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Dear Fellow Shareholders:

You are invited to attend the annual meeting of shareholders on Tuesday, May 17, 2022, at 9:00 a.m., Central Daylight Time. Due to the continuing public health impact of the coronavirus outbreak (i.e., COVID-19) and to support the health and well-being of our shareholders and other stakeholders, we have decided that this year’s annual meeting will be a completely virtual meeting of shareholders, which will be conducted solely online via live webcast. You will be able to participate in the annual meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting: www.meetnow.global/MVFPDCX. There is no physical location for the annual meeting. As we’ve done in the past, Principal is taking advantage of the Securities and Exchange Commission’s rule that allows companies to provide proxy materials for the annual meeting via the internet to registered shareholders.

The notice of annual meeting and proxy statement provide an outline of the business to be conducted at the meeting. We will also report on the progress of the Company and answer shareholder questions.

We encourage you to read this proxy statement and vote your shares. You may complete, date and sign a proxy or voting instruction card and return it in the envelope provided (if these materials were received by mail) or vote by using the telephone or the internet. Thank you for acting promptly.

Sincerely,

Daniel J. Houston
Chairman, President and Chief Executive Officer

April 4, 2022

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Notice of Annual Meeting of Shareholders

Meeting date:

Tuesday, May 17, 2022

Time:

9:00 a.m., Central Daylight Time

Location:

This will be a virtual only meeting which you can join at:
www.meetnow.global/MVFPDCX.

Agenda:

Elect three Directors;

Advisory approval of the compensation of our named executive officers;

Ratify the appointment of Ernst & Young LLP as the Company’s independent auditors for 2022;

Transact such other business as may properly come before the meeting.

The Company has not received notice of other matters that may be properly presented at the annual meeting.

You can vote if you were a shareholder of record on March 23, 2022. It is important that your shares be represented and voted at the meeting. Please vote by any one of the following methods:


	Through the Internet: visit the website noted in the notice of internet availability of proxy materials shareholders received by mail, on the proxy or voting instruction card, or in the instructions in the email message that notified you of the availability of the proxy materials.			By telephone: call the toll-free telephone number shown on the proxy or voting instruction card or the instructions in the email message that notified you of the availability of the proxy materials.			Complete, sign and promptly return a proxy or voting instruction card in the postage paid envelope provided.

By Order of the Board of Directors

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Mark S. Lagomarcino
Senior Vice President, General Counsel and Secretary

April 4, 2022

Approximate Date of Commencement of Mailing of Proxy Materials: April 4, 2022

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 17, 2022:

The 2022 Annual Report, 2022 Proxy Statement and other proxy materials are available at
www.principal.com/annualmeeting.

Your vote is important! Please take a moment to vote by internet, telephone, or proxy or voting instruction card as explained in the How Do I Vote sections of this document.

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Director Qualifications, Director Tenure, Process for Identifying and Evaluating Director Candidates and Diversity of the Board

The Board Nominating and Governance Committee (the “Committee”) regularly assesses the expertise, skills, backgrounds, competencies and other characteristics of Directors and candidates for Board vacancies considering the current Board composition and the Company’s existing strategic initiatives, risk factors, and all other relevant circumstances. The Committee also assesses Directors’ and candidates’ personal and professional ethics, integrity, values and ability to contribute to the Board, including current employment responsibilities. In addition to personal attributes, the Board values experience as a current or former senior executive in financial services, in international business, and with financial management or accounting responsibilities. Competencies valued by the Board include strategic and results orientation, comprehensive decision making, risk management skills and an understanding of current technology issues. The Committee often uses an independent consultant to assist with this responsibility, and these assessments provide direction for searches for Board candidates and in the evaluation of current Directors. The Committee reviews the performance of each Director whose term is expiring as part of the determination of whether to recommend his or her nomination for reelection to the Board. Input to this process is also received from the other Directors and management and an independent consultant may be, and usually is, engaged to assist with these reviews. Director performance and capabilities are evaluated against desired characteristics and relevant considerations, including those noted above. Following the Committee’s discussion, the independent consultant, if one is used, or the Committee Chair provides feedback to the Directors who were evaluated. The Board annually conducts a self-evaluation regarding its effectiveness, and the Audit, Finance, Human Resources and Nominating and Governance Committees also annually evaluate their respective performance.

All Board members have:

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Personal character that supports the Company’s core value of integrity;

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Training or experience that is useful to Principal in light of its strategy, initiatives and risk factors; and

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A demonstrated willingness and ability to prepare for, attend and participate effectively in Board and Committee meetings.

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Diversity of the Board is a longstanding and valued objective, as reflected in the Board’s Diversity Policy. Therefore, in addition to other considerations, the Nominating and Governance Committee reviews the Board’s diversity, including in terms of backgrounds, experiences, expertise, gender, generation, national origin, and race when recruiting new Directors. The current Board reflects these values, for example, in the gender (42% female) and racial (33% people of color) composition of our independent Directors. The below chart provides the details of the entire Board.as of March 19, 2022.

Board Diversity Matrix (As of 3/19/2022)

Total Number of Directors

	Female		Male		Non-Binary		Did Not Disclose Gender
Part I: Gender Identity
Directors		5		8		0		0
Part II: Demographic Background
African American or Black		1		1		0		0
Alaskan Native or Native American		0		0		0		0
Asian		0		0		0		0
Hispanic or Latinx		0		2		0		0
Native Hawaiian or Pacific Islander		0		0		0		0
White		4		5		0		0
Two or More Races or Ethnicities		0		0		0		0
LGBTQ+						0
Did Not Disclose Demographic Background						0

The Board’s diversity objective reflects the values of the Company as well. Principal has long been recognized as an exceptional place to work.

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In 2021, Pensions and Investments placed Principal on its list of Best Places to Work in Money Management for companies with 1,000 or more employees for the 9th consecutive year;

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IDG’s Computerworld named Principal one of the 100 Best Places to Work in Information Technology for the 20th year, ranking No. 29;

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Earlier this year, Fortune magazine named Principal one of its 2021 Most Admired Companies. Principal is consistently recognized for its commitment to fostering a diverse and inclusive environment where employees can thrive, advance, and share their unique perspectives;

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In 2021, Principal was again named to Forbes’ list of Best Places for Women to Work;

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Principal was recognized as one of the 2021 Seramount Top Companies for Executive Women—Hall of Fame 20+ years;

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Forbes named Principal one of America’s Best Employers for Diversity, ranking 109;

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Principal earned a perfect score on Disability:IN’s Disability Equality Index;

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We have 10 employee resource groups (“ERG”) connecting 3,725 ERG members based on similar interests or aspects of diversity, including disabilities, gender, military experience, race, sexual orientation, and sustainability;

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Principal ranked #12 on Diversity MBA’s 50 Out Front: Best Places to Work for Women and Diverse Managers;

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Principal was named a member of the 2021 Bloomberg Gender-Equality Index;

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And we received a score of 100/100 on the Corporate Equality Index, naming us one of the Best Places to Work for LGBTQ Equality for the 7th straight year.

The Board’s effectiveness benefits from Directors who have the necessary skills, backgrounds, and qualifications and who also increase the Board’s diversity. Director tenure and Board refreshment are important topics that receive considerable Board focus. The Board believes that its thorough Director performance reviews and healthy Board refreshment processes better serve Principal and its stakeholders than would mandatory term limits. Strict term limits would require that Principal lose the continuing contribution of Directors who have invaluable insight into Principal and its industry, strategies and operations because of their experience with Principal. Nevertheless,

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Directors’ terms must not extend past the annual meeting following their 72nd birthday. The Board tenure of the independent Directors as of March 18, 2022, is reflected in the chart that accompanies this text. The average tenure of Principal’s independent Directors as of that date is 7.58 years. Sandra L. Helton, who has served on the Board since 2001, will retire immediately following our 2022 Annual Shareholders Meeting continuing our process of regularly refreshing the talent and perspectives reflected on our Board.

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The Board tenure of the Directors, as reflected in the chart, balances deep knowledge of the Company, the industries in which it operates, and relevant issues, with fresh perspectives and additional expertise, while providing the oversight and independence needed to meet the interests of our shareholders and other stakeholders.

Communicating with stakeholders including clients, customers, employees, and investors, has always been an important part of how Principal conducts its business. Principal has had in place for some time a formal engagement process with shareholders around matters of corporate governance. These discussions provide us with helpful insight into shareholders’ views on current governance topics, which are then discussed with the Nominating and Governance Committee and the full Board. This continuing process regularly supplements relevant communications regarding corporate governance and other topics made through the Company’s website and by its Investor Relations staff.

The Nominating and Governance Committee will consider shareholder recommendations for Director candidates sent to it c/o the Company Secretary. Director candidates nominated by shareholders are evaluated in the same manner as Director candidates identified by the Committee and search firms it retains. In addition, a shareholder or group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock (“Common Stock”) continuously for at least 3 years, can nominate director candidates, constituting up to 20% of the Board.

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Proposal One—Election of Directors

The Board has three classes, each having a three-year term. All of the nominees are currently Directors of Principal. We expect that all the nominees will be able and willing to serve if elected. However, if, prior to the annual meeting of shareholders, any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted at the 2022 Annual Meeting for another person nominated as a substitute by the Board, or the Board may reduce the number of Directors.

The Board of Directors recommends that shareholders vote “For” all the nominees for election at the Annual Meeting.

Nominees for Class III Directors with Terms Expiring in 2025

	Michael T. Dan Age: 71 Director Since: 2006			Committees: Human Resources and Nominating and Governance Mr. Dan was Chairman, President and Chief Executive Officer of The Brink’s Company, a global provider of secure transportation and cash management services, from 1999 until 2011. The Brink’s Company had 70,000 employees worldwide, operations in over 100 countries and $3.8 billion in revenue in 2011. Prior to joining Brink’s, Mr. Dan served as President of Armored Vehicle Builder, Inc. Skills and Qualifications: In addition to leading and being responsible for financial management of Brink’s, Mr. Dan has executive level experience in accounting and finance, executive compensation, financial services, human resources and talent management, international operations, marketing, mergers and acquisitions, product development, risk management, and strategic planning. Education: Studied business and accounting at Morton College in Cicero, Illinois, and completed the advanced management program at Harvard Business School.
	Blair C. Pickerell Age: 65 Director Since: 2015			Committees: Finance and Nominating and Governance Public Directorships: Link Real Estate Investment Trust (Nomination Committee and Chair of the Remuneration Committee); Dah Sing Banking Group Limited (Chair of the Risk Management and Compliance Committee); First Pacific Company Limited (Finance and Corporate Governance Committees) Former Public Directorships/Past 5 Years: Dah Sing Financial Holdings Limited Mr. Pickerell served as Head of Asia of Nikko Asset Management from 2010-2014 and Chairman Asia from 2014-2015. From 2007-2010, he was CEO, Asia, at Morgan Stanley Investment Management. He has also served as Chief Executive, Asia Pacific, of HSBC Asset Management and as Chairman of Jardine Fleming Funds. Mr. Pickerell’s current international service includes memberships on the Supervisory Committee for the Tracker Fund of Hong Kong; on the International Advisory Council of the Faculty of Business and Economics of The University of Hong Kong; and Chairman of the Harvard Business School Association of Hong Kong. Skills and Qualifications: In addition to his extensive leadership record in the investment and asset management and financial services industries, Mr. Pickerell has executive level experience in accounting and finance, asset and investment management, retail consumer, executive compensation, financial services, human resources and talent management, international, marketing, mergers & acquisitions, product development, risk management, strategic planning and sustainability/ESG. He is fluent in Mandarin Chinese. Education: Bachelor’s and master’s degrees from Stanford University and an M.B.A. from Harvard Business School.

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Clare S. Richer

Age: 63
Director Since: 2020

Committees: Audit and Finance (Chair)

Public Directorships: Bain Capital Specialty Finance Co. (member of the Audit, Compensation and Nominating/Governance Committees), State Street Global Advisors SPDR ETF Mutual Funds (member of the Audit Committee), Trustee of the University of Notre Dame (member of the Compensation, Investment, Finance and Faculty Affairs Committees), and the Alzheimer’s Association, MA/NH.

Ms. Richer was Chief Financial Officer of Putnam Investments from 2008-2017 and has more than 25 years of investment management experience. Prior to joining Putnam, Ms. Richer held several roles at Fidelity Investments from 1983-2008.

Skills and Qualifications: In addition to having deep experience in governance, compliance and risk in highly volatile, heavily scrutinized environments, Ms. Richer has executive level experience in accounting and finance, asset and investment management, executive compensation, financial services, human resources and talent management, product development, risk management, strategic planning and technology.

Education: B.B.A. from University of Notre Dame.

Continuing Class I Directors with Terms Expiring in 2023

Jonathan S. Auerbach

Age: 59
Director Since: 2019

Committees: Finance, and Nominating and Governance

Mr. Auerbach has been Executive Vice President, Chief Strategy, Growth and Data Officer of PayPal, Inc., a financial technology company, since 2015. In his role, he leads PayPal’s global strategy, data science, business development, and M&A initiatives. Prior to joining PayPal, he was Chief Executive Officer of SingTel’s Group Digital Life from 2013-2014 and spent over 26 years with McKinsey & Company serving in a variety of executive roles in Asia and North America, including leading the Asian Telecommunications, Media and Technology Practice, the Singapore Office, and Southeast Asia Region, and the North American High-Tech Practice.

Skills and Qualifications: Mr. Auerbach has executive level experience in consumer, executive compensation, financial services, human resources and talent management, international, marketing, mergers & acquisitions, retail consumer, strategic planning, sustainability/ESG and technology.

Education: Bachelor’s degree from Dartmouth College, and a B.A. and M.A. from Oxford University.

