My name is John Strangfeld. I am Chairman and CEO of Prudential Financial. This annual meeting of shareholders is called to order. The agenda has been provided for you on your chair. Consistent with our efforts to go green, we have printed the shareholder ballot on the other side of the agenda. I intend to move quickly through the formal business portion of the meeting in order to leave as much time as possible for questions and comments. We are streaming audio of this meeting on the Internet so that as many shareholders as possible can listen to today's proceedings. I would like to introduce a number of people at this time. Joining me on the stage this afternoon is the Chief Governance Officer, Vice President, and Corporate Secretary, Peggy Foran.
I would now like to introduce members of Prudential Financial's board of directors, who are seated in the audience. I will ask them to stand as their names are called and remain standing until all their names have been called. Tom Baltimore, Gordon Bethune, Gil Casellas, Jim Cullen, Connie Horner, Martina Hund-Mejean, Karl J. Krapek, Christine Poon, Doug Scovanner, Jim Unruh, and Mark Grier, who also serves as Vice Chairman. All of them and I are nominees for director in today's election. Thank you. Next, I will recognize several members of our senior management team who are also seated in the audience. I will also ask them to stand when introduced and remain standing until all their names are called.
They are Charlie Lowrey, head of our international business, Steve Pelletier, head of our U.S. business, Susan Blount, Executive Vice President and General Counsel, Rob Falzon, Executive Vice President and Chief Financial Officer, Barbara Koster, Chief Information Officer, Rich Lambert, Nick Silitch, Chief Risk Officer, Scott Sleyster, Chief Investment Officer, Sharon Taylor, Head of Human Resources, Peter Sayre, former Principal Accounting Officer and Controller, and Rob Axel, current Principal Accounting Officer and Controller. Susan Blount and Peggy Foran are also my fellow proxies. Thank you very much. I would also like to introduce Bob Sullivan, a representative from our independent public accounting firm, PricewaterhouseCoopers. Finally, I would like to acknowledge the Inspectors of Election, Thomas Ferrari and Sandy Bernstein of Computershare Trust NA. I would now like to turn this portion of the meeting over to Peggy Foran, the Corporate Secretary of Prudential Financial. Peggy, over to you.
Thank you, Mr. Chairman. The minutes of the 2013 annual meeting of shareholders are available for inspection. If anyone wishes to see them, please see me after the meeting. Notice of this annual meeting, the proxy statement, a form of proxy, or a notice of Internet availability were mailed to shareholders of record commencing March 25th, 2014. An affidavit to that effect will be filed with the records of this meeting. The Inspectors of Elections have reviewed the voting procedures and submitted a report verifying the number of shares represented by proxy. Proxies received from shareholders of record as of March 14th, 2014 are entitled to notice and vote.
The inspector further states that at least 324,705,325 shares of common stock and Class B stock, which is approximately 70.13% of a total of 460,979,359 shares of common stock and 2 million shares of Class B outstanding and entitled to vote as of the record date, are represented at this meeting by virtue of valid proxies on file before the meeting began. The inspector has advised that a quorum is present, the meeting is duly convened and may proceed, Mr. Chairman.
Thank you, Peggy. The agenda and guidelines for this meeting have been printed on the meeting program. I intend to follow the order of business as set forth on your program. In order to move the meeting along as efficiently as possible, please hold your questions and comments for the appropriate time in the program. There are four voting items on the ballot today. A short discussion period will follow the presentation of each of these items. If you would like to ask a question or make a comment about the business matter to be voted upon, please raise your hand to alert the members of our staff who are present in the audience with microphones. Please hold any general questions and comments regarding the company's plans, strategies, or operations for the general discussion period following the report on the business.
If you have questions on personal issues that are not directly related to business matters or you would like information about Prudential's products, please see one of our associates in the reception area who will be happy to assist you. We will now proceed to the business items. I declare the polls open. Our first order of business is the election of directors. There are 12 directors to be elected, each to serve for a term of one year. The nominees are the directors I introduced at the beginning of the meeting and me. The board of directors recommends that shareholders vote for all of the nominees. Are there any questions or comments on the nominees for directors? Shareholders who wish to address the meeting should raise your hand and alert our members of our staff for questions. Yes, sir. Question from you. Comment?
