Good morning, and welcome to the State Street Annual Meeting of Shareholders. I would now like to turn the conference over to Ron O'Hanley. Please go ahead, sir.
Good morning. This is Ron O'Hanley, State Street's Chairman and Chief Executive Officer. Welcome all of you to State Street's twenty twenty Annual Meeting of Shareholders. I speak to you today as the world is still dealing with the worst public health crisis and its associated economic shutdown in more than a century, Even as many communities begin to consider a gradual transition away from lockdown, we decided to conduct this year's annual meeting virtually to protect everyone's health and safety. And I thank you for attending.
On behalf of State Street, I want to extend our sympathy to those affected by COVID-nineteen and its economic impact, as well as our gratitude to all the healthcare workers, first responders and frontline workers around the world keeping us safe. Let me first introduce the other members of the Board participating today. Amelia Faucette, our Independent Lead Director Marie Chandoa Patrick Saint Agnion Lynn Dugle William Frieda Sarah Matthew William Meaney, Sean O'Sullivan, Richard Sergal and Greg Summey. Also participating are State Street's Chief Financial Officer, Eric Abouhoff and State Street's Chief Legal Officer and Corporate Secretary, Jeffrey Karp as well as other members of our management team. Shannon Stanley, Managing Director and Assistant Secretary will be assisting with 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 speak at the meeting. In the event of a technology failure that prevents us from continuing, we will keep the line open and rectify the issue with the intention to resume as soon as practicable. Please then remain logged in if you would like to continue your participation through the remainder of the meeting. Questions or comments are welcome.
There will be two forums for questions. One prior to when the polls close for questions 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. We ask that each shareholder provides his or her name and affiliation as either an individual or institutional shareholder. Please also note, questions for the formal part of the meeting must be pertinent to matters properly brought before the meeting.
To ensure that everyone has an opportunity to ask a question, shareholders are limited to one question for each voting matter and one question during the general question and answer period. When submitting a question for a voting matter, please identify the matter to which your question pertains. Questions and comments may be summarized and if appropriate will be addressed, time permitting. These guidelines are administered at my discretion. Depending on time, the number of pending questions and other factors, we may permit additional appropriate questions.
Before we proceed through the formal meeting agenda, I'd like to provide a brief report on State Street, including our response to the COVID-nineteen pandemic. These remarks and potentially any responses to shareholder questions at this meeting may contain some forward looking statements. So I remind you that actual results may differ materially from those statements due to important considerations, including the risk factors in our 10 ks and other SEC filings. As a global company operating in 29 countries, we have been addressing the coronavirus outbreak since its very inception. With significant operations and approximately 3,000 employees in China, we had somewhat of a head start on adapting our global operating model to the safety concerns of our approximately 39,000 employees across the globe and the rapidly changing needs of our clients.
Our actions in response to this global health crisis have centered on maintaining employee safety and business continuity and resiliency, while concurrently supporting our clients, the financial markets and the broader economy. Let me start with our people. Our global crisis team has worked continuously since mid January with local management and relevant authorities across the world to safeguard employee health and safety. Our IT capabilities rapidly allowed us to add capacity for remote access solutions, while also maintaining cyber safety. And today, approximately 90% of our global workforce is working from home.
We announced that through the end of the year, we have suspended any workforce reductions other than for performance or conduct reasons in light of the COVID-nineteen crisis. I believe that this is the right decision for our employees, our clients and our communities. It aligns with our culture and values and reflects our financial strength. Through the State Street Foundation and other corporate giving, we have donated substantial money and time to pandemic relief around the globe. Our key focus has been on supporting our clients and the financial system as State Street plays a central role in market infrastructure.
In terms of our clients, this crisis has demonstrated our deep operational capabilities at a time of significantly increased business volumes. Our global operating model has enabled us to run split operations and efficiently transfer work with minimal disruption to client service. Due to the scale and reach of the current COVID-nineteen crisis, asset owners and asset managers have been impacted globally with many struggling to cope with market disruptions, reduced workforces, limited access to normal workplace infrastructure and continuing uncertainty. To assist these clients, we have focused on a number of priorities during recent weeks. First, we substantially increased our level of client engagement and communication, ensuring we better understand client needs and how we can rapidly assist them in this unique and challenging environment.
Second, we are maintaining a state of operational readiness through increased IT resource capacity with strong and tested business continuity plans that were successfully activated. Third, we are providing a suite of liquidity solutions including deposits, centrally cleared repo and access to a full range of money market funds via our investment portal Fund Connect. Global Advisors also has a number of specialized cash strategies. In addition, our global credit finance team supports clients with overdraft capacity and committed lines of credit. We are also working to support the broader economy.