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Mary E. Beams

Age: 65
Director Since: February 2021

Committees: Audit and Finance

Public Directorships: FNZ Trust U.S. Board (Chair of the Board), The Long-Term Stock Exchange Group (Board member), Salesforce (Strategic Advisory Board Member for America’s), Mount Auburn Hospital—the Beth Israel Lahey System (Board Member and Member of Finance Committee)

Former Public Directorships/Past 5 Years: BrightSphere Investment Group (Audit and Compensation Committees), Aretec (Parent of Cetera Advisors) (Chair of Audit Committee, Member of Risk and Compensation Committees).

Ms. Beams has been Co-CEO, LTSE Group and Services at Long Term Stock Exchange since 2021. She served as the CEO of Retirement Solutions at Voya Financial Inc. from 2011 until 2015. She also served as Counselor at the Department of State from June to December 2017. Prior to joining Voya, she served as President and CEO of TIAA-CREF Individual & Institutional Services, LLC from 2004 to 2010; Partner and President, Global Business Development, Head of Scudder Offshore Business, President, Scudder U.S. Brokerage Services, and Head of U.S. Direct Retail Business from 1997 to 2003, Senior Managing Director of Fleet Investment Advisors, Inc. from 1993 to 1997; Director of the Consumer Card Group of American Express Company from 1988 to 1993; and Senior Vice President of Retail Banking of Citibank from 1984 to 1988.

Skills and Qualifications: Ms. Beams has executive level experience in accounting and finance, asset and investment management, retail consumer, institutional, executive compensation, financial services, human resources and talent management, international, marketing, distribution, mergers and acquisitions, product development, risk management, strategic planning, sustainability/ESG, and technology.

Education: Bachelor’s degree in English from Boston College, a Certificate of Special Studies in Strategic Planning from Harvard University, and an M.B.A. in Marketing and Finance from Columbia University.

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	Jocelyn Carter-Miller Age: 64 Director Since: 1999 (Principal Life), 2001 (the Company)			Committees: Human Resources (Chair), Nominating and Governance and Executive Public Directorships: Arlo Technologies, Inc. (Audit Committee, Chair of Compensation Committee); Interpublic Group of Companies, Inc. (Audit and Executive Committees, Corporate Governance and Social Responsibility Chair), Backblaze, Inc. (Compensation Committee Chair, Audit Committee member, and Nomination and Governance Committee member) Former Public Directorships/Past 5 Years: Netgear, Inc. (Audit and Compensation Committees) Ms. Carter-Miller has been President of TechEd Ventures since 2005, which specializes in the development and marketing of high performance educational and personal empowerment programming. She was Executive Vice President and Chief Marketing Officer of Office Depot, Inc. from February 2002 until March 2004, with responsibility for the company’s marketing for its 846 superstores, contract, catalog and e-commerce businesses in the United States and Canada and operations in 15 other countries. Before joining Office Depot, she was Corporate Vice President and Chief Marketing Officer of Motorola, Inc. with overall responsibility for marketing across its $30 billion revenue base and diverse businesses. She also had general management responsibility while at Motorola for network operations in Latin America, Europe, the Middle East, and Africa. Prior to joining Motorola, she was Vice President, Marketing and Product Development at Mattel, Inc. She serves on nonprofit boards and is a NACD National Board Member and a former President of the League of Women Voters of Broward County. Ms. Carter Miller was a 2013 NACD Directorship 100 Honoree, a Savoy Power 300: 2016/2021 Most Influential Black Corporate Directors, a 2017 Directors & Boards Director to Watch, and a 2018 Most Influential Corporate Directors by WomenInc. Skills and Qualifications: In addition to her marketing leadership background, Ms. Carter-Miller has executive level experience in accounting and finance, brand management, retail consumer, executive compensation, advertising, sales, multinational companies, international operations, human resources and talent management, marketing, mergers and acquisitions, product development, project management, strategic planning, sustainability/ESG, technology and leadership development and training. She also has passed the certified public accountant exam. Education: Bachelor’s degree in Accounting from the University of Illinois and an M.B.A. in Finance and Marketing from the University of Chicago.
	Scott M. Mills Age: 54 Director Since: 2016			Committees: Audit, Human Resources and Executive Mr. Mills has been Lead Director since January 2020. Mr. Mills has been President and Chief Executive Officer of BET Networks since September 2021. Prior to that, he was President of BET Networks from 2018 through September 2021, Executive Vice President and Chief Administrative Officer of Viacom, Inc. from 2015 through 2017 and Executive Vice President of Human Resources and Administration from 2012 to 2015. Prior to that, he was President and Chief Operating Officer of Viacom’s BET Networks unit, where he previously served as Chief Financial Officer and President of Digital Media. He worked in investment banking and served as Deputy Treasurer for the City of Philadelphia before joining BET. Skills and Qualifications: Mr. Mills has executive level experience in accounting and finance, asset and investment management, executive compensation, financial services, human resources and talent management marketing, product development, strategic planning and technology. Education: Bachelor’s degree in economics from the Wharton School of the University of Pennsylvania.

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Claudio N. Muruzabal

Age: 61
Director Since: 2021

Committees: Human Resources and Nominating and Governance

Mr. Muruzabal is President of SAP, Cloud Success Services. With over 25 years of experience heading large technology organizations, he joined SAP in August 2015 and was previously President of SAP EMEA South and Chairman of SAP Latin America & Caribbean. Prior to this date he was CEO of NEORIS for ten years and evolved the Latin American born company into a global management and IT consulting business. Previously, he was Vice President of Teradata Corporation in Latin America and the Caribbean and worked at NCR Corporation for over 20 years, where he held various senior executive positions.

A strong advocate of education and an entrepreneurial mindset as a means to advance social wellbeing and economic growth, Muruzabal serves as Americas Co-Chair of nonprofit Junior Achievement. He is also a Board Member of the Council of the Americas, and has been recognized consecutively from 2016-2020 with the HITEC 50 Award, as one of the top 50 most influential and notable Hispanic Professionals in the IT industry. In 2019, he was recognized by the Council of the Americas organization with the “Technology Leader of the Year” Bravo Award.

Skills and Qualifications: Mr. Muruzabal has executive level experience in accounting & finance, retail consumer, executive compensation, human resources and talent management, international, marketing, mergers & acquisitions, product development, strategic planning, sustainability/ESG and technology.

Education: Bachelor’s degree from the Catholic University of Argentina with double major in Business Administration and Accounting, and Global Executive M.B.A. from The Fuqua School of Business at Duke University.

Continuing Class II Directors with Terms Expiring in 2024

Roger C. Hochschild

Age: 57
Director Since: 2015

Committees: Finance and Nominating and Governance (Chair)

Public Directorships: Discover Financial Services

Mr. Hochschild has been Chief Executive Officer and President of Discover Financial Services since October 1, 2018. Prior to that, he was President and Chief Operating Officer of Discover Financial Services since 2004. He served as the Chief Administrative Officer, Executive Vice President and Chief Strategy Officer of Morgan Stanley from 2001 to 2004, Chief Marketing Officer of Discover Financial Services from 1998 to 2001 and a Senior Executive Vice President of MBNA America Bank from 1994 to 1998. He has been a Director for Chicago Public Media since October of 2016.

Skills and Qualifications: Mr. Hochschild has executive level experience in asset and investment management, retail consumer services, executive compensation, financial services, human resources and talent management, marketing, mergers & acquisitions, product development, risk management, strategic planning. and Sustainability/ESG.

Education: Bachelor’s degree in economics from Georgetown University, and an M.B.A. from the Amos Tuck School at Dartmouth College.

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	Daniel J. Houston Age: 60 Director Since: 2014			Committees: Executive (Chair) Mr. Houston has been Chairman, President and Chief Executive Officer of the Company and Principal Life Insurance Company (“Principal Life”) since 2016. Prior to that, he was President and Chief Executive Officer from August 2015—May 2016. He served as President and Chief Operating Officer from November 25, 2014—August 17, 2015. He joined Principal Life in 1984 and had several management positions, being named Senior Vice President in 2006 and President of Retirement and Income Solutions in 2008. He is past Chairman of the board of directors of the American Council of Life Insurers and also serves on the boards of the Iowa Business Council, Greater Des Moines Partnership, Employee Benefits Research Institute, Iowa State University Business School Dean’s Advisory Council, Partnership for a Healthier America and Community Foundation of Greater Des Moines. Skills and Qualifications: Mr. Houston has operational expertise, global awareness, and deep talent leadership skills. During his career with the Company, he has worked in sales, managed numerous businesses, and helped lead the transformation of the Company to a global investment management leader. He has extensive operational experience, as well as expertise in risk management, executive compensation, talent management, marketing and sales, and mergers and acquisitions. Education: Bachelor of Science degree from Iowa State University.
	Diane C. Nordin Age: 63 Director Since: 2017			Committees: Audit and Finance Public Directorships: Fannie Mae (Vice Chair of the Board, member Audit, Risk Policy and Executive Committees, Chair of the Compensation Committee) Ms. Nordin was a partner of Wellington Management Company, LLP, a private asset management company, from December 1995 to December 2011, having originally joined Wellington in 1991. Throughout her tenure, Ms. Nordin’s responsibilities spanned product management, client relationship management and ultimately the oversight of Wellington’s Fixed Income group where she was responsible for approximately 20 investment approaches and 130 investors globally. During her time at Wellington, Ms. Nordin served as Vice Chair of the Compensation Committee and Audit Chair of the Wellington Management Trust Company in addition to other committee service throughout her tenure. Prior to joining Wellington, she worked at Fidelity Investments and Putnam Advisory. Ms. Nordin is a Director of Fannie Mae (since 2013) where she serves as Vice Chair of the Board, member of the Executive, Audit and Risk Policy Committees and chairs the Compensation Committee. Also, she is a director of Antares Capital, where she is Chair of the Compensation Committee (since 2016). She is a governor of the CFA Institute (since 2016) where she is past Chair of the Board of Governors as well as the Audit, Risk and Nominations Committee and currently serves as a member of the Risk, Executive and People and Culture Committees and as Chair of the Governance Committee. Ms. Nordin is an Emeritus Trustee of Wheaton College (2010-present) where she chaired the Investment Committee and served on the Audit Committee and was appointed Trustee of Financial Analysts Foundation (2022). She formerly served as a Board member, Executive and Compensation Committee member and Investment Committee Chair of the Appalachian Mountain Club, the oldest conservation organization in the United States. Ms. Nordin also serves on the NY State Common Fund Investment Advisory Committee in a pro bono capacity. Skills and Qualifications: In addition to her extensive experience in the asset management business, Ms. Nordin has executive level experience in accounting and finance, asset and investment management, executive compensation, financial services, human resources and talent management, international operations, marketing, product development, risk management and strategic planning. Education: Bachelor’s degree from Wheaton College (MA). Ms. Nordin is a Chartered Financial Analyst.

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Alfredo Rivera

Age: 61
Director Since: 2020

Committees: Audit and Human Resources

Public Directorships: Coca-Cola HBC AG

Mr. Rivera has been President of the North America Operating Unit of The Coca-Cola Company since 2020. In his role, he helps lead the company’s transformation to emerge stronger as a total beverage company, enabled by a globally-networked organization. Mr. Rivera has been a veteran of the global Coca-Cola system for 35 years and joined The Coca-Cola Company in 1997. Prior to his current role he served as President, Latin America from 2016-2020, President, Latin Center Business Unit from 2013-2016, Vice President of Operations Mexico from 2006-2012 and prior to 2006 held other global positions with Coca-Cola.

Skills and Qualifications: Mr. Rivera has executive level experience in accounting and finance, retail consumer, executive compensation, human resources and talent management, international, marketing, strategic planning, sustainability/ESG, and technology.

Education: Bachelor’s degree and M.B.A. from the University of Southern Mississippi and completed the Advanced Management Program at Harvard Business School.

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Corporate Governance

The Company’s Board and management regularly review best practices for corporate governance and modify our policies and practices as warranted. Our current best practices include:

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Proxy access for shareholders owning three percent or more of the Company’s Common Stock for a minimum of three years;

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Super-majority of independent Directors (12 out of 13);

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All key committees (i.e., Audit, Finance, Human Resources and Nominating and Governance Committees) are composed entirely of independent Directors;

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Strong independent Lead Director;

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Director resignation policy if the support of a majority vote of shareholders is not achieved;

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Policy regarding Directors’ service on other public company boards;

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Board and committee self-assessments conducted annually;

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Director evaluations conducted no less frequently than in connection with Director nomination process;

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Robust stock ownership guidelines for Directors;

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Board Diversity Policy and a diverse and inclusive Board membership in terms of age, background, experience, gender, ethnicity and tenure;

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Robust shareholder engagement program to obtain valuable feedback on our compensation and governance programs;

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Annual review of CEO succession plan by the independent Directors with and without the CEO present;

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Annual Board review of senior management long-term and emergency succession plans;

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Multiple executive sessions involving solely independent Directors (“Executive Sessions”) at each regularly scheduled Board meeting; and

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Robust policies and procedures concerning the identification of and monitoring for conflicts of interest across the organization.

Board Leadership Structure

The Board exercises flexibility in establishing a leadership structure that works best for Principal at any given time. Historically, the positions of Chairman of the Board and CEO have been held by two people or combined and held by one person, depending on circumstances. Currently, Daniel J. Houston is the Chairman and CEO. Since 1990, the Board has had a Lead Director because it believes that it is important that the independent Directors have a formally acknowledged leader in addition to the Chairman of the Board who leads the Board generally. The Board regularly reviews the effectiveness of this shared leadership. Whether to separate or combine the Chairman and CEO positions is based on factors such as the tenure and experience of the CEO and the broader economic and operating environment of the Company. Principal has separated the roles of Chairman of the Board and CEO during periods of senior executive management transition, with the prior Chairman retaining that position as the newly appointed CEO assumes new responsibilities. The Board prefers this flexible approach to a requirement that the positions of Chairman and CEO be combined or separate. Mr. Mills, the current Lead Director, was selected by the independent Directors and assumed this role in 2020. The Nominating and Governance Committee reviews the appointment of Lead Director annually.