Good afternoon. My name is Rudy Krajewski. I'm the acting professor at Kean University in Union County College for economics and mathematics. I would like to know if any of these directors are affiliated with other insurance company after creating what called interlocking directorate or interlocking stockholders. Thank you.
Thank you. Peggy?
The answer is no.
Thank you. Are there any other questions or comments? Our second item of business is management's proposal to ratify the appointment of PricewaterhouseCoopers as independent auditor for 2014. The board of directors recommends that shareholders vote for the ratification of the appointment of PricewaterhouseCoopers as our independent registered public accounting firm for 2014. Are there any questions or comments on this item? Our third item of business is management proposal regarding an advisory vote on executive compensation. The board of directors recommends that shareholders vote for this resolution. Are there any questions or comments on this item? Our fourth item of business is a shareholder proposal submitted by Mr. John Chevedden. The proposal calls for our compensation committee to adopt the policy regarding senior executives to retain a significant percentage of shares acquired through equity pay programs until reaching normal retirement age.
Here to present the proposal on Mr. Chevedden's behalf is Ms. Agata Keith. Ms. Keith.
Hello. Item four, shareholder proposal regarding executive stock ownership. It's sponsored by John Chevedden of Redondo Beach, California. Resolve, executives to retain significant stock. Shareholders urge that our executive pay committee adopt the policy requiring senior executives to retain a significant percentage of shares acquired through equity pay programs until reaching normal retirement age and to report to shareholders regarding the policy before our company's next annual meeting. For the purpose of this policy, normal retirement age would be at age of at least 60 and determined by our executive pay committee. Shareholders recommended that the committee adopt the share retention percentage requirement of 50% of net after-tax shares. This single unified policy shall prohibit hedging transactions for shares subject to this policy, which are not sales, but reduce the risk of loss to the executive.
This policy shall supplement any other share ownership requirements that have been established for senior executives and should be implemented so as to not violate our company's existing contractual obligations or the terms of any pay or benefit plan currently in effect. Requiring senior executives to hold a significant portion of stock obtained through executive pay plans would focus our executives on our company's long-term success. The Conference Board task force report stated that hold to retirement requirements give executives an ever-growing incentive to focus on long-term stock price performance. Please vote to enhance shareholder value. Executives to retain significant stock. Item four. Thank you.
Thank you. The board of directors recommends the shareholders vote against this proposal for the reasons fully outlined in the 2014 proxy statement. All of the items for which we have received proper notice have now been presented. If you have not voted by proxy or you wish to change your vote, please complete the ballot on the reverse side of today's meeting agenda and raise your hand. Someone will be through the audience to collect your vote shortly. With that, I now declare the polls closed. I'd like to take a few minutes to discuss Prudential's performance in 2013. I'm pleased to report that for the year, we achieved the objective that we established in 2010, namely producing a return on equity of 13%-14%. In fact, we exceeded the top end of that goal.
Our strong operating results for the year were broadly based and driven by solid underlying performance across our businesses. Our operations continue to demonstrate strong fundamentals with robust sales, net flows, and market momentum. We continued to benefit from several transactions that we completed over the past three years, our acquisition in 2011 of Star Edison from AIG, the completion in late 2012 of two significant pension risk transfer transactions, and our acquisition in 2013 of the U.S. individual life insurance from The Hartford. When combined with the performance of our existing businesses, these transactions provided the basis for the strong results we achieved in 2013. Going forward, our challenge is to continue to produce an operating performance that is demonstrably better than our peers.
