Principal Financial Group Inc

This advisory 'say-on-pay' proposal asks shareholders to approve, on a non-binding basis, the compensation paid to the Company’s Named Executive Officers as disclosed in the proxy, including the CD&A and compensation tables. Management is seeking this advisory endorsement to validate its pay-for-performance program structure, which emphasizes variable compensation tied to enterprise financial and strategic goals (e.g., Non-GAAP operating earnings, customer-driven growth metrics, free capital flow and people/culture metrics) and long-term equity awards weighted to PSUs and RSUs. The Company emphasizes retention and alignment through multi-year PSUs (70%) and time-based RSUs (30%), CEO and NEO ownership guidelines, clawback policies, and incentive plan risk reviews, and notes 2025 performance that supported incentive payouts and long‑term award vesting outcomes. The Board highlights that prior say‑on‑pay votes showed strong shareholder support (~95% in 2025) and uses that as context for continuing the current compensation design. Management argues that the programs attract and retain senior talent (including CEO pay changes tied to promotion), align pay with shareholder outcomes, and include governance protections (independent consultant, Committee oversight, anti-hedging, minimum vesting). Countervailing risks include the size and structure of awards (large PSU/RSU grants, target amounts) and the removal of full deductibility under current tax rules; the Board states it considered peer benchmarking, performance, and retention when setting targets and award levels. The advisory nature of the vote means the Board and Human Resources Committee will consider the outcome when designing compensation but are not legally bound by it. The Board recommends a 'For' vote as a signal of shareholder support for the overall compensation philosophy and to maintain continuity in the Company’s pay-for-performance framework.

This management proposal asks shareholders to approve the Principal Financial Group, Inc. 2026 Stock Incentive Plan, which would authorize 6,500,000 shares for issuance and change the company’s share-counting method from the prior fungible approach to a non‑fungible 1:1 counting for all award types. Management seeks approval to continue rewarding employees and non‑employee directors with equity to align interests with shareholders, aid retention and recruitment, and to modernize plan mechanics (notably removing fungibility that previously counted full‑value awards at a higher ratio). The proposal retains many governance protections from the prior plan: committee administration by independent directors, prohibition on repricing without shareholder approval, minimum vesting periods, dividend equivalent restrictions for options/SARs, clawback/recoupment alignment, and change‑of‑control default, while removing the annual individual employee grant limits. The Board asserts the requested share reserve and mechanics are reasonable given the Company’s historical burn rate (0.55% three‑year average), expected multi‑year grant needs (estimated four to five years of runway under management assumptions), and comparability to peer practice. Key investor considerations include the new non‑fungible counting (which may accelerate visible dilution compared with fungible counting), the elimination of per-employee grant limits (which reduces a specific governance constraint), and overall dilution impact; management provides contextual metrics (historical usage, expected duration, and governance safeguards) to mitigate these concerns. The Board recommends a 'For' vote, arguing the plan strikes an appropriate balance between enabling competitive equity compensation and preserving shareholder protections; investors should weigh the benefits of continued equity‑based alignment and talent retention against incremental dilution and the specific change to individual grant limits.