The Lead Director and the Chairman jointly decide on the Board’s agenda for each regular quarterly meeting, and the Lead Director seeks input on the agenda from the other independent Directors. The Lead Director and Chairman share the duties of presiding at each Board meeting. The Chairman presides when the Board is meeting as a full Board. The Lead Director presides when the Chairman is not present; plans and leads Executive Sessions of independent Directors; leads the Board’s annual self-evaluation; calls special Board meetings if the Chairman is unable to act; and leads the Board’s CEO succession planning discussions. Executive. Sessions generally occur at the start and end of each regularly scheduled Board meeting and were held in conjunction with each regularly scheduled Board meeting during 2021.

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Role of the Board in Risk Oversight

Risk management is an essential component of our culture and business model. Management within our business units and functional areas is primarily responsible for identifying, assessing, monitoring and managing risk exposures. The Company’s Enterprise Risk Management program includes a Chief Risk Officer, whose team operates independently from the business units, and an Enterprise Risk Management Committee, composed of members from the executive management team, that provides enterprise-wide oversight for material risks. The Company also has a robust internal audit and risk consulting function.

The Board oversees management’s execution and performance of its risk management responsibilities. The Board reviews strategic threats, opportunities, and risks Principal and its businesses or functions are managing. This includes oversight of risks such as credit, market, liquidity, product, operational, cybersecurity, reputational and general business risk that are handled directly by the Board or by Board Committees as discussed below:

The Audit Committee: risk and mitigation related to accounting, financial controls, legal, regulatory, ethics, compliance, operations and general business activities. The Audit Committee also oversees the framework and policies with respect to enterprise risk management.

The Finance Committee: risk and mitigation related to liquidity, credit, market, product and pricing activities. The Finance Committee also oversees capital management, capital structure and financing, investment policy, tax planning, and key risks associated with significant financial transactions. The Finance Committee also provides guidance to the Human Resources Committee on the appropriateness of Company financial goals used in annual and long-term employee incentive compensation arrangements.

The Human Resources Committee: risk and mitigation related to the design and operation of employee compensation arrangements to confirm they are consistent with business plans, do not encourage inappropriate risk taking and are appropriately designed to limit or mitigate risk. The Human Resources Committee annually reviews an analysis of the Company’s incentive compensation plans to ensure they are designed to create and maintain shareholder value, provide rewards based on the long-term performance of the Company and do not encourage excessive risk. The Human Resources Committee also oversees succession planning and development for senior management.

Nominating and Governance Committee: risk and mitigation related to the Company’s environmental, sustainability and corporate social responsibilities as well as the Company’s political contribution activities. The Nominating and Governance Committee also monitors whether the Board and its committees have the collective skills and experience necessary to monitor the risks facing Principal.

The Chief Risk Officer and other members of senior management provide reports and have discussions with the Board and its committees on our risk profile and risk management activities, including reviews of ongoing adherence to policy, impacts of external events, and how strategy, initiatives, and operations integrate with our risk objectives. The Board also receives input on these issues from external entities such as our independent auditor, regulators and consultants. These activities provide the Board with a greater understanding of the material risks we face, the level of risk in matters presented for Board approval, and how risks are related.

The Board views cybersecurity risk in the context of the overall management of risk for our global enterprise, involving people, processes, and technology. As a financial services company, the Board understands the persistent and dynamic nature of cyber threats and the importance of remaining prepared to defend against and respond to these threats. It is treated as a Board level matter, and the Board receives regular reports from the Chief Information Officer, the Chief Information Security Officer, and other professionals to ensure management has established and is proactively maintaining an enterprise-wide cyber risk program with necessary policies, practices and controls to manage the risk and ensure resiliency.

Succession Planning and Talent Development

The Board believes that succession planning for future leadership of the Company is one of its most important roles. The Board is actively engaged and involved in talent management and reviews succession at least annually. This includes a detailed discussion of our global leadership and succession plans with a focus on CEO succession planning as well as succession planning for all key executive positions.

In addition, the Human Resources Committee regularly discusses the talent pipeline for critical roles at a variety of organizational levels, including CEO. A comprehensive review of executive talent, including assessments by an independent consulting firm, determines participants’ readiness to take on additional leadership roles and identifies the developmental and coaching opportunities needed to prepare them for greater responsibilities. High potential leaders are given exposure and visibility to Board members through formal presentations and informal events and

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the Human Resources Committee also receives regular updates on key talent indicators for the overall workforce, including diversity, recruiting and development programs. In addition, the Company has an emergency succession plan for the CEO that is reviewed by the Board annually.

Majority Voting

In uncontested Director elections, Directors are elected by the majority of votes cast. If an incumbent Director is not elected and no successor is elected, the Director must submit a resignation to the Board, which will decide whether to accept the resignation. The Board’s decision and reasons for its decision will be publicly disclosed within 90 days of certification of the election results.

Director Independence

The Board determines at a Director’s initial appointment, and thereafter at least annually, whether each Director is independent, using its independence standards in these determinations. These independence standards include the Nasdaq standards for independence and are on the Company’s website, www.principal.com. The Board considers all commercial, banking, consulting, legal, accounting, charitable, family and other relationships (either individually or as a partner, shareholder or officer of an organization) a Director (or Director candidate) may have with the Company and its subsidiaries. The Board most recently made these determinations for each Director in February 2022, based on:

•

A review of relationships and transactions between Directors, their immediate family members and other organizations with which a Director is affiliated and the Company, its subsidiaries or executive officers;

•

Questionnaires completed by each Director regarding any relationships or transactions that could affect the Director’s independence;

•

The Company’s review of its purchasing, investment, charitable giving and other records; and

•

Recommendations of the Nominating and Governance Committee.

The Board affirmatively determined that the following Directors have no material relationship with the Company and are independent: Mr. Auerbach, Ms. Beams, Ms. Carter-Miller, Mr. Dan, Ms. Helton, Mr. Hochschild, Mr. Mills, Mr. Muruzabal, Ms. Nordin, Mr. Pickerell, Ms. Richer, and Mr. Rivera. The Board also determined that all current members of the Audit, Finance, Human Resources and Nominating and Governance Committees are independent. No Director other than Mr. Houston has been employed by the Company at any time.

Some Directors have categorically immaterial relationships and transactions with Principal:

•

Ms. Helton, Mr. Pickerell, and Mr. Rivera are customers of the Company’s subsidiaries.

•

Ms. Nordin and Mr. Pickerell are directors, and Messrs. Auerbach, Hochschild, Mills and Rivera are executives of for-profit entities with which the Company’s subsidiaries conduct ordinary commercial transactions.

Certain Relationships and Related Party Transactions

As of December 31, 2021, the Vanguard Group, Inc. managed funds holding in the aggregate approximately 10.89% of the Common Stock. For 2021, investment companies sponsored by Principal paid the Vanguard Group $93,352 and paid Vanguard Brokerage Services $15,474, in each case for sub-transfer agent services. During 2021, Vanguard paid $504,692 in rent for lease of space to a borrower of the Principal Life general account. Vanguard provides mutual fund distribution services pursuant to a contract with Principal Funds Distributors, Inc. (“PFD”), for which PFD paid Vanguard $11,038 in 2021. Principal Life accounts held approximately $62,434,750 in privately-placed debt issued by Vanguard. These holdings carry interest rates varying from 1.94% to 3.13% and paid Principal Life 1,625,433 during 2021.

As of December 31, 2021, BlackRock, Inc. (together with its affiliates “BlackRock”) and certain subsidiaries collectively owned or managed funds holding in the aggregate approximately 8.5% of the Common Stock. During 2021, Principal Global Investors, LLC paid BlackRock Fund Advisors $1,555,029 in management fees associated with the Principal Funds, Inc. In 2021, Principal affiliates paid BlackRock $4,212,776 for fees in connection with the use of, and services and consulting furnished in connection with, the Aladdin system. Principal Life and affiliates hold, or manage accounts holding, securities issued by BlackRock, Inc. BlackRock affiliates manage investment funds in which affiliates of the Company invest for their own or managed accounts.

As of December 31, 2021, Nippon Life Insurance Company (“Nippon Life”) held approximately 6.9% of the Common Stock. Nippon Life is the parent company of Nippon Life Insurance Company of America (“NLICA”). Nippon Life,

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NLICA and Principal Life have had business relationships for more than 20 years. In 2021, Nippon Life and NLICA paid the following amounts to Principal Life or its affiliates: $287,897 for pension services for defined contribution plans maintained by NLICA and an affiliate (mostly paid by plan participants), $4,520 for deferred compensation plan services, and $8,549,828 for investment services. The Company owns 1,096 shares of the common stock of NLICA and Principal received $391,119 in dividends from such stock in 2021. Principal Life general and separate accounts hold privately-placed bonds issued by Nippon Life with a market value at the end of 2021 of $79,375,468, and $7,565,600, respectively. The general account holdings carry interest rates varying from 2.065% to 5.1% and paid Principal Life $3,520,000.00 in interest in 2021. The separate account holdings carry an interest rate of 2.75% and paid Principal Life $109,725 in interest in 2021. Nippon Life Americas, Inc. (formerly known as NLI US Investments, Inc. (“NLAI”)), owns approximately 19.02% of Post Advisory Group, LLC (“Post”), an affiliate of the Company. During 2021, Post paid NLAI an aggregate of $4,206,678 in dividends. A Principal affiliate in Japan paid Nippon Life $3,308 for administration of its defined contribution plan. Principal affiliates hold, and manage accounts holding, securities issued by Nippon Life, and Nippon Life invests in funds managed by Principal affiliates.

As of December 31, 2021, Capital Research Global Investors owned or managed funds holding approximately 5.7% of the Common Stock. There were no relationships or related party transactions to report in 2021.

As of December 31, 2021, State Street Corporation (“State Street”) owned or managed funds holding approximately 5.11% of the Common Stock. During 2021, Principal Life was a mortgage lender on a loan to a State Street affiliate which mortgage loan was paid in full during the year ($4,490,273 in principal and $190,175 in interest). Principal Life and affiliates hold, or manage accounts holding, securities issued by BlackRock, Inc. BlackRock affiliates manage investment funds in which affiliates of the Company invest for their own or managed accounts.

Dwight Soethout, Vice President-Chief Actuary, is the spouse of Deanna D. Strable-Soethout, Executive Vice President and Chief Financial Officer. Mr. Soethout has been an employee of the Company since 1993. In 2021, he received $744,978 in base salary, annual bonus and long-term incentive compensation from Principal Life. His compensation is commensurate with that of his peers. His employment and compensation were approved by the Human Resources Committee.

The Company maintains robust policies and procedures for the identification and monitoring of arrangements with related parties. The Nominating and Governance Committee or its Chair must approve or ratify all transactions with related parties that are not preapproved by or exempted from the Company’s Related Party Transaction Policy (the “Policy”). At each quarterly meeting, the Committee reviews transactions with related parties and ratifies any transaction that is subject to the Policy if it determines it is appropriate and may attach conditions to that approval. Transactions involving employment of a relative of an executive officer or Director must be approved by the Human Resources Committee. The Company’s Related Party Transaction Policy is publicly available at www.principal.com.

Board Meetings

The Board held 21 meetings in 2021, five of which were two-day, in person or virtual meetings. No Director then in office attended less than 75% of the aggregate of the meetings of the Board and the committees of which the Director was a member. While Director attendance is not mandatory, the Company’s annual shareholder meeting is scheduled on a date that coincides with a regularly-scheduled quarterly Board Meeting. In 2021, all Directors then on the Board attended the annual shareholders meeting virtually.

Global Corporate Code of Conduct

Each Director and officer of the Company has certified they comply with Principal’s Global Code of Conduct, the foundation for ethical behavior across the organization. The Code is publicly available at investors.principal.com/investor-relations/our-business/corporate-governance/default.aspx.

Board Committees

Only independent Directors may serve on the Audit, Human Resources and Nominating and Governance Committees, and while not required by its charter, the Board’s Finance Committee currently is composed of only independent Directors. The Committees review their charters and performance annually. Committee charters of the Audit, Finance, Human Resources and Nominating and Governance Committees are publicly available on the Company’s website, www.principal.com.