Based on our excellent performance, our solid positioning in the marketplace, and the talent of our people, we remain confident in our ability to do just that. We believe this is achievable by virtue of four characteristics that continue to drive our success: our unique business mix, the quality of our businesses, our financial strength, and the talent and integrity of our people. I'd like to briefly discuss a couple of specifics from our performance in 2013. Account values in our individual annuities operations surpassed $150 billion in 2013, representing a 14% increase from the prior year. Our retirement businesses achieved record account values of about $323 billion. An increase of 11% over the prior year, reflecting strong sales and net flows. At year-end, our asset management segment's assets under management totaled nearly $870 billion, up about 5% from the prior year.
Our worldwide assets under management exceeded $1.1 trillion at the end of 2013. This means that Prudential ranks among the top 10 money managers globally. That's an impressive achievement which underscores our clients' confidence in Prudential. Sales and individual life business operation were up 77% over 2012, reflecting the impact of The Hartford acquisition. In group insurance, we continued to take steps to focus the business on areas where we see long-term opportunity for sustainable, profitable results. Our international insurance division achieved record earnings, again, based in part on high persistency of the business we write. Sales decreased from the prior year, reflecting deliberate action we have taken to manage or control our product portfolio and concentration. As you can see, all in all, 2013 was a year of significant progress and accomplishments for Prudential on many fronts.
We are confident in our long-term prospects and excited about the potential for our company. Prudential's people remain our biggest competitive advantage: their skills, their creativity, their integrity. These attributes, when coupled with a culture of teamwork and collaboration, differentiate us in the marketplace. Earlier this year, we announced several senior management changes designed to match our strategic priorities with our talent management strategies. In February, we announced that Ed Baird, who had headed our international business, would retire from Prudential after 35 years with the company. Ed did a superb job as head of our international businesses, which he led during a period of tremendous growth in Japan, and he was also an architect of our recent expansion into new international markets as well. Upon Ed's retirement last month, Charlie Lowrey assumed the position of head of our international businesses.
Since 2011, Charlie has served as head of our U.S. businesses, and under his leadership, our U.S. businesses increased their earnings over the last three years by over 50%. Steve Pelletier, who had served as CEO of our group insurance business and previously our annuities business, succeeded Charlie Lowrey as head of our U.S. businesses. Steve's broad base of international and U.S. exposure experience make him uniquely qualified for this role. In March, we announced that Rob Axel would replace Peter Sayre as Prudential's controller. After 30 years of distinguished service, Peter has decided to retire from Prudential in October. Until then, he will continue to oversee several key projects for us, and Peter has made numerous valuable contributions to the company, including helping Prudential complete its demutualization and the transition to a public company.
I'd like him to stand and be recognized for his dedicated service. Peter. Thank you. All of these management changes demonstrate how much time and attention we put into talent management at Prudential, including succession planning, talent development, and diversity. We see talent management as one of the most important things we do, and I know that these management changes position the company well for our future growth. Looking forward, as I mentioned earlier, in 2010, we announced our objective to achieve an ROE of 13%-14% in 2013. We believed then, as we do now, that achieving and sustaining that level of performance would demonstrate our superior performance relative to our peers. Our ability to achieve and exceed that goal last year confirms our belief in our earnings power.
We have never seen that objective as a one-year, once and done objective. We remain confident in our ability to sustain an ROE of 13%-14% over the long term through the cycle, while also continuing to grow and to return capital to our shareholders. We believe that this performance will set us apart in the marketplace. We also remain committed to the principles that are the foundation of our success. Achieving our objectives in the right way with integrity and a relentless focus on quality control. Number two, financial strength is an imperative. The talent of our people and our corporate culture with our emphasis on collaboration, teamwork, and diversity will be the most important drivers of our long-term success. To be a relevant and vibrant member of the communities and the countries in which we operate.
We're very proud of our performance in 2013 and confident about the future of our company. We hope you share that confidence, and I would like to thank you, our fellow shareholders, for your continued interest in Prudential, for joining us here today and providing input throughout the year. Now we'd like to open it up to questions from the floor. If you have a question, please raise your hand and one of our mic handlers will find you. In order to accommodate as many shareholders as possible, we request that all comments and questions be presented in a brief and concise fashion. If time permits, shareholders desiring to speak a second time may do so, but only after all other shareholders have an opportunity to have a turn as well. Questions? Yes, sir.
