Good morning and welcome to State Street Corporation's 2025 Annual Meeting of Shareholders. I'm Brenda Lyons, State Street's Global Head of Corporate Secretarial and Administration Services, and I'd like to lead off with a few formalities. Today's meeting is being conducted virtually, is copyrighted, and all rights are reserved. The meeting may not be recorded for rebroadcast or distribution in whole or in part without the express written authorization of State Street Corporation. In addition, the presentations and potentially the responses to questions or comments at the meeting will contain forward-looking statements. Actual results may differ materially from those statements due to a variety of important factors, such as those factors referenced during the meeting and in our SEC filings, including the risk factors in our Form 10-K. Our forward-looking statements speak only as of today, and we disclaim any obligation to update them, even if our views change.
Further, some financial results referenced during the meeting will be presented on a basis that excludes or adjusts one or more items from GAAP. Reconciliation of those non-GAAP measures to the most directly comparable GAAP or regulatory measure can be found within our fourth quarter 2024 or first quarter 2025 earnings release addendum, which can be located on our Investor Relations website, investors.statestreet.com. Let me now introduce State Street's General Counsel and Corporate Secretary, Mark Shelton, who will call the meeting to order and review the meeting guidelines and other matters.
Hello, I'm Mark Shelton. Thank you for joining us today. Our Chairman, Ronald O'Hanley, has asked me to call to order State Street Corporation's 2025 Annual Meeting of Shareholders, and I am doing so now. I note that we have represented in person or by proxy more than a majority of our outstanding shares of common stock at this meeting. A quorum is therefore present, the details of which we will walk through later in the meeting. To start, I'd like to make some introductions. Ron O'Hanley is present and will shortly provide a review of corporate developments and lead us through the voting portion of the meeting.
In addition to Ron, let me introduce the other members of our board participating in the meeting: Amelia Fawcett, our current independent lead director; Sara Mathew, our independent lead director-elect; Marie Chandoha; Donna DeMaio; Bill Freda; Patricia Halliday; Bill Meaney; Sean O'Sullivan; Julio Portalatin; and John Rhea. Also participating are our Interim Chief Financial Officer, Mark Keating, and our Chief Operating Officer, Mostapha Tahiri, as well as other members of our management team. Shannon Stanley, Assistant Secretary, will be coordinating shareholder-submitted questions. Please note that today's meeting guidelines can be found through the virtual meeting portal. As noted in the meeting guidelines, only shareholders may submit questions or comments or may vote at the meeting. In the event of a technological failure that prevents us from continuing, we will keep the line open and attempt to rectify the issue with the intention to resume as soon as practicable.
Please remain logged in if you would like to continue your participation through the remainder of the meeting. If we encounter technological difficulties preventing the meeting from continuing, whether or not this is expressed, please note that notice of the meeting has been properly served, a quorum is present, and all proposals will be deemed properly presented, and the meeting will be adjourned. Questions or comments are welcome. There will be two forums for these: one prior to when the polls close for questions or comments regarding specific voting matters, and another general question-and-answer session after the formal part of the meeting. Please submit questions or comments through the virtual meeting portal at any time during the meeting. We ask that each shareholder provide his or her name, if an individual, and both his or her name and affiliation, if an institutional shareholder.
Please also note questions or comments for the formal part of the meeting regarding specific voting items must be pertinent to matters properly brought before the meeting. To ensure that everyone has an opportunity, shareholders are limited to one question or comment for each voting matter and one during the general question-and-answer period. When submitting a question or comment for a voting matter, please identify the matter to which your question pertains. Questions and comments may be summarized or consolidated with others and, if appropriate, will be addressed time permitting. Each should be briefly stated and limited to the character restrictions in the question box on the portal. These guidelines are administered at the Chairman's or his designee's discretion. Depending on time, the number of pending questions or comments, and other factors, we may permit additional appropriate questions or comments.