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Membership and responsibilities of each of the Board Committees:

Committee	Responsibilities	Members (*Committee Chair)	Meetings held in 2021
Audit	• Appointing, terminating, compensating and overseeing the Company’s independent auditor and selecting the lead audit partner; • Reviewing and reporting to the Board on the independent auditor’s activities; • Approving all audit engagement fees and preapproving compensation of the independent auditor for non-audit engagements, consistent with the Company’s Auditor Independence Policy; • Reviewing internal audit plans and results; • Reviewing and reporting to the Board on accounting policies and legal and regulatory compliance; • Reviewing the Company’s policies on risk assessment and management; and • All members of the Audit Committee are financially literate and are independent, as defined in the Nasdaq listing standards, and are financial experts, as defined by the Sarbanes-Oxley Act.	Sandra L. Helton* Mary E. Beams Scott M. Mills Diane C. Nordin Clare S. Richer Alfredo Rivera	8
Human Resources	• Evaluating the performance of the CEO and determining his compensation relative to his goals and objectives; • Approving compensation for all other officers of the Company and Principal Life at the level of Senior Vice President and above (“Executives”); • Approving employment, severance or change of control agreements and perquisites for Executives; • Overseeing Executive development and succession planning; • Overseeing our global inclusion strategy; • Approving employee compensation policies for all other employees; • Approving equity awards; • Administering the Company’s incentive and other compensation plans that include Executives; • Acting on management’s recommendations for broad-based employee pension and welfare benefit plans; and • Reviewing compensation programs to confirm that they encourage management to take appropriate risks; discourage inappropriate risks and act consistently with the Company’s business plan, policies and risk tolerance.	Jocelyn Carter-Miller* Michael T. Dan Scott M. Mills Claudio N. Muruzabal Alfredo Rivera	6
Nominating and Governance	• Recommends Board candidates, Board committee assignments and service as Lead Director; • Reviews and reports to the Board on Director independence, performance of individual Directors, process for the annual self-evaluations of the Board and its performance and committee self-evaluations, content of the Global Code of Conduct, Director compensation, and the Corporate Governance Guidelines; and • Reviews environmental and corporate social responsibility matters as well as the Company’s political contribution activities.	Jonathan S. Auerbach Jocelyn Carter-Miller Michael T. Dan Roger C. Hochschild* Claudio N. Muruzabal Blair C. Pickerell	8

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Committee	Responsibilities	Members (*Committee Chair)	Meetings held in 2021
Finance	• Assists the Board with financial, investment and capital management policies; • Reviews capital structure and plans, significant financial transactions, financial policies, credit ratings, matters of corporate finance, including issuance of debt and equity, shareholder dividends, proposed mergers, acquisitions and divestitures; Reviews and provides guidance on financial goals; • Oversees investment policies, strategies and programs; and • Reviews policies and procedures governing the use of financial instruments including derivatives; and assists the Board in overseeing and reviewing information regarding enterprise financial risk management, including the policies, procedures and practices to manage liquidity, credit market, product and pricing risks, and tax planning.	Jonathan S. Auerbach Mary E. Beams Sandra L. Helton Roger C. Hochschild Diane C. Nordin Blair C. Pickerell Clare S. Richer*	22
Executive	• Acts on matters delegated by the Board which must be approved by its independent members. Has the authority of the Board between Board meetings unless the Board has directed otherwise or as mandated by law and in the By Laws.	Jocelyn Carter-Miller Sandra L. Helton Daniel J. Houston* Scott M. Mills	None

ESG at Principal

Principal aims to foster a world in which financial security is accessible to all. To fulfill this commitment, our ESG (Environmental, Social, Governance) approach harnesses the power of our people and our products while creating sustainable practices. We measure our continued progress by focusing on the following material ESG impacts: employee engagement, financial inclusion, governance, ethics and risk, environmental impact, sustainable sourcing, consumer product impact and responsible investing, through which we aim to create a more diverse, equitable, and inclusive world. In 2021, we joined the United Nations Global Compact, the world’s largest corporate sustainability initiative, at the Participant level to publicly demonstrate our commitment to human rights, fair labor practices, environmental impact, and anti-corruption. We also joined the UN Global Compact CFO Task Force in recognition of our ongoing commitment to balancing our business objectives with responsible business practices.

A full review of Principal’s environmental, social and governance (“ESG”) practices can be found on www.principal.com/sustainability. We plan to share progress on our ESG initiatives and outcomes in our 2021 Sustainability Report, which will be released in May 2022.

While maintaining strong corporate governance, our ESG strategy is informed by sustainability factors that are important to our stakeholders and that contribute to a positive social and environmental impact. We have gathered feedback from clients, institutional customers, employees, and investors to understand their priorities and performance expectations for ESG material topics. Based on this process and our findings, a summary of our ESG strategy and outcomes is below.

Employee Engagement

We’re committed to nurturing an inclusive culture and diverse workforce based on the highest ethical standards and a dedication to fairness, respect, integrity, and trust, across and throughout all levels of the organization.

•

In 2021, we maintained a strong level of employee satisfaction with a 79% Employee Engagement Index and captured workplace belonging with an Inclusion Index score of 79%.

•

Principal currently manages 10 Employee Resource Groups (“ERGs”) connecting 3,725 employees based on similar interests or aspects of diversity, including disabilities, gender, military experience, race, sexual orientation, and sustainability.

•

Principal was named a member of the 2022 Bloomberg Gender-Equality Index, which emphasizes gender pay equity, strong diversity metrics and talent management.

•

For the 7th straight year, we received a score of 100/100 on the Corporate Equality Index, naming us one of the “Best Places to Work for LGBTQ Equality.”

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Financial Inclusion

We exist to enable financial security and work to reach more people every day.

•

Annually, Principal Foundation contributes more than $30 million through grants, employee and match giving, sponsorships, pro bono, and in-kind donations.

•

We launched our first Sustainability Bond in August 2021 that highlights financial inclusion among our eligible assets, as seen in our Sustainable Financing Framework.

•

Together with Kiva, Principal Foundation is providing micro loans to 31,554 female entrepreneurs in 35 countries, increasing access to capital.

•

Principal Foundation is funding financial coaching for diverse entrepreneurs in five cities across the U.S. through a grant to Cities for Financial Empowerment.

Governance, Ethics & Risk

The Nominating and Governance Committee monitors risks and mitigation related to our environmental, sustainability, and corporate governance responsibilities, as well as our political contribution activities. The committee also monitors whether the Board and its committees have the collective skills and experience necessary to monitor the risks facing Principal.

•

Over 95% of employees were trained on our global code of conduct, cybersecurity, and data privacy policies
in 2021.

Diversity of the Board is a longstanding and valued objective, as reflected in the Board’s Diversity Policy. Therefore, in addition to other considerations, the Nominating and Governance Committee reviews the Board’s diversity, including in terms of background, experience, expertise, gender, generation, national origin, and race, when recruiting new Directors. The current Board reflects these values, for example, in the composition of our independent members on the Board of Directors, as of December 31, 2021 (see pages 5-6 for additional detail).

•

Independent members currently represent 92% of our Board of Directors (12 out of 13 members).

•

67% of our independent members are either women or people of color (8 out of 12).

Environmental Impact

We recognize that our vision of a more secure world is intertwined with the health and wellbeing of the planet. As such, we continue to be mindful of our operating realities and how our daily functions contribute to our impact on the environment. To combat the climate crisis, we remain dedicated to taking actions to mitigate our climate impact.

•

We reduced our U.S. greenhouse gas (GHG) emissions by 48% between 2010 and 2019.

•

Principal Real Estate Investors received a 4-star rating from GRESB, the global ESG benchmark for real estate for the 6th consecutive year.

•

Principal was named in the top 10 of the Barron’s 100 Most Sustainable Companies in 2021, ranking in 7th place.

Sustainable Sourcing

Including qualified diverse businesses in our procurement process is an important aspect of our commitment to diversity. We are very committed to achieving year over year improvement in our diversity inclusion and spend metrics.

•

We consistently award 7-10% of our eligible spend base to diverse suppliers.

•

We are an active member of the Financial Services Roundtable for Supplier Diversity, a group dedicated to building strong supplier diversity practices in the financial services industry.

•

We partnered with four D&I firms as active co-managers in our recent debt issuance as part of our initiative to work with more diverse third parties within capital markets.

Consumer & Product Impact

Over the next 5 years, we will double the number of small- to mid-sized businesses we support which are owned by women and people of color through product access, micro-finance, community development, and financial education.

•

In fall 2021, we launched Spanish-language capabilities in the Principal® App, providing equitable access to retirement plan information for a growing U.S. population.

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•

Focusing on digital channel access, micro-finance, and financial education, we expanded financial wellness to a broader audience in 2021.

Responsible Investing

At Principal Global Investors, our commitment to responsible investing and ESG issues revolves around a key factor—our fiduciary responsibility to our clients. Acting in their best interests comes first and foremost. Our approach to responsible investing is driven by that priority.

•

Principal Global Investors (“PGI”) integrates ESG investing principles into its approach to portfolio management across all actively managed asset classes.

•

PGI’s signatory status to the United Nations sponsored Principles for Responsible Investing gives us a voice in defining and shaping the ongoing global ESG discussion.

•

Local country investment teams of Principal Asset Management in Malaysia and CUPRUM in Chile have also become signatories to the UN PRI, further shaping our global ESG voice.

•

We manage over $11.3 billion of client directed socially responsible assets.

Looking Forward

For decades, we’ve embraced ESG as a core strategy to strengthen our business, advance our mission, and build a more inclusive, resilient and sustainable global community. As we continue to embed sustainability into our business, we have solidified our strategic pillars and have developed public commitments to measure our progress toward long-term responsible actions. Visit www.principal.com/sustainability to learn more about our public commitments.

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Directors’ Compensation

Directors serve on the Boards of the Company, Principal Life and Principal Financial Services, Inc. Any Director who is also an employee does not receive any compensation for his or her service as a Director. The Company provides competitive compensation to attract and retain high quality non-employee Directors. A substantial proportion of non-employee Director compensation is provided in the form of equity to help align such Directors’ interests with the interests of shareholders.

The non-employee Director compensation program is reviewed annually. The Nominating and Governance Committee uses the Board’s independent compensation consultant for this purpose. During 2021, Compensation Advisory Partners conducted an annual comprehensive review and assessment of Director compensation. The Company targets non-employee Director compensation at approximately the median of the peer group used for Executive compensation comparisons (“Peer Group”) (see page 34), which aligns with its Executive compensation philosophy. As a result of Compensation Advisor Partners’ November 2021 review and the Committee’s discussion, Directors’ annual cash retainer was increased from $110,000 to $115,000 and their annual Restricted Stock Unit (“RSU”) retainer increased from $165,000 to $170,000. These changes position Directors at the median of compensation within Principal’s Peer Group.

	Annual Cash Retainers(1) (Effective November 21, 2021)
Board		$	115,000
Audit Committee Chair		$	35,000
Human Resources Committee Chair		$	25,000
Finance Committee Chair		$	25,000
Nominating & Governance Committee Chair		$	25,000
Other Committee Chairs		$	10,000
Lead Director		$	50,000
Annual Restricted Stock Unit Retainer(2)		$	170,000

(1)

Paid in two semiannual payments, in May and November, on a forward-looking basis.

(2)

Grants are made at the time of the annual meeting.

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Fees Earned by Non-Employee Directors in 2021

Name	Fees Earned or Paid in Cash			Stock Awards(1)			Total
Jonathan S. Auerbach		$	112,500		$	164,988		$	277,488
Mary E. Beams(2)		$	138,900		$	203,013		$	341,913
Jocelyn Carter-Miller		$	137,500		$	164,988		$	302,488
Michael T. Dan		$	112,500		$	164,988		$	277,488
Sandra L. Helton		$	147,500		$	164,988		$	312,488
Roger C. Hochschild		$	137,500		$	164,988		$	302,488
Scott M. Mills		$	162,500		$	164,988		$	327,488
Claudio Muruzabel(3)		$	99,696		$	144,998		$	244,694
Diane C. Nordin		$	112,500		$	164,988		$	277,488
Blair C. Pickerell		$	112,500		$	164,988		$	277,488
Clare S. Richer		$	143,500		$	164,988		$	308,488
Alfredo Rivera		$	112,500		$	164,988		$	277,488
Elizabeth E. Tallett(4)		$	0		$	0		$	0

(1)

These amounts reflect the grant date fair value of awards made in 2021 determined in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718. These awards do not reflect actual amounts realized or that may be realized by the recipients. While the Principal Financial Group, Inc. 2021 Stock Incentive Plan (which was approved by shareholders) allows some discretion in determining the value of RSUs that may be awarded annually, it imposes a maximum limit for stock awards plus fees and retainers of $750,000 ($1,000,000 for an Independent Chairman) on the size of the annual award that may be made.

(2)

Mary E. Beams’ Board service began on February 23, 2021. Ms. Beams received a prorated stock award on March 5, 2021, for the May 2020-May 2021 Board year.

(3)

Claudio Muruzabel’s Board service began on July 1, 2021. Mr. Muruzabel received a prorated stock award on July 1, 2021 for the May 2021-May 2022 Board year.

(4)

Elizabeth E. Tallett retired from Board service in May 2021.

Non-Employee Directors’ Deferred Compensation Plan

Non-employee Directors may defer the receipt of their cash compensation under the Deferred Compensation Plan for Non-Employee Directors of Principal Financial Group, Inc. This Plan has four investment options, and each option represents “phantom” units tied to the funds listed in the table below (parenthesized information indicates share class):

Investment Option	1 Year Rate of Return (12/31/2021)
Principal Financial Group, Inc. Employer Stock Fund		50.72%
Principal LargeCap S&P 500 Index Fund (R5)		28.14%
Principal Real Estate Securities Fund (R5)		39.40%
Principal Core Plus Bond Fund (R5)		0.84%

Restricted Stock Unit Grants

Non-employee Directors receive an annual grant of time-based RSUs under the Principal Financial Group, Inc. 2021 Stock Incentive Plan. RSUs are granted at the time of the annual meeting, vest at the next annual meeting, and are deferred at least until the date the Director leaves the Board. At payout, the RSUs are converted to shares of Common Stock. Dividend equivalents become additional RSUs, which vest and are converted to Common Stock at the same time and to the same extent as the underlying RSU. The Nominating and Governance Committee has the discretion to make a prorated grant of RSUs to Directors who join the Board at a time other than at the annual meeting. The 2021 Stock Incentive Plan (which was approved by shareholders) imposes a combined maximum limit for stock awards plus fees and retainers of $750,000 ($1,000,000 for an Independent Chairman).

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As of December 31, 2021, each non-employee Director who served during 2021 had the following aggregate number of outstanding RSUs, including additional RSUs received as the result of dividend equivalents.

