Creating long-term value
Transforming for shareholders
In 2021, we completed a deep and thorough strategic review of our business mix and capital management approach to drive higher growth, higher returns, and greater capital efficiency. We focused on strengthening Principal® to win in growing markets and to create long-term shareholder value.
Below are highlights of how Principal is transforming to further generate value for our shareholders.
Sharpen our focus on our growth drivers.
Retirement in United States and select emerging markets
Global asset management
U.S. benefits and protection
We'll continue to invest in our growth drivers. These businesses are poised for growth and leverage our differentiators. They thrive on our integrated model, enabling us to deliver additional value through greater capital efficiency and, ultimately, return more capital to shareholders.
Achieve our financial targets.
With a refined focus on higher growth and more capital efficient businesses, we believe we're well-positioned to achieve our financial targets:
ANNUAL GROWTH IN EARNINGS PER SHARE1
9-12%
1 Non-GAAP operating earnings per diluted share
RETURN ON EQUITY2
15%+
2 Non-GAAP operating return on average equity, excluding AOCI other then foreign currency translation ajustment
FREE CAPITAL FLOW CONVERSION
75-85%
In 2021, we met or surpassed every one of our financial targets for 2021, positioning us to continue investing in our businesses while also benefiting shareholders.
Strengthen our capital management strategy.
Our strengthened approach to deploying our excess capital establishes clear priorities and targets deployment in four key areas:
TARGETED RANGES AS A PERCENTAGE OF NET INCOME
This refined approach to capital management supports our commitment of delivering long-term enterprise growth while allowing a significant amount of capital to be returned to shareholders.
Delivering our commitment to shareholders.
INCREASED CAPITAL RETURN TO SHAREHOLDERS
In 2022, we plan to return between $2.5-$3 billion of capital to shareholders, including $2.0-$2.3 billion of share repurchases, with a targeted 40% dividend payout ratio.
Share repurchases
Common stock dividends
Plan to return $2.5B - $3.0B of capital to shareholders in 2022 and up to $4.6Bbetween 2021-2022
2022 share repurchases includes the expected $800M of deployable proceeds from the reinsurance transactions and other capital management transactions announced in January.
Resulting in impressive total shareholder return.
Strong total shareholder return, regular dividends, and increased share repurchases all create value and enable shareholders to take part in the company's success.
TOTAL SHAREHOLDER RETURN
1 year (TSR)
Our 1-year total shareholder return (TSR) was 51%—higher than both our insurance peers (31%) and asset management peers (43%)3.
Going forward
We have a clear path to becoming a higher growth, more capital efficient company. As we close out 2021 and move into 2022, we remain focused on our long-term growth strategy that puts customers at the center of what we do and positions us to win, grow, and create shareholder value.