State Street is engaged in various Federal Reserve programs that support the flow of liquidity and credit. We facilitated approximately 50% of the Fed's money market mutual fund liquidity facility usage during the first quarter, while also serving as the custodian and accounting administrator for the commercial paper funding facility and the primary and secondary market corporate credit fund facilities. As we look out over the longer term, the evolving needs of all of our clients are at the center of our strategy to continue to be our clients' essential partner. We are providing the technology and scale they need to grow as the current uncertainty dissipates and global macroeconomic conditions recover. We believe this crisis will accelerate the desire of clients to consider outsourcing more of their operations to a partner like State Street with a fully capable data driven front to back servicing platform, something that I will talk more about shortly in the context of our corporate strategy update.
While we cannot predict the scope and duration of the pandemic and the associated economic impact, we remain clear on three core priorities. First, supporting our employees and our communities second, providing service and operational excellence to our clients and third, driving value for our shareholders. I'd now like to turn to a review of our 2019 financial performance. 2019 began with significant industry challenges, including financial market weakness, falling interest rates and increased client fee pricing pressure. As a result, our GAAP basis revenue, pretax margin, diluted earnings per share and return on average common equity all decreased in 2019 from 2018.
In the face of these headwinds, we acted aggressively early in 2019 to stabilize revenues, reduce expenses and make progress on key business objectives. Our actions included strengthening our value proposition to clients, including the ongoing build out of our front to back State Street Alpha platform successfully executing a firm wide expense savings program that exceeded initial targets and resulted in approximately $450,000,000 $415,000,000 in gross expense savings during 2019 and reorganizing the leadership of our multi regional international business under a single executive to further our growth objectives. Due to these actions and the steady recovery of U. S. Average market levels in 2019, our financial results in the second half of the year improved relative to the first half of the year.
On a GAAP basis, second half total revenue and total fee revenue both increased approximately 2% compared to the first half of the year. On a non GAAP basis, excluding notable items and over the same periods, total expenses decreased 3% and EPS increased 29%, while our pretax margin expanded three eighty basis points and our ROE expanded two twenty basis points to 27.711.9% respectively. Reconciliations of these non GAAP measures to GAAP are included in our proxy statement for this meeting available on the virtual portal in the Investor Relations portion of our website. Throughout 2019, we also maintained strong capital and liquidity positions ending the year with common equity Tier one ratio of 11.7% and a liquidity coverage ratio of 110%. Turning to our strategy.
After detailing an updated business strategy last year, twenty twenty marks an important turning point for us as we continue to implement a new way of becoming a better provider for our clients. As I mentioned earlier in my remarks, none of us anticipated this pandemic, which has disrupted the global economy and our lives in such a short time. The crisis has sharpened the urgency with which we are now seeking to support our clients around the world with more comprehensive services and a global operating model that can quickly adapt to their changing needs. In this regard, the COVID-nineteen pandemic has reaffirmed our strategy to become our clients' essential partner through State Street Alpha, our front to back servicing platform and providing the technology scale our clients need to grow. To execute that strategy, we are transforming how we deliver asset servicing and asset management excellence by building a high performing organization designed to respond to our clients' increasing expectations for responsiveness, problem solving and results and that also allows us to attract the industry's best talent.
In short, I am pleased by the direction and progress of our strategy execution. Looking ahead, while the markets may be unpredictable, we are well prepared to navigate potential ongoing volatility with a strong balance sheet, capital position, and proven operational capabilities. State Street remains outward looking, globally connected and laser focused on helping our clients achieve better investment outcomes for the people they serve. We have navigated through good times and bad with our clients for over two centuries and this moment will be no different. We stand ready to support our clients and our global workforce in any capacity we can.
In conclusion, I want to reiterate how proud I am of the extraordinary efforts of State Street's employees, our management committee and the Board through this difficult period. These are challenging times, but State Street is responding well. The Board, the management committee and I are confident in our strategy and that State Street can emerge from the COVID-nineteen pandemic stronger and grow sustainable value for all our stakeholders. Thank you for your continued investment and confidence in us. Let's now move into the formal part of our agenda today.
I would like to call to order State Street Corporation's twenty twenty Annual Meeting of Shareholders. As I indicated earlier, I will take questions regarding the specific matters presented at the meeting before the polls close. After the adjournment of the formal part of the meeting, I will take general questions about our company in a separate session. I appoint Christopher J. Woods of American Election Services as Inspector of Elections to determine the shares represented at the meeting and by proxy and the validity of the proxies and votes and count all votes.
Will the inspector of elections please report as to a quorum?
Thank you, mister chairman. There are represented in person, online, or by proxy at this meeting at least 90.6% of the total outstanding shares, and therefore, our quorum is indeed present.
With the quorum present, I declare the meeting properly convened. If you have voted your shares prior to the start of the annual meeting, your vote has been received by the Inspector of Elections and there is no need to vote those shares during the annual meeting unless you wish to revoke or change your vote. If a shareholder wishes to vote through the voting portal, he or she may do so by clicking on the voting button on the virtual meeting portal and follow the instructions. The polls are now open. The notice of meeting sets forth three items, each of which is described in the proxy statement.