Director Name	Total RSUs Outstanding Fiscal Year End 2021 (Shares)
Jonathan S. Auerbach		7,202
Mary E. Beams		667
Jocelyn Carter-Miller		64,071
Michael T. Dan		35,063
Sandra L. Helton		61,572
Roger C. Hochschild		21,615
Scott M. Mills		17,053
Claudio Muruzabel		0
Diane C. Nordin		12,968
Blair C. Pickerell		20,203
Clare S. Richer		4,469
Alfredo Rivera		1,593
Elizabeth E. Tallett		0

Other Compensation

Principal Life matches charitable gifts up to $16,000 per non-employee Director per year. These matching contributions are available during a Director’s term and for three years thereafter. Principal Life receives the charitable contribution tax deductions for the matching gifts.

Directors are reimbursed for travel and other business expenses they incur while performing services for the Company and are allowed the use of corporate owned or leased aircraft when traveling to in-person meetings of the Board and its Committees. When Directors’ spouses/partners accompany them to the annual Board strategic retreat, Principal pays for some of the travel expenses and amenities for Directors and their spouses/partners, such as meals and social events. Directors are also covered under the Company’s Business Travel Accident Insurance Policy and Directors’ and Officers’ insurance coverage. The Human Resources Committee approved Directors’ participation in Principal Global Asset Management investment products on a reduced or no fee basis. In 2021 the total amount of perquisites provided to non-employee Directors was less than $10,000 per Director.

Directors’ Stock Ownership Guidelines

To encourage Directors to accumulate a meaningful ownership level in the Company, the Board has had a “hold until retirement” stock ownership requirement since 2005. All RSU grants must be held while a Director is on the Board and may only be converted to Common Stock when the Director’s Board service ends. The Board has a guideline that Directors own interests in Common Stock equal to five times the annual Board cash retainer within five years of joining the Board. Directors have been able to achieve this level of ownership through the RSU hold until retirement requirement. Once this guideline is met, Directors do not need to buy additional stock if the guideline is no longer met due to a reduction in stock price, if the Director’s ownership level is not reduced because of share sales.

Audit Committee Report

The Audit Committee oversees the Company’s financial reporting process. Company management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. The Committee reviewed with management the audited financial statements for the fiscal year ended December 31, 2021, and discussed the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.

The Committee discussed with Ernst & Young LLP, the Company’s independent auditor, the matters required to be discussed by the applicable Public Company Accounting Oversight Board (“PCAOB”) standards. These standards require the independent auditor to communicate (i) the auditor’s responsibility under standards of the PCAOB; (ii) an overview of the planned scope and timing of the audit; and (iii) significant findings from the audit, including the qualitative aspects of the entity’s significant accounting practices, significant difficulties, if any, encountered in

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performing the audit, uncorrected misstatements identified during the audit, other than those the auditor believes are trivial, if any, any disagreements with management, and any other issues arising from the audit that are significant or relevant to those charged with governance.

The Committee discussed with Ernst & Young LLP the critical audit matters included in its audit report. These are audit matters relating to accounts or disclosures that are material to the financial statements and involved especially challenging, subjective or comply auditor judgment.

The Committee received from Ernst & Young LLP, the written disclosures and letter required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the Committee concerning independence. The Committee has discussed with Ernst & Young LLP its independence and Ernst & Young LLP has confirmed in its letter that, in its professional judgment, it is independent of the Company within the meaning of the federal securities laws.

The Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board (and the Board approved) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the Securities and Exchange Commission (SEC). The Committee has also approved, subject to shareholder ratification, the appointment of Ernst & Young LLP as the Company’s independent auditors for the fiscal year ending December 31, 2022.

In determining whether to reappoint Ernst & Young LLP as the Company’s independent auditor, the Audit Committee annually conducts a formal evaluation that takes into consideration a variety of factors, including the firm’s tenure; the firm’s independence, and its processes and controls for maintaining that independence; the firm’s local, national, and global presence; the quality, consistency, effectiveness, and timeliness of the firm’s communications with the Audit Committee and business areas; management’s evaluation of the firm; data related to audit quality and performance, including recent PCAOB inspection reports; and the appropriateness of the firm’s fees.

In accordance with SEC rules, the lead or concurring audit partner for the Company may not serve in that role for more than five consecutive fiscal years. The Audit Committee ensures the regular rotation of the audit engagement team partners as required by law.

The Committee does not have the responsibility to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles. That is the responsibility of the Company’s independent auditor and management. In giving our recommendation to the Board, the Committee has relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with generally accepted accounting principles, and (ii) the report of the Company’s independent auditor with respect to such financial statements.

Sandra L. Helton, Chair
Mary E. Beams
Scott M. Mills
Diane C. Nordin
Clare S. Richer
Alfredo Rivera

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Executive Compensation

Contents:	Page
Compensation Discussion & Analysis (“CD&A”)		27
• 2021 Company Performance Highlights		28
• 2021 Compensation Highlights		29
• Highlights of 2022 Compensation Programming Changes		29
• Compensation Program Philosophy and Policies		30
• Summary of Compensation Elements		31
• How We Make Compensation Decisions		33
• 2021 Executive Compensation Decisions		35
• Base Salary		36
• Annual Incentive Compensation		36
• Long-term Incentive Compensation		39
• Timing of Stock Option Awards and Other Equity Incentives		40
• Benefits		41
• Change of Control and Separation Pay		41
• Stock Ownership Guidelines		42
• Hedging and Pledging Policy		42
• Repricing Policy		42
• Clawback Policy		42
• Gross-Up Policy		43
• Human Resources Committee Report		43
• Risk Assessment of Employee Incentive Plans		43
Compensation Tables
• Summary Compensation Table		44
• Grants of Plan-Based Awards for Fiscal Year End December 31, 2021		46
• Outstanding Equity Awards at Fiscal Year End December 31, 2021		47
• Option Exercises and Stock Vesting		48
• 2021 CEO Pay Ratio		48
• Pension Plan Information		49
• Pension Distributions		51
• Pension Benefits		52
• Non-Qualified Deferred Compensation		53
• Qualified 401(k) Plan and Excess Plan		53
• Severance Plans		54
• Change of Control Employment Agreements		55
• Potential Payments Upon Termination Related to a Change of Control		58

Compensation Discussion and Analysis (CD&A)

The CD&A describes Principal Financial Group, Inc.’s Executive compensation objectives and philosophy. It also describes our 2021 compensation program and reviews the outcomes, including the Company’s financial performance in 2021. Our “Named Executive Officers” in 2021 were:

•

Daniel J. Houston, Chairman, President and Chief Executive Officer. Mr. Houston has overall responsibility for all businesses of the organization. He joined the Company in 1984 and assumed his current position in 2015. He previously served as President and Chief Operating Officer, overseeing all our U.S. and global businesses.

•

Deanna D. Strable-Soethout, Executive Vice President and Chief Financial Officer. Ms. Strable-Soethout plays a central role in driving and managing long-term strategies for innovation-fueled company growth, including responsibility for corporate strategy and capital markets. She joined the Company in 1990 and assumed her current position in 2017. She previously served as Executive Vice President and President of U.S. Insurance Solutions with overall accountability for individual life, non-qualified deferred compensation, individual disability, and group benefits.

•

Patrick G. Halter, Chief Executive Officer, Principal Global Investors. Through November 6, 2020, Mr. Halter had responsibility for overseeing the operations of Principal Global Investors, its 15 investment boutiques, and the

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fund and distribution teams. Effective November 7, 2020, he was promoted to President, Principal Global Asset Management and assumed responsibility for overseeing all of Principal’s asset management capabilities including Principal Global Investors, Principal International investment operations, and the Principal Life Insurance Company General Account. Mr. Halter joined the Company in 1984.

•

Amy C. Friedrich, President, U.S. Insurance Solutions. Ms. Friedrich is President of U.S. Insurance Solutions. Serving nearly 125,000 employers and more than 3.5 million people, she leads 3,100 employees responsible for group employee benefits, life insurance, disability insurance, and nonqualified deferred compensation, along with the distribution arm, which includes Principal’s broker-dealer organization and network of affiliated financial professionals. Ms. Friedrich joined the company in 2000 and assumed her current position in 2017.

•

Renee Schaaf, President, Retirement and Income Solutions. Ms. Schaaf leads the Principal U.S. retirement business, one of the top three providers of retirement solutions in the nation. She joined the company in 1980 and assumed her current position in 2019. She previously served as the Chief Operating Officer for Principal International where she led global business development, strategy and operations in Latin America and Asia. Ms. Schaaf recently announced her plan to retire in May 2022.

2021 Company Performance Highlights:

2021 was transformational for Principal. We successfully completed the integration of the Institutional Retirement & Trust business (IRT), one of the largest acquisitions in company history which solidified Principal as a top 3 retirement provider in the U.S. October 2021 marked the company’s 20th anniversary as a public company, a turning point that launched two decades of exponential customer and assets under management (AUM) growth. And perhaps the most significant milestone—the completion of an intense strategic review of the company’s business mix and capital management approach. Our go-forward strategy is focused on our growth drivers of retirement in the U.S. and emerging markets, global asset management, and U.S. benefits and protection. We’re improving capital efficiency and returning excess capital to shareholders.

In 2021, Principal reported $1.7 billion of net income and $1.8 billion of non-GAAP operating earnings, or $6.77 per diluted share (EPS)—a 37% increase in EPS compared to 2020. This strong operating performance allowed us to return nearly $1.6 billion of capital to shareholders in 2021, including $921 million of share repurchases and $654 million of common stock dividends.

At the end of the year, we reported $714 billion of AUM managed by Principal, a 7% increase from 2020, and over $1.6 trillion of assets under administration (AUA), which includes AUM. Note that we changed our AUM definition at the end of 2021 to exclude assets managed by third parties where the company does not earn a fee for investment management services; under our prior definition, 2021 AUM would have been over $1 trillion compared to $981 billion at the end of the third quarter.

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Our one-year and three-year total shareholder return (TSR) performance was positioned well ahead of our asset management and insurance peers, while our 5-year total shareholder return performance was slightly below.

1, 3 and 5-Year Total Shareholder Return1: PFG vs. Peers

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Insurance Peers include Ameriprise, Lincoln National Corporation, ManuLife, MetLife, Prudential, Sun Life Financial, Unum, and Voya. Equitable Holdings was added to our peer group as part of the 2020 executive compensation review. Their stock has only been trading since May 2018 so they are not included in the 5-year TSR number above.

Asset Manager peers include Affiliated Managers Group, Franklin Resources, Invesco, and T. Rowe Price.

2021 Compensation Highlights

•

In 2021, the Company’s shareholders voted to approve the Company’s Executive compensation program. Of the votes cast, 93.12% supported the Executive compensation program. The Company considered the shareholders’ approval of the compensation program to be approval of the Company’s compensation philosophy, which has not changed since that vote.

•

Mr. Houston’s base salary remained at $1,000,000 in 2021. Additionally, his annual incentive target remained at 375% of his eligible earnings and the grant date fair value of his long-term incentive award was $8,550,000. His Principal Financial Group Incentive Pay Plan (PrinPay Plan) payout for 2021 was $6,075,000.

•

Based on our 2021 annual performance achievements, many of which are outlined above, our 2021 PrinPay score in the annual incentive program was earned at 162% of target and the individual modifiers for our Named Executive Officers ranged between 95% and 120%.

•

Based on the Company’s three-year average return on equity (“ROE”)2 and three-year average book value per share3 performance, the 2019-2021 Performance Based RSUs (“PSUs”) vested on December 31, 2021, and 77% of the target number of shares were paid out in February 2022, according to the established performance scale, and approved by the Human Resources Committee.

•

Our new stock plan (approved by shareholders in May 2021) provides equity governance enhancements including a new minimum one-year vesting requirement on equity awards and a prohibition on share recycling (i.e. shares withheld for tax purposes will not be added back into the share reserve).

Highlights of 2022 Compensation Program Changes

For 2022, the Company made certain enhancements to the long-term incentive (LTI) program for our executive officers based on shareholder input and the company’s future strategy.

•

Eliminated stock options;

•

Increased PSU weighting to 70% of total LTI mix, with remaining 30% granted in time-based restricted stock units (RSUs);

Our total shareholder return methodology includes the share price return and cash dividends paid during the time period December 31, 2020, through December 31, 2021 (1-year TSR), December 31, 2018, through December 31, 2021 (3-year TSR) and December 31, 2016, through December 31, 2021 (5-year TSR).

Return on equity (“ROE”) is defined as non-GAAP operating earnings divided by average stockholders’ equity available to common stockholders excluding accumulated other comprehensive income other than foreign currency translation adjustment. See non-GAAP financial measure reconciliations in Appendix B.

Book value per share is defined as total ending common equity excluding accumulated other comprehensive income divided by the number of common shares outstanding at end of year. This is a non-GAAP financial measure. See non-GAAP financial measure reconciliations in Appendix B.

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•

Changed the ROE definition to reflect the exclusion of the cumulative mark-to-market adjustment on funds withheld embedded derivative on exited businesses through reinsurance;

•

Added a three-year relative total shareholder return (“TSR”) modifier to our PSU awards relative to the constituents of the S&P 500 Financials index; and

•

Eliminated the Book Value modifier previously used for the ROE measure.

Compensation Program Philosophy and Policies

Compensation Philosophy—Our Executive compensation program is designed to align the interests of Executives and shareholders. Our objective is to attract and retain high caliber executive officers to deliver sustained high performance for our customers and shareholders. The philosophy underlying our program is to provide market driven, performance-based total compensation.

Our executive compensation philosophy is based on the principles outlined below:

•

Attract and retain talented Executives and motivate them to perform at the highest level and contribute significantly to the Company’s long-term success.

•

Reinforce the Company’s pay for performance culture by making a significant portion of total compensation variable and by differentiating awards based on Company and individual performance in achieving short and long-term financial and strategic objectives.

•

Have a greater percentage of compensation to be at risk for Executives who bear higher levels of responsibility for the Company’s performance.

•

Align the interests of Executives and other stakeholders, including shareholders, customers and employees, by having a significant portion of the Executives’ compensation in stock and requiring Executives to hold stock.