If you have voted your shares prior to the start of the annual meeting, your vote has been received and there is no need to vote those shares during the annual meeting unless you wish to revoke or change your vote. If you wish to vote through the voting portal, you may do so by clicking on the voting button on the virtual meeting portal and following the instructions. At the Chairman's request, I now declare the polls are open. Let me now introduce our Chairman, Ron O'Hanley.
Thank you, Mark, and welcome, fellow shareholders, to our annual meeting. Before highlighting State Street's strategic progress and performance in 2024, which reflects strong financial results and good business momentum, I want to acknowledge the rapidly evolving operating environment we have witnessed in recent months. During uncertain times such as these, our purpose to create better outcomes for the world's investors and the people they serve is even more relevant. Our financial strength, combined with our deep investment services, markets, software, and asset management capabilities, uniquely positions us to serve as our client's essential partner and deliver for our stakeholders. Throughout its long history, State Street has supported both clients and financial markets through many periods of uncertainty.
By focusing on those things that we can control and preparing for those that we cannot, State Street has proven to be resilient and adaptable, enabling the organization to successfully navigate through many different operating environments and deliver growth for our shareholders. Turning now to our performance in 2024, we entered last year with a clear set of strategic priorities aimed at driving revenue growth, improving our sales performance, strengthening our market position, and enhancing our operating model. We executed well against our objectives, enabling us to serve our clients and deliver strong financial performance and continued business momentum for our shareholders. These results included both positive fee and total operating leverage, pre-tax margin expansion year- over- year, and strong earnings growth, illustrating the power of our franchise and the effectiveness of our strategy.
The foundation of our strong performance in 2024 was laid in prior years, building upon the significant strategic investments we have made in our capabilities and our client value proposition to be our client's essential partner, led by service excellence. These actions have positioned State Street to compete better and win. I am pleased to report the continued strengthening of our revenue performance last year, which positively impacted our overall financial results. Full-year fee and total revenue increased 7% and 9%, respectively, from 2023. Excluding notable items, fee revenue, net interest income, and total revenue each increased by a solid 6% year- over- year in 2024. Year- over- year, each revenue line contributed positively, including double-digit growth in management fees, FX trading services, and front-office software and data revenues, while we also delivered a second consecutive year of record net interest income.
Full-year earnings per share was $8.21 as compared to $5.58 in 2023. Excluding notable items, year- over- year, we delivered EPS growth of 13%, pre-tax margin expanded by more than 100 basis points, while full-year return on average tangible common equity was a robust 19%. Turning to our business momentum in 2024, our key business performance indicators, including wins, clearly illustrate the effectiveness of our strategy in positioning State Street to effectively serve our clients, compete better, and gain share. 2024 was an important year of business growth and significantly improved sales performance, which sets us up well as we look ahead. In investment services, we generated very strong AUCA wins of over $2.3 trillion in 2024, as well as a significant year-over-year increase in new servicing fee revenue wins, which will help to drive organic growth as we look ahead.
Our State Street Alpha solution brings together the full depth and breadth of our servicing and software solutions and is a clear competitive advantage for our investment services business. Our strong full-year sales performance in 2024 demonstrates the strength of this compelling value proposition, as Alpha accounted for approximately 50% of the $2.3 trillion of new AUCA wins in 2024. All told, we won seven new Alpha mandates in 2024, achieving our goal of six to eight new Alpha clients per last year. Our investment management franchise had another strong year, with full-year management fees achieving record levels. We continued to strategically broaden Global Advisors' product and distribution capabilities, which has positioned the business for future growth and from which we have already seen the early benefits. For example, we generated $146 billion of net new assets in 2024.
2024 ETF inflows were a record $109 billion, supported by the highest number of ETF launches in GA's history. Building on a record year of inflows in 2023, our cash business generated an aggregate $32 billion of full-year inflows in 2024, while our institutional business also had a positive year of inflows, with the U.S. defined contribution again continuing to drive inflows. As a leading provider of trading, research, and lending solutions, coupled with innovative platforms, financing, and portfolio solutions, our markets franchise remains well-equipped to support clients through market cycles, volatility, and periods of uncertainty, with deep liquidity and trading expertise, while also providing important diversification to our revenue profile. Despite lower average FX volatility in 2024, FX trading services generated double-digit revenue growth, supported by strong and growing client volumes.
