From the Board of Directors
Last year I shared details of the strategic review that charted a clear path forward for Principal®. You’ll recall that one of our key objectives was to drive even greater shareholder value. As you’ll see in this report, 2022 was a year of heads down execution—delivering on the promises we made. The company and its executive team operated with focus and discipline. And I’m grateful to our directors for their leadership and oversight.
Coming out of the strategic review, Principal exited two lines of business that no longer met our financial targets and completed reinsurance transactions in May. Moving ahead, the focus is on the company’s higher growth, more capital efficient lines of business: global asset management, retirement, and benefits and protection.
That work is paying off, as evidenced by our 2022 results, delivered in a challenging environment. It's paying off for our shareholders, too—increasing total shareholder return and excess capital returned via common stock dividends and share repurchases.
Board focus and strength
The Board provides strategic oversight for Principal, ensuring the company is delivering against its commitments and targets. The extensive time we spent together during the 2021 strategic review has served our Board well. The rapport we built and the rigor we employed continued to strengthen this past year. I appreciate the camaraderie, candor, and engagement within the Board. This is a team deeply committed to their work and to each of you.
One of my key responsibilities as lead director is to build and maintain a strong bench of talent for Board refreshment. Our Nominating and Governance Committee actively seeks complementary skills and perspectives, representing different backgrounds, industries, and expertise.
As of Dec. 31, 2022, 62% of the members on our board of directors are diverse in gender, race, or national origin. Three of our four committees are chaired by women, one of whom is a person of color. Additionally, 54% of our directors have joined the Board within the past five years. Our average tenure is 6.5 years.
In 2022, we added one new director—H. Elizabeth (Liz) Mitchell. Liz is the former president and chief executive officer of Renaissance Reinsurance U.S. Her background in managing diversified operations and driving excellence across a portfolio is a value-add to the Board and the executive team.
2022 was a year of heads down execution—delivering on the promises we made.”
Good business done the right way
Sustainability continues to be a key area of focus for the company in serving its customers and investors. Through proprietary research, such as the Principal Global Financial Inclusion Index, Principal Financial Well-Being Index, and Principal Super Savers Survey, we are helping identify factors and behaviors that support or derail financial security and financial inclusion. The ensuing conversations can help those in positions of authority collaborate on solutions intended to provide more people with economic stability today and long into the future.
The company’s continued commitment to sustainable investing includes releasing its first Sustainable Financing Report (PDF) and adding sustainable investment options in markets around the world. These are great next steps in what is becoming an area of measured expertise for Principal.
Aligned to the company’s purpose, Principal® Foundation continued to focus its philanthropic investments on removing barriers to and creating opportunities for people working toward financial security. Principal Foundation contributed more than $17 million this year to help meet basic needs, expand access to arts and culture, and support financial empowerment and development of entrepreneurs and small businesses.
Delivering for you
In looking at the 2022 year-end results, I want to compliment the Principal management team and employees across the organization. The results are indicative of what I’ve come to appreciate about the company—their unwavering pledge to deliver on commitments.
This includes creating long-term shareholder value, which was evident in 2022 through strong total shareholder return and returning $2.3 billion of capital to shareholders. Also notable: The PFG common stock price hit a record high in November and ended the year up 16% over year-end 2021.
As someone charged with maximizing your investment in Principal, I’m gratified that 2022 proved to be such a rewarding year for Principal and for our shareholders. These are strong results, the fruition of substantial work done over the last two years despite a challenging macro environment.
I’m gratified that 2022 proved to be such a rewarding year for Principal and for our shareholders.”
We'll help ensure the company continues to pursue attractive growth opportunities and leverage its competitive advantages. Doing so will help generate returns in excess of cost of capital and enable Principal to return more of that excess capital to you.
I’ll echo Dan in noting that Principal is now an even more resilient company, well positioned to withstand a variety of economic conditions and deliver long-term growth. This is good news for you and all company stakeholders.
Principal Financial Group
This report contains forward-looking statements. Actual results may differ materially from the results anticipated in these forward-looking statements. For a complete explanation, and a list of the risks, uncertainties, and factors that could cause or contribute to such material differences, see our forward-looking and cautionary statements.