•

Support important corporate governance principles and established best practices.

Compensation Policies—Principal’s Executive compensation program incorporates the following best practices:

✓

Independent Consultant. Compensation Advisory Partners is selected and retained by the Committee to advise on the Executive compensation program, and also advises the Nominating and Governance Committee on compensation for non-employee Directors.

✓

Risk Review. Reviews and analysis of the Company’s employee incentive compensation plans are conducted on a regular basis to determine whether the plans are reasonably likely to have a material adverse effect on the Company.

✓

Emphasis on Variable Compensation. Most compensation paid to our Named Executive Officers is variable and at risk, linked to meeting our short-term and long-term financial and strategic goals and to the performance of the Company’s stock over time.

✓

Executive Ownership. Executives are required to own a meaningful amount of stock in the Company to ensure their interests are aligned with the shareholders’ interests and with the Company’s long-term performance.

✓

Prohibition on Hedging. Principal prohibits all employees, including Named Executive Officers, from purchasing any Principal securities on margin (except for exercising stock options); engaging in short sales or trading in any put or call options; and purchasing, directly or indirectly, any financial instrument (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that is designed to hedge or offset any decrease in the market value of Principal securities.

✓

Clawback Policy. The Committee has adopted a compensation recovery policy that applies to Executives.

✓

Market Severance Protection. Executives are eligible for market-based severance protection under The Principal Financial Group, Inc. Executive Severance Plan if they are terminated because of layoffs, position elimination or similar reasons.

✓

Limited Perquisites. Modest additional benefits to help attract and retain Executive talent and enable Named Executive Officers to focus on Company business with minimal disruption are offered.

✓

No Repricing of Stock Options. Principal has not repriced underwater stock options and will not do so without shareholder approval.

✓

Tax and Accounting Efficiency. The Committee considers the tax and accounting consequences of each element of compensation.

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✓

No Gross Ups. Executives do not receive any income tax gross-ups, except that all employees, including Executives, receive an income tax gross-up in connection with benefits provided with relocation.

Summary of Compensation Elements:

Compensation
Component

Objective

Description and 2021 Highlights

Base Salary

Provides fixed income based on the size, scope and complexity of the Named Executive Officers’ role, performance and relative position compared to market pay information.

In 2021, the Committee increased Executives’ base salaries, as detailed on page 36.

Annual Incentive Compensation

Motivates and rewards overall corporate objectives as well as the Named Executive Officers’ contribution to achieving our annual objectives.

A range of earnings opportunity, expressed as a percentage of base salary, is established for each Named Executive Officer. Actual bonuses depend on individual employee results and overall Company performance and profitability, as outlined on pages 36-39.

Based on the Committee’s assessment of our 2021 PrinPay score, bonuses were earned at 162% of target and the individual modifiers for our Named Executive Officers ranged between 95% and 120% as detailed on pages 37-38.

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Compensation
Component

Objective

Description and 2021 Highlights

Long-Term
Incentive
Compensation

Motivates and rewards long-term corporate performance as well as the Named Executive Officers’ contribution to achieving our long- term objectives. Reinforces the link between the interests of the Named Executive Officers and shareholders. Encourages retention.

Each year, the Committee establishes the long-term award opportunity for each Named Executive Officer. Through 2021, one half of the award was granted in stock options and the other half in PSUs. Using equal amounts of PSUs and options created a balance between achieving operating performance objectives and increases in shareholder value.

Stock Options were intended to align participants with the company’s long term value appreciation and participants only receive value from this vehicle if there is stock price appreciation between grant date and exercise of the option. Options vest ratably over 3 years with an exercise period of up to 10 years.

PSUs are intended to incentivize participants to deliver on the company’s defined financial goals. The value to participants varies based on the degree of achievement against those goals. PSUs typically have a 3-year performance period and are measured on 50% average ROE and 50% Pre-Tax Return on Net Revenue. The ROE portion of the award is also subject to a Book Value per share threshold. We believe these are important metrics because Pre-tax Return on Net Revenue measures profitability across our businesses and ROE measures our efficiency in managing capital. ROE is also a key measure for our shareholders.

The PSUs granted in 2019 for the 2019-2021 Performance Cycle were based on three-year average ROE and Pre-Tax Return on Net Revenue, each weighted 50%. Payout on the ROE metric is modified based on three-year Book Value per Share vs. certain threshold goals. For the 2019-2021 Performance Cycle, the awards vested and paid out at 77% of the target number of PSUs based on our ROE performance of 12.8%, Pre-Tax Return on Net Revenue of 29.1%, and Book Value per Share of $52.07.

The performance periods for the 2020-2022 and 2021-2023 PSUs were modified from three years to two years due to a change in accounting rules for publicly traded companies with significant life insurance and annuity businesses that was intended to take effect on January 1, 2022, but the implementation was delayed by the Financial Accounting Standards Board (FASB) until 2023. The change may result in significant variability of reported earnings each year for companies with significant life insurance and annuity businesses such as Principal Financial. For the 2020-2022 and 2021-2023 Performance Cycle, PSUs will continue to vest at the end of the three-year cycle.

As stated above, the PSUs granted in 2020 for the 2020-2022 Performance Cycle were based on two-year average ROE and Pre-Tax Return on Net Revenue, each weighted 50%. Payout on the ROE metric is modified based on two-year Book Value per Share vs. certain threshold goals. For the 2020-2022 Performance Cycle, the awards vested at 87% of the target number of PSUs based on our ROE performance of 12.6%, Pre-Tax Return on Net Revenue of 28.7%, and Book Value per Share of $53.70. The PSUs granted in 2020 are subject to an additional year of service-based vesting.

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Compensation
Component

Objective

Description and 2021 Highlights

Commencing in 2022, long-term awards will be granted 70% in PSUs and 30% in time-based RSUs. Details of the program are outlined on pages 39-40.

Benefits

Protects against catastrophic expenses and provides retirement savings opportunities.

Named Executive Officers participate in most of the same benefit plans as the Company’s other U.S.-based employees, including health, life, disability income, vision and dental insurance, an employee stock purchase plan, 401(k) plan and pension plan. Certain of the Named Executive Officers also participate in non-qualified retirement plans (defined benefit and defined contribution). Mr. Halter participated in the pension and non-qualified plans prior to 2010, when changes were made to eliminate these programs for investment professionals.

Perquisites

Modest additional benefits to help attract and retain Executive talent and enable Named Executive Officers to focus on Company business with minimal disruption.

Named Executive Officers are eligible for one physical examination per year, business spousal travel and gifts of nominal value given to all sales conference attendees. The Human Resources Committee approved Named Executive Officers the ability to participate in Principal Global Asset Management investment products on a reduced or no fee basis. The Human Resources Committee also approved our CEO’s use of our corporate aircraft for limited personal travel.

Termination Benefits

Provides temporary income following a Named Executive Officer’s involuntary termination of employment, and, in the case of a change of control, helps ensure the continuity of management through the transition.

Refer to page 41 for a discussion of our change of control and separation benefits. These benefits do not include excise tax gross ups.

How We Make Compensation Decisions

Human Resources Committee Involvement

The Human Resources Committee

•

Oversees the development and administration of the Company’s compensation and benefits policies and programs;

•

Sets and approves CEO goals in conjunction with the Board of Directors;

•

Evaluates CEO performance results;

•

Makes the compensation decisions for the CEO;

•

Approves the compensation program and compensation for Executives;

•

Reviews and approves corporate incentive goals and objectives relevant to compensation; and

•

Evaluates the competitiveness of each Executive’s total compensation.

Compensation Advisory Partners is selected and retained by the Committee to advise on the Executive compensation program. Compensation Advisory Partners also advises the Nominating and Governance Committee on compensation for non-employee Directors (see pages 23-26). Compensation Advisory Partners receives compensation from the Company only for its work in advising these Committees. Compensation Advisory Partners does not and would not be allowed to perform services for management. The Committee assessed the independence factors in applicable SEC rules and Nasdaq Listing Standards and other facts and circumstances and concluded that the services performed by Compensation Advisory Partners did not raise any conflict of interest.

No member of management, including the CEO, has a role in determining his or her own compensation; and the CEO is not present when the Committee discusses his compensation. The Committee consults with the independent

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Directors regarding the CEO’s performance and then determines the compensation earned by the CEO for the current year and the CEO’s compensation opportunity for the following year.

Each year the CEO, with input from the Human Resources Department and the compensation consultant, recommends the amount of base salary increase (if any), annual incentive award and long-term incentive award for Named Executive Officers other than himself. These recommendations are based on the Executive’s performance, performance of the business areas for which the Executive is responsible (if applicable) and other considerations such as retention. The Human Resources Committee reviews these recommendations and approves compensation decisions for Executives.

The role of the Independent Compensation Consultant & Interaction with Management

The Human Resources Committee has the sole authority to hire, approve the compensation of and terminate the engagement of the compensation consultant.

The compensation consultant usually conducts a comprehensive review of the Company’s Executive compensation program every other year. In the years in which the compensation consultant does not conduct a compensation study, the Committee makes compensation decisions, in part, on survey data provided by the Human Resources Department and input provided by the compensation consultant. The last review of executive compensation was conducted in 2021. The study of Executive compensation conducted by the Committee’s compensation consultant reviewed all aspects of the incentive program design and structure of the Company’s total Executive compensation program, and includes:

•

A competitive review of compensation opportunities for each of the Named Executive Officers compared to the pay opportunities of similarly situated executives at the Peer Group companies (see below);

•

An analysis to ensure that total share dilution and the economic costs of long-term incentives are reasonable and affordable for the Company; and

•

A comprehensive market analysis of termination-related benefits related to cash severance and equity termination provisions.

The compensation consultant:

•

Attended six meetings of the Committee in 2021, as requested by the Committee Chair; and

•

Reviewed and commented on drafts of the Compensation Discussion & Analysis and related compensation tables for the proxy statement.

Use of Compensation Data

The Committee determines the Peer Group of companies it uses to compare Executive compensation as part of the compensation consultant’s biennial study. The compensation consultant recommends an appropriate Peer Group of public, similarly sized, diversified financial services, insurance and asset management companies, considering the Company’s and the competitors’ strategy, mix of business and size, as measured primarily by annual revenues, market capitalization and total assets. These companies are the major competitors in one or more of the Company’s businesses, but none represent the exact business mix of the Company. Principal targets compensation for the Named Executive Officers at the median of the compensation of the named executive officers at the Peer Group companies. The companies in the Peer Group were reviewed in 2020 as part of our typical compensation review and Equitable Holdings was added based on the size of its revenue, market capitalization, assets under management, and operating profit relative to Principal. Equitable Holdings also has similar business lines. The peer group used for 2021 compensation decisions included the following companies:

	Insurance			Asset Managers
	• Ameriprise Financial • Equitable Holdings • Lincoln National • ManuLife • MetLife • Prudential Financial • Sun Life Financial • Unum Group • Voya Financial			• Affiliated Managers Group • Franklin Resources • Invesco • T. Rowe Price

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The Committee also uses annual data from third party industry surveys for its compensation decisions4.

Our Executives participate in the same broad-based employee benefit programs as other employees. Every two to three years, the Company’s non-cash employee benefit programs are compared to a custom peer group representing both proxy peer group members and select employers we believe we compete for talent with, including several local employers.

Each year, the Committee reviews the total compensation paid to the Named Executive Officers by reviewing tally sheets, which include base salaries, annual and long-term incentive awards earned, deferred compensation, outstanding equity awards, benefits, perquisites, and potential payments under various termination scenarios.

The Committee uses this information to analyze the value of compensation actually delivered vs. the compensation opportunities established by the Committee. The information is also used in making compensation and compensation plan design decisions.

2021 Executive Compensation Decisions

In general, Principal’s pay philosophy is to target the market median of the Peer Group for an Executive’s total compensation, with actual compensation varying based on performance and tenure.

The Committee made compensation decisions for the Named Executive Officers based on:

•

The Company’s strategic and human resources objectives;

•

Competitive data for the Peer Group and for a broader group of diversified financial services companies (see Appendix A for a complete list of these companies);

•

Corporate and individual performance on key initiatives;

•

Corporate performance compared to our competitors;

•

Economic conditions;

•

Retirement benefits;

•

The CEO’s compensation recommendations for Named Executive Officers;

•

Advice of the Committee’s consultant; and

•

How the elements of compensation contribute to and interrelate to total compensation.

The Committee also considers the tax and accounting consequences of each element of compensation. Following changes in the tax laws in 2017, Principal generally cannot deduct annual compensation paid to certain covered employees in excess of $1 million for each such employee, subject to limited grandfathered arrangements. While the Committee considers the tax consequences of compensation decisions, the Committee’s primary focus is designing competitive and effective compensation programs. Accordingly, these and other factors often result in compensation opportunities that will not be fully tax deductible.

The charts below show the 2021 target total compensation for our Named Executive Officers as well as the proportion of their compensation tied to Company performance. Most compensation paid to our Named Executive Officers is variable and at risk, linked to meeting our short-term and long-term financial and strategic goals and to the performance of the Company’s stock over time.

The surveys used were the McLagan Investment Management survey, Towers Watson U.S. Financial Services Studies Executive Database and the Towers Watson Diversified Insurance Study of Executive Compensation. The names of the companies participating in these surveys are included in Appendix A.

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Base Salary

When determining base salary for each Executive, the Committee considers the Peer Group median for comparable executive positions as well as the survey data referenced above, the Executive’s performance and work experience, the importance of the position to the Company and how difficult it would be to replace the Executive. The table below provides the historical base salaries(1) of the Named Executive Officers. The 2021 salary increase for Ms. Strable-Soethout was made to align her with the median salary levels among our peer companies.