Turning to our productivity efforts, 2024 was also an important year for our transformation, as we continued to focus on core operating model improvements that enhance our client and colleague experience and generate increased productivity. We made a number of key investments in operational simplification, automation, including AI, and technology modernization. These actions contributed to the approximately $500 million of year-over-year recurring productivity savings in 2024, in line with our target. Further, these and prior years' transformation efforts supported both positive fee and total operating leverage in 2024, while also enabling significant reinvestment in the business. Turning to capital return, our strong balance sheet position enabled us to return 87% of earnings to our shareholders last year. All told, we returned a total of $2.2 billion of capital, including common share repurchases, and we again increased our per-share quarterly common dividend by 10% beginning in the third quarter.
As we look ahead, we remain focused on consistently returning capital to our shareholders and are targeting capital return of about 80% of earnings in 2025, subject to market conditions and other factors. Next, let me spend a moment on the impact we make as an organization. Healthy, prosperous communities help drive State Street's success. I am proud of the role State Street and our people played in our communities in 2024. To provide just a couple of examples, State Street Foundation invested nearly $22 million in 2024, with a primary focus on education and workforce and readiness initiatives around the globe. Our employees amplified this impact through their own philanthropic giving, matched by State Street Foundation. Even more impactful is the over 100,000 hours of volunteer time by our employees in 2024.
Not only their time, but also their expertise and leadership to drive meaningful positive change in the communities where they live and work. Before I conclude, we recently announced that John F. Woods has been appointed as our new Chief Financial Officer, and he's expected to join State Street in late August. John brings more than 38 years of industry experience across multiple finance disciplines to State Street. His deep CFO experience, along with proven ability in getting and executing and setting and executing enterprise strategy, balance sheet management, focus on building and developing high-performing teams, as well as investor and regulator relationship management, all position him well to bring immediate value to State Street. I would also like to acknowledge Mark Keating, who has served as our interim CFO since February and will continue in this capacity until John joins in August.
I am deeply grateful to Mark for his leadership and significant impact over the past few months as an essential partner to me and the executive committee. Looking forward, I'm enthusiastic and appreciative in anticipation of Mark's continued impact and growth at State Street. To conclude, good execution against a clear set of strategic priorities in 2024 enabled us to support our clients better and deliver strong financial and business results. Our strategic actions have positioned State Street to compete better and win, as evidenced by the accelerating business momentum we generated from start to finish in 2024. As we look ahead, despite the hurdles the current operating environment may present, we have strong conviction in our strategy and in our ability to serve our clients well, underpinned by our distinctive value proposition and financial strength.
We will leverage our agility in the current environment, and I firmly believe that we have the right strategy in place to deliver solid financial returns in both the near and long term for our shareholders. We thank you for your continued partnership and trust. Let's now move to the matters presented for voting by shareholders. As Mark indicated earlier, I will take questions and comments specific to the voting matters before the polls close. After the adjournment of the formal part of the meeting, I will take general questions and comments about our company. Donna Corso of American Election Services is serving as Inspector of Elections for the purpose of determining the shares represented at the meeting and by proxy, and the validity of the proxies and ballots, and counting all votes and ballots. Will the Inspector of Elections please confirm the quorum?
Mr. Chairman, there are represented in person or by proxy at this meeting at least 88.3% of the total outstanding shares. Therefore, a quorum is present.
Thank you. I confirm the meeting is properly convened. The notice of meeting sets forth five specific voting items, each of which is described in the proxy statement. I will present these items before the meeting in the order that they appear in the proxy statement. If you have a question about a proposal, please note the proposal matter when submitting a question. The first item is the election of 11 director nominees.
Mr. Chairman, we have received no questions on this matter.