This is Professor Krajewski again. Once, I used to work for Prudential years ago, three decades ago. From a mutual company to as a stock company, really it is nice that you're paying dividends. My disappointment when you pay dividend is we do not have dividend reinvestment plan. What happened is if you do not have it creates, say, the loss of opportunity. Instead of depleting retained earnings, with the dividend reinvestment, money go back into the retained earnings, allow the company to have additional revenue for the expansion. Disadvantage is also there's loss of opportunity for the shareholder. Number of shares actually will increase. Also, buying shares to Computershare, the company that has a holding company on the bookcase would allow us to buy more share at the fraction with more fraction. This should be number one priority. Look into it.
Even though I sent an email to investor relationship, they had a deaf ear, no response to it. Again, look into this thing. Should be implemented right away. Thank you.
Thank you for your comments. Any other questions or comments? Yes, sir.
Samuel Ellison. I made some comments to your administrative staff. I presume this is working or not, I don't know.
It's working.
Okay. Three basic questions. Number one, you show a book value and a reduction in book value, what have you. I'd like you to explain that as number one. Number two is you continue to tout the achievements in terms of the diversity. I note Pardon? I note that out of all of the directors that I see listed themselves, they don't list their military service. I understand that Prudential provides a lot of perks towards military families, et cetera. When there is no military persons on board other than the former chairman, Ryan, whom I found to be an outstanding person and respect for myself as well as other military persons. I just wanted to bring that to your attention.
As far as the founder, John Dwyer, historically, John Dwyer was a carpetbagger after the Civil War, and I think some of those venues continue to this day with respect to some of the board and directors as yourself. I think it's unfair to the membership and the board that all of the power retained in the chairman of the board and CEO. There should be diversification, there's too much opportunity for foul play when you vest all of your information in one person. That's my comments.
Okay. Thank you very much for your comments. Let me just comment very briefly on a couple things you've mentioned. Firstly, book value does fluctuate. It's in partly fluctuates because of our earnings performance, which has actually been quite consistent, it also gets fluctuated by certain accounting activities, particularly around foreign exchange and other factors. Long run, those things tend to smooth their way out, long run, we would expect to see a progression of book value growth. Number two, on our directors, we do have directors who are themselves veterans of the military, just to clarify your comment. We view the military as both an important customer for certain lines of business and an incredibly important source of talent as well. As for your other comments, they're duly noted. Thank you.
I have one final comment. With regards to the demise of the late William Gray, who was a congressman in the 13th Congressional District in Philadelphia. I think it would be appropriate if the board would acknowledge that, even if it's only with a moment of silence. I think Mr. Gray made a major contribution to our country and 22 years of service to this organization.
As you can see, there is a dedication in the proxy statement. The Board had asked for that to be put in.
Thank you for that. Any other questions or comments? Hearing no further questions, this concludes the question and answer portion of our meeting, and I'd like to turn it over to Peggy. Peggy?
Thank you, Mr. Chairman. The preliminary results based on the voting of shares represented by ballot proxies and ballots tabulated show that the Board slate of director nominees has been approved, with each director nominee having received a majority of the votes cast. The ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm has been approved in favor of approximately 98.89% of the votes cast. Management's resolution to approve, on an advisory basis, the overall executive compensation program and policies employed by the company for its named executive officers has been approved with approximately 85.67% of the votes cast voted in favor.
The shareholder proposal requesting that our Compensation Committee adopt a policy requiring senior executives to retain a significant percentage of shares acquired through equity pay programs until reaching normal retirement age has not been approved, with approximately 72.72% of the votes voting against that proposal, Mr. Chairman.
That concludes the preliminary voting results.
It does, the final results will be certified by the Inspector of Elections, and this information will be posted both on our website and reported in our Form 8-K. Shareholders may also obtain results by writing to the Office of the Corporate Secretary.
Thank you, Peggy, very much. The business of the meeting is now concluded. I'd like to thank people for your continued interest and support. The meeting is now adjourned.