Director Name	2019			2020			2021			Percent increase 2020-2021
Houston		$	900,000		$	1,000,000		$	1,000,000		0%
Strable-Soethout		$	595,000		$	645,000		$	661,000		2.5%
Halter		$	575,000		$	575,000		$	575,000		0%
Friedrich								$	579,000		NA
Schaaf								$	577,500		NA

(1)

Salaries displayed in the table are as of December 31 of year noted. This information differs from salary information in the Summary Compensation Table as the table includes salary earned and paid in the year noted. Changes in base salary are effective in March of each year.

Annual Incentive Compensation

Named Executive Officers participate in the PrinPay Plan, the Company’s broad-based annual incentive compensation plan for employees. Awards are calculated based on eligible earnings during the plan year. The PrinPay Plan links annual incentive pay to individual employee results and overall company performance and profitability. After establishing the company score, an employee’s individual performance is assessed to determine the individual performance score. The corporate component emphasizes the importance of overall corporate results and includes non-GAAP operating earnings and a variety of other financial and non-financial metrics. The Human Resources Committee may also consider factors that could not have been anticipated when corporate goals were established and adjust the corporate score up or down.

The Committee set and approved the following target awards for Named Executive Officers in the past year:

Annual Incentive Targets (as a percentage of base salary)

Named Executive Officer	2021
Houston		375%
Strable-Soethout		175%
Halter		400%
Friedrich		110%
Schaaf		110%

In establishing the target award opportunity for Messrs. Houston and Halter and Mses. Strable-Soethout,
Friedrich and Schaaf, the Committee considered the median incentive targets for comparable executive positions in the Peer Group companies, as well as the survey data referenced above.

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Performance Goal Setting

September: The Board meets to review the Company’s long-term strategy.

November: The CEO, CFO and Division Presidents recommend preliminary financial goals for the Company and business units and strategic initiatives for the next year. The Finance Committee reviews the proposed goals, underlying assumptions of the goals and initiatives, key drivers of financial performance, trends and business opportunities and advises the Board and Human Resources Committee on the appropriateness of the financial goals.

February: The Committee reviews and approves the final goals for the Company, the CEO and the other Executives with input from the Finance Committee and Board based on prior year-end financial results. All employees develop individual performance goals with their leaders that support the Company’s goals.

Final Annual Incentive Pay Award Determination

In determining final awards for PrinPay participants, the Committee uses the following approach:

Step 1: Review Operating Earnings results vs. Plan to determine initial award funding.

	Threshold			Target			Maximum			Actual 2021 Performance
Operating Earnings ($Mil.)		$	1,219		$	1,625		$	2,031		$	1,873
Payout			50%			100%			200%			162%

Step 2: Determine final PrinPay company score based on a review of performance against goals across multiple dimensions included in the Company’s annual Balanced Scorecard (e.g., Financial Measures, Customer Measures, Internal Measures and Learning and Growth Measures, etc.)

Step 3: Determine the individual performance modifier as shown below:

Individual Performance Modifier

The Individual Performance Modifier in the PrinPay Plan is used as a multiplier and is based on performance compared to 2021 goals. The Committee assessed each Named Executive Officer’s performance against the individual performance objectives identified and approved individual performance modifier payouts as shown below:

Named Executive Officer	Individual Performance Modifier		Individual Performance Objectives
Houston		100%	• Enterprise financial goals (including profit margin, assets under management, net cash flows, revenue and others); • Enterprise operational effectiveness and efficiency goals; • Capital efficiency and re-allocation objectives; • Enterprise digitalization capabilities with specific digital modernization and adoption targets, among other measures; • Wells Fargo Institutional Retirement Trust integration scorecard with specific operational and financial targets, among other measures; • Diversity and inclusion objectives; and • Other company-wide strategic priorities.
Strable-Soethout		120%	• Enterprise financial goals (including profit margin, assets under management, net cash flows, revenue and others); • Enterprise operational effectiveness and efficiency goals; • Capital efficiency and re-allocation objectives; • Enterprise strategy objectives; • Lead Management Team in strategic review in partnership with Board Finance Committee and full Board; • Narrow focus of business to better position Principal to offer an integrated set of solutions in more capital-efficient, higher-growth spaces; • Announce strategic review outcomes in conjunction with Investor Day in June. Provide targets/timelines regarding total company ROE, EPS, free capital conversion, capital deployment (buyback and dividend), and business unit earnings growth; and • Other company-wide strategic priorities.

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Named Executive Officer	Individual Performance Modifier		Individual Performance Objectives
Halter		110%	• Enterprise financial goals (including profit margin, assets under management, net cash flows, revenue and others); • Principal Global Investors financial goals (including business operating earnings, ROE, margin, cash flow, investment performance, and others); • Business unit capabilities and enterprise impact, enhancement of PGI core performance and other business unit objectives; and • Other company-wide strategic priorities.
Friedrich		100%	• Enterprise financial goals (including profit margin, assets under management, net cash flows, revenue and others); • U.S. Insurance Solutions financial goals (including business operating earnings, ROE, margin, cash flow, investment performance, and others); • Capital efficiency objectives; • Business unit technology and client solutions objectives; • Enhancement of core performance of USIS; and • Other company-wide strategic priorities.
Schaaf		95%	• Enterprise financial goals (including profit margin, assets under management, net cash flows, revenue and others); • Retirement and Income Solutions financial goals (including business operating earnings, ROE, margin, cash flow, investment performance, and others); • Wells Fargo Institutional Retirement Trust integration scorecard with specific operational and financial targets, among other measures; • Capital efficiency objectives; • Business unit digital transformation objectives; • Enhancement of core performance of RIS; • Customer and asset retention objectives; and • Other company-wide strategic priorities.

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Step 4: Calculate final award amounts

Name	2021 Eligible Earnings			2021 Target		PrinPay Score		Individual Modifier		Final Award
Houston		$	1,000,000		375%		162%		100%		$	6,075,000
Strable-Soethout		$	657,308		175%		162%		120%		$	2,236,161
Halter		$	575,000		400%		162%		110%		$	4,098,599
Friedrich		$	575,769		110%		162%		100%		$	1,026,021
Schaaf		$	571,154		110%		162%		95%		$	966,906

Executives may defer annual awards into the Excess Plan, as illustrated in the footnote to the Non-Equity Incentive Compensation column of the Summary Compensation Table, on pages 44-45.

Long-Term Incentive Compensation

The long-term incentive compensation program is designed to align the interests of Executives and shareholders. The compensation the Executives receive reflects the degree to which multiyear financial objectives are achieved and shareholder value is increased. Our retirement, life insurance and asset management products support our clients’ needs throughout different phases of their lifetimes which is why the long-term focus of the compensation programs is particularly important. The long-term incentive compensation program also encourages collaboration among Executives in pursuing corporate wide goals.

When determining long-term incentive awards to be granted to Named Executive Officers, the Committee primarily considers competitive market levels based on Peer Group and survey data, and the advice of its independent compensation consultant. The Committee also uses the following factors in determining the award to be granted to each Named Executive Officer (“Award Granted”):

•

The Named Executive Officer’s performance;

•

The importance of the Named Executive Officer to the Company over the long term;

•

The potential impact the Named Executive Officer could have on the Company’s results;

•

The Executive’s performance relative to the Named Executive Officer’s peers within the Company;

•

Company performance compared to our competitors;

•

Retention concerns; and

•

Tenure in role.

The compensation ultimately received by Named Executive Officers may vary considerably from the grant date fair value of the Award Granted, due to the Company’s performance and changes in share price that occur after the grant.

2021 Long-Term Incentive Grant
Named Executive Officer	Award Granted
Houston		$	8,550,000
Strable-Soethout		$	2,016,050
Halter		$	2,443,750
Friedrich		$	1,418,550
Schaaf		$	1,328,250

Executives’ long-term compensation in 2021 was granted as non-qualified stock options and PSUs, with each representing 50% of the total grant date fair value. The awards granted were based on the executive’s performance and compensation compared to pay opportunities of similarly situated executives at the Peer Group companies. PSUs entitle the Executive to earn shares of Common Stock if certain levels of performance are achieved. The Committee uses stock options as part of the long-term incentive program because options are an effective way to link an Executive’s compensation to changes in shareholder value. The weighting is not based on a specific formula or algorithm and is intended to create a balance between the achievement of specific operating objectives and changes in shareholder value based on the Committee’s judgment, which may change from time to time.

Stock options have a ten-year term and an exercise price equal to the closing price on the date of grant. Stock options vest in three equal annual installments starting on the first anniversary of the grant date.

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After a threshold ROE or operating income goal is achieved or exceeded5, PSUs vest based on continued service and achieving an average ROE and Pre-Tax Return on Net Revenue6, each weighted 50%, typically over a three-year period (with each three-year period treated as a “Performance Cycle”). For the 2020-2022 and 2021-2023 performance cycles, a two-year performance period was approved by the Committee due to accounting changes that may have significant impact on our reported results. The accounting change was originally going to impact our 2022 results, but the implementation was delayed by the Financial Accounting Standards Board (FASB) until 2023. We have reverted to a full three-year performance cycle for awards in 2022 and beyond.

Executives may defer the receipt of PSUs.

2021-2023 PSU Performance Cycle
Performance Level	Threshold Award		Target Award		Maximum Award (150% of Target)
Payout (% of Target)(1)		50%		100%		150%
Average ROE		7.5%		12.5%		16.3%
Average Pre-tax RONR		14.6%		29.1%		37.8%

If neither the ROE nor the OI threshold
performance
objective is met, no PSUs will
be earned or paid out.

(1)

Straight line interpolation is used to determine awards for performance between threshold and target and between target and maximum.

The Book Value per Share7 threshold tied to ROE performance measure:

If the average Book Value per Share is between $46.72 and $51.91, the ROE performance score will be reduced by 50%.

If the average Book Value per Share is below $46.72, the ROE performance score will be reduced to 0%.

The PSUs granted in 2022 for the 2022-2024 Performance Cycle will vest based on performance scales for three-year average ROE and Pre-Tax Return on Net Revenue, each weighted 50% over the performance period. Payout will be modified based on a three-year relative Total Shareholder Return metric. This change was driven to align our long-term incentive programming with the strategic objectives of the organization. For the 2022-2024 Performance Cycle, PSUs will vest at the end of the three-year Performance Cycle, based on continued employment or service.

Timing of Stock Option Awards and Other Equity Incentives

Annual grants of stock options and PSUs for Principal Executives are determined by the Committee at its February meeting which occurs following the release of the prior year’s results. The Committee’s equity grant policy proves that the grant date for all stock options and other stock-based awards will never be earlier than the date of approval, and shall be:

•

For all annual awards to Executives, the date of approval by the Committee;

•

For new employees and promotions, the later of the date of approval or the employee’s hire/promotion date;

•

In the event of an award connected with an established stock program for non-Executives, the later of the date of approval or the grant date established by the stock program; and

•

For any other awards, the date of approval.

For the 2021 PSUs, the performance threshold is met if either of the following goals is met:

•

Two-year average operating ROE of 7.5%; or

•

$1.3 billion cumulative non-GAAP pre-tax operating income (“OI”)

Operating ROE is defined as non-GAAP operating earnings divided by average stockholders’ equity available to common stockholders excluding accumulated other comprehensive income, other than foreign currency translation adjustment.

Non-GAAP pre-tax operating income is defined as income from continuing operations before income taxes per the audited Consolidated Statements of Operations less net realized capital gains (losses) less net income attributable to noncontrolling interest.

Average operating ROE was selected because it reflects the efficient use of Company capital in generating profits. Average pre-tax return on net revenue was selected as a measure because it is common among asset management peers and reflects the efficient use of Company expenditures in generating profits.

See non-GAAP financial measure reconciliations in Appendix B.

Pre-tax return on net revenue is defined as non-GAAP pre-tax operating earnings, divided by net revenue. Net revenue is defined as total non-GAAP operating revenues less benefits, claims, and settlement expenses less dividends to policyholders. See non-GAAP financial measure reconciliations in Appendix B.

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Given the proximity of the date of approval by the Committee to the date Principal entered into a cooperation agreement with Elliott Investment Management L.P. in February 2021, the Committee agreed it was appropriate to allow time for the market to price in the new information so that employees who receive stock weren’t overly benefited or disadvantaged by this volatility. Therefore, the grant date was delayed.

Benefits

The Named Executive Officers participate in Principal Life’s broad-based employee benefits program, including:

•

A qualified pension plan (except Mr. Halter8);

•

A 401(k) plan;

•

Group health, dental, vision and disability coverage and life insurance;

•

A discounted employee stock purchase plan;

•

Flexible time off; and

•

Flexible spending account plans.

Principal Life also offers all Named Executive Officers (except Mr. Halter) a non-qualified defined contribution plan (“Excess Plan”) and a defined benefit non-qualified retirement plan (“NQDB”). These benefits are offered to attract and retain talent and provide long-term financial security to employees. The NQDB helps the Company attract midcareer Executives and retain Executives by providing competitive retirement benefits. The NQDB is coordinated with the qualified pension plan and is designed to restore benefits that otherwise would accrue to Executives in the absence of Tax Code limitations on the qualified pension plan. The narrative to the Pension Benefits Table on pages 49-52 provides additional information about the NQDB and the qualified pension plan. Principal Life maintains the Excess Plan to help attract and retain Executives by allowing Executives to save for retirement and to provide matching contributions on those savings, without regard to the limitations imposed by the Tax Code on 401(k) plans. The narrative to the Non-Qualified Deferred Compensation Table on page 53 provides additional information about the Excess Plan.

The value of the retirement and savings plans for Non-Grandfathered Participants (see page 50) is targeted to be, in the aggregate, slightly above the median of diversified financial services companies because a large portion of the Company’s business centers on the sale of retirement products. The defined benefit pension plan for Grandfathered Choice Participants (see page 49) has a market value above the median and the 401(k) plan match for Grandfathered Choice Participants is below market median. These benefits were also originally designed to be slightly above market median to attract and retain employees.