The Board of Directors recommends a vote for each of the nominees for director. The second item is the approval of an advisory proposal on executive compensation.
Mr. Chairman, we have received no questions on this matter.
The Board of Directors recommends a vote in favor of this matter. The third item is the ratification of the selection of Ernst & Young as our independent auditors for the year ending December 31, 2025. Representatives of Ernst & Young, Jeremy Zedema and Cliff Kamek, are both in attendance. They have indicated they do not wish to make a statement at this meeting.
Mr. Chairman, we have received no questions on this matter.
The Board of Directors recommends a vote in favor of this matter. The fourth item is a shareholder proposal requesting adoption of a policy and amendment to the bylaws requiring the Chair of the Board be an independent member of the board in the next CEO transition. Operator, is the shareholder proponent Friends Fiduciary Corporation present to provide a statement?
Good morning, fellow shareholders and members of the board. My name is Amy Carr. I am the senior shareholder advocate at Friends Fiduciary Corporation. We invest on behalf of Quaker faith communities, schools, and organizations across the country, and we are long-term shareholders of State Street. I hereby move item four, the shareholder proposal requesting the State Street board adopt a policy to require the Chair of the Board of Directors, whenever possible, be an independent member of the board. This policy would be phased into the next CEO transition and compliance is waived if no independent director is available and willing to serve as chair. As a Quaker faith-based investment firm and long-term investor, we value prudent government structures and best practice in board-level governance that supports fiduciary duty and protects sustained shareholder value. State Street is an internationally recognized financial leader whose CEO also holds the position of the Chair of the Board of Directors.
We, like other long-term shareholders, seek best practice to ensure effective board oversight, including a separate and independent board chair. Investors have increasingly shown support for a leadership structure with separate Chair and CEO positions. There is a distinct trend toward support of the structure by investors since 2013, and a majority of S&P 500 companies have moved away from this combined role. Effective governance requires accountability. The CEO, as an employee, should be held accountable by the board. Holding both roles simultaneously gives the CEO unnecessary additional power and can within the board's authority, compromising its oversight. There has also been increased scrutiny of State Street for their management and decision-making around systemic issues such as climate change and diversity. As a result, some European clients have pulled their funds from State Street, increasing pressure on company management and requiring increased focus from State Street's CEO.
Separating the chair and CEO roles will allow the CEO and management more time to focus on the task of running the business in light of challenges like these, which demand focused attention from State Street's CEO and management. For these reasons, we urge shareholders to vote for this proposal. Thank you.
Thank you for the presentation.
Mr. Chairman, we've received no questions on this matter.
The Board of Directors recommends a vote against this matter. The fifth item is a shareholder proposal requesting a report disclosing whether and how the company addresses transition of workers and fairness to communities in its transition finance strategy. Operator, is the shareholder proponent Paul Risman present to provide a statement?
My name is Paul Risman. I'm presenting item five on the 2025 State Street proxy. Item five requests that the Board of Directors of State Street Corporation issue a report disclosing whether and how the company addresses transition of workers and fairness to communities in its transition finance strategy. At the board's discretion, proponent recommends the report cover the potential risks and opportunities related to State Street's transition finance efforts affecting workers and communities. A report on the social implications of transition finance makes sense for shareholders. Transition finance is big business. State Street exclaims in a corporate blog post that the energy transition presents what is perhaps a once-in-a-century opportunity for companies and investors. Yet, transition finance, if done without careful consideration, can be fraught with risk. Many transition mineral mining projects are located near indigenous or traditional community lands, for example, increasing the danger of human rights impacts from pollution or land grabbing.
The Business and Human Rights Resource Center is tracking 60 lawsuits filed against energy transition projects. A study of the Environmental Justice Atlas database found that one quarter of projects opposed by environmental defenders were stopped through protest, litigation, and other forms of popular mobilization. Forced labor has been found in polysilicon supply chains, leading to some shipments that were prevented from entering the U.S. Coal plant retirements, often financed by the private sector, have been held up due to worker protests. State Street investors deserve to know whether the firm's transition finance opportunities have been selected with due care and attention to these risks. Unfortunately, we are left in the dark on this topic. In my opinion, the company has failed to adequately describe whether and how it addresses the transition of workers and fairness to communities in its transition finance strategy.