I will present these items before the meeting in the order they appear in the proxy statement. If you have a question specifically about a proposal, please note the proposal matter when submitting a question to have it addressed while the polls are open. The first question is the election of 11 director nominees. 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.
The Board of Directors recommends a vote in favor of this matter. The third item is the ratification of the selection of Ernst and Young as our independent auditors for 2020. I would now like to introduce representatives of Ernst and Young, Robert Wadley and Troy Butner. They have indicated they do not wish to make a statement at this meeting. The Board of Directors recommends a vote in favor of this matter.
I will now pause and review questions regarding the voting matters.
Mr. Chairman, we have no questions on the specific voting matter.
There are no questions on the voting matters. There will be another opportunity for questions during the general question and answer session in a few minutes. The polls are now closed. Will the Inspector of Elections please report upon the matters presented for voting in the meeting?
Mr. Chairman, this is a preliminary report. The shareholders have voted to elect each of the 11 nominees for director with each director receiving at least 93.4% of the votes cast. Additionally, the shareholders have voted to approve a non binding advisory proposal on executive compensation with a vote of approximately 70.1% of the votes cast. And finally, the shareholders have voted to ratify the selection of Ernst and Young as State Street's independent registered public accounting firm with a vote of approximately 95.2% of the votes cast.
Final vote will be filed with the SEC in a Form eight ks within four business days of this meeting. I hereby adjourn the formal part of this meeting. Before we move to the general question and answer session, I'd like to recognize Ken Burns for his extraordinary sixteen years of service on our Board. Ken retires as a Director today after serving on the Board since October 2003. Ken served with distinction during this entire tenure, contributing a sharp intellect and grace to the deliberations of the full Board and all of its committees.
Perhaps most notably, Ken served as Independent Lead Director for ten years, ending in 2019 redefining the role to the appreciation of all of our stakeholders including the Board, investors and regulators and setting the standard for others including his successors. Ken's dedication, integrity and keen business acumen have been invaluable to the Board and senior management in positioning State Street for continued success and in navigating challenging times. The Board and State Street expressed their deep appreciation to Ken for his extraordinary commitment and performance of his duties. Thank you, Ken. I will now take any additional questions from shareholders.
Mr. Chairman, we have a question from Scott Shepherd from the National Center for Public Policy. The question states, State Street intends to hold American businesses hostage to its narrow political preferences by demanding that companies in which it invests ascribe to ESG goals. While sometimes nobly articulated, these are, in fact, just a collection of left wing policies that, if and when enacted, end up costing companies vast sums for little or no long term benefit, especially during the economic crisis that is following on the heels of the lockdown. How can you justify using your client's shareholder status to apply a legally suspect concentration of market power to demand changes that do not serve them as shareholders or the national interest?
State Street is the third largest asset manager in the world and a very large manager of index funds takes its commitment to shareholder stewardship quite seriously. The vast majority of our funds are held in index funds, which by definition means that as long as a company is in the index, we will own the company. Therefore State Street is perhaps the prototypical long term investor, and invest truly for the long term. As long as that company is in the index, we will own it. Therefore, what State Street Global Advisors does in its stewardship activities is ensure and look to the boards of these underlying companies to make sure that they are looking at the long term value creation.
Any position or stewardship activity that stage three performs is with that sole goal of ensuring long term shareholder value creation. Ultimately, it's not our decision what companies do. And ultimately, we will remain invested in those companies. But because we do not have the ability to not be invested in them, we take the stewardship role seriously, and we will continue to do so.
Mr. Chairman, we have another question. The Carpenter Union Pension Funds have a collective ownership position of 1,352,400 shares of the company's common stock. As long term investors, we appreciate the priority the company has placed on protecting employee and customer health and safety issues related to the pandemic. During these turbulent times, we have strong confidence in the company's Board and senior management team to effectively address the challenges ahead.
The company spent $500,000,000 on share repurchases in the first quarter and then temporarily suspended the repurchase program. What will be the factors that will guide the Board's decision to remove the suspension going forward? Thank you.
Firstly, I'd like to thank the Carpenter's Union for its trust in us, and we appreciate the long term relationship, the client relationship with the union. Share repurchases are a form of return to capital to our investors. Investors make a decision to invest in a company with an idea of getting returns both short term and long term. We make shareholder, we make share repurchase decisions, and the board approves those decisions based on our ability to do so, and also a view of what the environment is. So at this point, as I said earlier, it is an uncertain environment.
We have, said that we are suspending share repurchases through the second quarter. We will examine the environment in the third quarter, make a recommendation to the board, and the board will then decide whether or not to do so. But we will only do so as long as we are confident in our ability to maintain our strong capital position.
Mr. Chairman, we have no further questions.
Well, concludes the questions. I thank you again for participating in our twenty twenty Annual Meeting. And I look forward to seeing you again, hopefully the next time in person. Please everyone stay safe.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.