All other benefits are targeted at market median in the aggregate, which supports the Company’s benefit strategy and aids in attracting and retaining talent.

Change of Control and Separation Pay

The Committee believes it is in the best interests of Principal and its shareholders to:

•

Assure that Principal will have the continued service of its Executives;

•

Reduce the distraction of these Executives that would result from the personal uncertainties caused by a pending or threatened Change of Control;

•

Encourage the Executives’ full attention and dedication to Principal; and

•

Provide the Executives with compensation and benefits upon a termination related to a Change of Control that are competitive with those of similar businesses.

For these reasons, Principal has entered into Change of Control Employment Agreements with each of the Executives. These agreements would help align the financial interests of management with the Company, particularly when the acquisition would result in termination of the Executive’s employment. These Change of Control Employment Agreements are based on market practice and do not affect other components of the Executives’ compensation. When entering into these agreements, the Committee reviewed survey data and practices of other public insurance and financial services companies. The Committee continues to review market practices in this area for potential changes in these agreements.

On January 1, 2010, Executives in the Company’s asset management operations were no longer eligible to participate in the qualified pension plan, NQDB Plan or Excess Plan as these are not common benefits for executives in that industry. This change also applied to other investment professionals.

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All benefits provided to the Executives upon a Change of Control are paid after both a Change of Control and qualifying termination of employment have occurred (sometimes referred to as a double trigger), except that the then current value of the Executive’s Excess Plan and NQDB will be paid upon a Change of Control to ensure that the value of those plans is not reduced if the Company is sold. These agreements do not provide excise tax gross ups. See pages 55-58 for details.

As noted on page 34, the Committee worked with the independent consultant on a comprehensive market analysis of termination-related benefits related to our Executive Severance Plan, which provides benefits to Executives whose employment is terminated by the Company due to a reorganization or reduction in the workforce. Additional payments may be permitted in some circumstances as a result of negotiations with Executives, particularly when Principal requests additional covenants from the Executives. See pages 55-58 for details regarding benefits under the Executive Severance Plan.

Stock Ownership Guidelines

Executives are required to own a meaningful amount of stock in the Company to ensure their interests are aligned with the shareholders’ interests and with the Company’s long-term performance. Once the Executive achieves the required stock ownership level based on market value, the ownership requirement remains at the number of shares owned at the time, regardless of subsequent changes in stock price or salary. Upon promotion, the Executive is required to meet the next level of stock ownership.

Until the ownership guideline is met, Executives are required to retain a portion of the “net profit shares” resulting from equity-based long-term incentive plan grants. Net profit shares are the shares remaining after payment of the option exercise price and taxes owed at time of exercise, vesting of RSUs and PSUs or earn out of performance shares.

The percentage of net profit shares that must be retained until ownership requirements are met are shown below:

Executive Level

Retention
Ratio

Multiple of
Base Salary

Chairman (Houston)

75%

7 times

Divisions Presidents & Executive Vice Presidents (Friedrich, Halter, Schaaf & Strable-Soethout)

50%

4 times

All Named Executive Officers comply with these guidelines.

Hedging and Pledging Policy

Principal prohibits all employees, including Named Executive Officers, from purchasing any Principal securities on margin (except for exercising stock options); engaging in short sales or trading in any put or call options; and purchasing, directly or indirectly, any financial instrument (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that is designed to hedge or offset any decrease in the market value of Principal securities.

Principal prohibits the Company’s board of directors and those employees subject to Section 16 reporting requirements, including Named Executive Officers, from directly or indirectly pledging, hypothecating or otherwise encumbering Company securities as collateral for indebtedness. This includes, but is not limited to, holding Principal securities in a margin account and pledging Principal securities as collateral for a loan. This does not apply to the exercise of employee stock options.

Repricing Policy

Principal has not repriced underwater stock options and we will not do so without shareholder approval.

Clawback Policy

The Committee has adopted a compensation recovery policy that applies to Executives. Principal can recover any incentive compensation if the amount of the compensation was based on achievement of financial results that were subsequently restated if the Committee decides that the Executive engaged in fraud or intentional misconduct that caused the restatement of the Company’s financial statements, and if the amount of the Executive’s incentive compensation or equity award would have been lower had the financial results been properly reported. Principal can

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also cancel or recover incentive compensation, received in the event of either reputational or financial harm to the Company that arises directly or indirectly from an Executive’s misconduct, gross negligence, misfeasance or nonfeasance.

Gross-Up Policy

Executives do not receive any income tax gross-ups, except that all employees, including Executives, receive an income tax gross-up in connection with benefits provided with relocation.

Human Resources Committee Report

The Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and, based on such review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Jocelyn Carter-Miller, Chair
Michael T. Dan
Scott M. Mills
Claudio N. Muruzabal
Alfredo Rivera

Risk Assessment of Employee Incentive Plans

The Human Resources Compensation Department and the chief risk officers in the business units conducted a review and analysis of the Company’s employee incentive compensation plans to determine whether the plans are reasonably likely to have a material adverse effect on the Company and reviewed their processes and conclusions with the Chief Risk Officer. The following factors, among others, were assessed:

•

Plan design;

•

Performance metrics and quality of goal setting;

•

Administrative procedures, including governance practices;

•

Plan compliance, communications and disclosures;

•

Potential risks created by the plans;

•

Risk control factors and their effectiveness; and

•

Inherent and residual risk ratings.

Some key factors that mitigate risks to the Company of its incentive plans are the Company’s stock ownership guidelines for Executives, the compensation recovery policy and the Human Resources Committee’s ability to exercise its judgment in evaluating the quality of performance achievements when determining earned compensation. Employees are prohibited from purchasing the Company’s securities on margin (except for the exercise of stock options); engaging in short sales or trading in any put or call options; and purchasing, directly or through a designee, any financial instrument (including prepaid variable forward contracts, equity swaps, collars and exchange funds) designed to hedge or offset any decrease in the market value of Company securities.

A summary of the assessment process and conclusions was reviewed with the Committee. Based on this analysis, the Company has determined that its employee incentive compensation plans are designed to encourage behaviors that create and maintain shareholder value, do not encourage excessive risk, and are not reasonably likely to have a material adverse effect on Principal.

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Summary Compensation Table

The following table sets forth the compensation paid to the Named Executive Officers for services provided to the Company and its subsidiaries during 2019, 2020 and 2021.

Name	Year		Salary(1)			Bonus			Stock Awards(2)(3)			Option Awards(2)			Non Equity Incentive Compensation(4)			Changes in Pension Value and Non- Qualified Deferred Compensation Earnings(5)			All Other Compensation(6)			Total(7)
Houston		2021		$	1,000,000		$	0		$	4,275,014		$	4,275,011		$	6,075,000		$	1,699,323		$	241,815		$	17,566,163
		2020		$	890,385		$	0		$	3,874,991		$	3,874,991		$	2,671,154		$	4,010,196		$	292,701		$	15,614,418
		2019		$	900,000		$	0		$	3,487,482		$	3,487,500		$	3,375,000		$	3,277,616		$	220,453		$	14,748,051
Strable-Soethout		2021		$	657,308		$	0		$	1,008,005		$	1,008,051		$	2,236,161		$	670,792		$	110,389		$	5,690,706
		2020		$	588,923		$	0		$	886,859		$	886,880		$	824,492		$	1,944,503		$	102,767		$	5,234,424
		2019		$	595,500		$	0		$	818,807		$	818,800		$	990,019		$	1,389,310		$	79,569		$	4,692,005
Halter		2021		$	575,000		$	0		$	1,221,894		$	1,221,868		$	4,098,599		$	42,537		$	32,886		$	7,192,784
		2020		$	535,192		$	0		$	891,256		$	891,266		$	1,609,430		$	591,232		$	21,125		$	4,539,501
		2019		$	575,000		$	0		$	848,113		$	848,150		$	2,072,875		$	669,048		$	14,250		$	5,027,436
Friedrich		2021		$	575,769		$	0		$	709,265		$	709,303		$	1,026,021		$	511,779		$	56,471		$	3,588,608
Schaaf		2021		$	571,154		$	0		$	664,140		$	664,095		$	966,906		$	1,495,317		$	36,400		$	4,398,012

(1)

Includes 2021 salary deferred into the qualified 401(k) Plan and the Excess Plan, as shown below (information on deferrals for 2020 was included in last year’s proxy statement):

Named Executive Officer	401(k) Employee Contribution			Excess Plan Employee Contributions			Total Employee Contributions
Houston		$	21,385		$	80,000		$	101,385
Strable-Soethout		$	26,000		$	65,731		$	91,731
Halter		$	15,346		$	0		$	15,346
Friedrich		$	8,942		$	46,062		$	55,004
Schaaf		$	14,662		$	45,693		$	60,355

(2)

Amounts represent the grant-date fair value of Option awards granted in 2021, 2020 and 2019 under the ICP. Values in respect of Options and PSUs were determined in accordance with Topic 718, and the assumptions made in calculating them can be found in Note 18 of the Notes to the Consolidated Financial Statements in Item 8 of our 2021 Form 10-K. The Option awards granted in 2021 are described in more detail in the Grants of Plan-Based Awards table on page 46.

(3)

PSUs will be earned and paid in shares of Common Stock only if performance requirements are met or exceeded. The PSUs are eligible for dividend equivalents, and the dividend equivalents are subject to the same performance requirements as the corresponding PSUs and are only earned if the performance measures are met or exceeded. The maximum payout for the 2019, 2020, and 2021 PSUs is 150% of the target number of PSUs. If the PSUs granted in 2021 are earned at the maximum payout, the grant date value of such PSUs would be as shown in the following table, and the amounts reported in the Stock Awards column, above, would be increased by the amount shown in the column to the far right of the following table. The table below shows the maximum payouts for the 2021 Performance Awards included in this column of the “Summary Compensation Table.”

Named Executive Officer	Grant Date Values Assuming Payout at Maximum
Houston		$	2,137,507
Strable-Soethout		$	504,003
Halter		$	610,947
Friedrich		$	354,633
Schaaf		$	332,070

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(4)

The amounts shown represent annual incentive compensation awards earned in 2021 and paid in 2022 and include the following amounts deferred into the qualified 401(k) Plan and Excess Plan:

Named Executive Officer	Employee Contributions on Incentive Pay
Houston		$	491,615
Strable-Soethout		$	1,122,674
Halter		$	11,654
Friedrich		$	11,842
Schaaf		$	89,268

(5)

The amounts accrued each year differs from the amount accrued in prior years due to increases in age, service and pay. The change in pension value is also highly sensitive to changes in the interest rate used to determine the present value of the payments to be made to the executive. In particular, incremental increases for Mr. Houston and Mss. Strable-Soethout, Friedrich and Schaaf are especially sensitive as they are still earning benefits under the Traditional Formula. Assumptions underlying the determination of the amount of increase in actuarial value for both the qualified and non-qualified pension plans are disclosed on page 52. Changes in these assumptions and compensation changes will impact this value annually. There are no above market earnings on deferred compensation.

(6)

All Other Compensation for the Named Executive Officers consists of the following:

Named Executive Officer	Perquisites & Other Personal Benefits(a)			Principal Life Contributions to Defined Contribution Plans(b)			Total
Houston		$	21,546		$	220,269		$	241,815
Strable-Soethout		$	21,481		$	88,908		$	110,389
Halter		$	18,261		$	14,625		$	32,886
Friedrich		$	7,842		$	48,629		$	56,471
Schaaf		$	6,307		$	30,093		$	36,400

(a)

Represents the incremental aggregate cost to Principal for all perquisites provided during the year, including the value of an annual physical examination, business spousal travel, and gifts given to all sales conference attendees. Mr. Houston’s information includes the use of the Company’s corporate aircraft for limited personal travel. In addition, we have included director fees for Ms. Strable-Soethout and Mr. Halter for serving on the boards of certain international affiliates.

(b)

The amounts shown below are Principal Life’s matching contributions to the 401(k) Plan and the Excess Plan. The Excess Plan’s matching contributions are also included in Principal Life’s contributions in the Non-Qualified Deferred Compensation table on page 53.

Named Executive Officer	401(k) Matching Contribution Made by Principal Life			Excess Plan Matching Contribution Made by Principal Life			Total
Houston		$	14,625		$	205,644		$	220,269
Strable-Soethout		$	14,625		$	74,283		$	88,908
Halter		$	14,625		$	0		$	14,625
Friedrich		$	14,625		$	34,004		$	48,629
Schaaf		$	8,692		$	21,401		$	30,093

(7)

Sum of the total dollar value of the other columns in this table.

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	Outstanding Equity Awards at Fiscal Year End December 31, 2021					47
	Option Exercises and Stock Vesting					48
	2021 CEO Pay Ratio					48
	Pension Plan Information					49
	Pension Distributions					51
	Pension Benefits					52
	Non-Qualified Deferred Compensation					53
	Qualified 401(k) Plan and Excess Plan					53
	Severance Plans					54
	Change of Control Employment Agreements					55
	Potential Payments Upon Termination Related to a Change of Control					58

	Proposal Two—Advisory Vote to Approve Executive Compensation					59

	Proposal Three—Ratification of Appointment of Independent Registered Public Accountants					61
	Audit Fees					61
	Audit Related Fees					61
	Tax Fees					61
	All Other Fees					61

	Security Ownership of Certain Beneficial Owners and Management					63
	Section 16(a) Beneficial Ownership Reporting Compliance					65

	Questions and Answers About the Annual Meeting					66

	Appendix A Executive Compensation Benchmarking Study Participants					A-1
	Appendix B Non-GAAP Financial Measure Reconciliations					B-1