A vote in favor of this proposal can help signify to our company that human impacts related to the financing of the energy transition are material to State Street.
Thank you for the presentation.
Mr. Chairman, we received no questions on this matter.
The Board of Directors recommends a vote against this matter. With no further questions on the voting matters, the voting polls will now close. Will the Inspector of Elections please report upon the matters presented for voting at the meeting?
Mr. Chairman, this is a preliminary report. The shareholders have voted to elect each of the 11 nominees for director. Each director received at least 95% of the votes cast. The shareholders have voted to approve a non-binding advisory proposal on executive compensation with a vote of approximately 92.5% of the votes cast.
The shareholders have voted to ratify the selection of Ernst & Young, LLP, as State Street's independent registered public accounting firm for the year ending December 31, 2025, with a vote of approximately 92.3% of the votes cast. The shareholders have voted against the adoption of a policy and amendment to the bylaws requiring that the Chair of the Board be an independent member of the board in the next CEO transition with a vote of approximately 74.2% of the votes cast. The shareholders have voted against the request for a report disclosing whether and how the company addresses transition of workers and fairness to communities in its transition finance strategy with a vote of approximately 88% of the votes cast.
Final vote tallies will be filed with the SEC in a Form 8-K within four business days of this meeting. I hereby adjourn the formal part of the meeting. I will now take additional questions from shareholders.
Mr. Chairman, we have a question for Ms. Fawcett from Mike Hurley. He notes first, "My congratulations on your successful term as lead director. Trust is the theme in yours and Ron's remarks in this year's annual report. You both deal with the high-level discussion quite well. My question is at the base of your pyramid. What has been the experience in the level of trust between the first-line manager and his or her team members during your tenure? How is it measured? How is it trending? Thank you for your contributions to State Street these many years."
Thank you, Mike, for your thoughtful question. As you quite properly point out, trust is a key culture trait. It is regularly reviewed and discussed at the board, including with management.
Your point about first-line to second-line and openness, I've seen a marked change in my time on the board. As you rightly point out, tone from the top matters, and trust is at the top of that pyramid for us. The board and its Human Resources Committee, chaired now by Sarah, but soon by John Raya as Sarah takes over as lead director, regularly reviews employee engagement scores, a process that has become much more sophisticated and helpful over the last few years under the leadership of Kathy Horgan. Those engagement scores in that survey and pulse surveys do cover trust in a variety of angles, and those scores keep improving. We have pulse surveys that we review and also year-end scorecards that we look at. Culture traits such as trust are a fundamental part of how people are reviewed up and down the organization.
As I noted, we have seen a year-on-year improvement in employee engagement scores. The last thing I would say, because trust really does matter, is I and other board members meet regularly with employees at all levels of the firm, and we will share amongst ourselves things that we hear. What do we think the state of the firm is and anything more that we need to do? In conclusion, I want to thank you for your excellent question and for highlighting a key trait, I think, of successful companies and those who create long-term shareholder value. Thank you, Mike.
Mr. Chairman, we have another question from Nate Myers, which is, "Why has State Street simply rebranded its ESG committee instead of eliminating it? Isn't it just cosmetic retreat, keeping the same activist policies under a more politically palatable name?"
Thank you, Mr. Myers. We actually don't have an ESG committee at either the board or at the management level. Management does have a very keen focus on its talent. We're in a services business, so attracting, motivating, and retaining the very best talent is quite important to us. We have a series of different management committees that focus on that. I think that concludes the questions. I thank you again for participating in our 2025 annual meeting. The meeting has now concluded.
Thank you for joining, and have a pleasant day. The host has ended this call. Goodbye.