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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.            )

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Notice of 20192021 Annual Meeting
of Shareholders and Proxy Statement

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Dear Fellow Shareholders:

You are invited to attend the annual meeting of shareholders on Tuesday, May 21, 2019,18, 2021, at 9:00 a.m., Central Daylight Time, at 711 High Street, Des Moines, Iowa.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: http://www.meetingcenter.io/290248661. The password for the meeting is PFG2021. 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 Internetinternet 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 do not need to attend the annual meeting to vote. 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.internet. Thank you for acting promptly.

Sincerely,

Daniel J. Houston
Chairman, President and Chief Executive Officer

April 9, 20195, 2021

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Notice of Annual Meeting of Shareholders

Agenda:

1.

Elect four Class III Directors;

2.

Hold an advisory vote to approve the compensation of our named executive officers;

3.

Ratify the appointment of Ernst & Young LLP as the Company's independent auditors for 2019;2021;

4.

Approve the Principal Financial Group, Inc. 2021 Stock Incentive Plan; and

4.5.

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 27, 2019.24, 2021. It is important that your shares be represented and voted at the meeting. Whether or not you plan to attendPlease vote by any one of the meeting, please vote:following methods:

Internet	​	Telephone	​	Mail
	​		​
Through the Internet: visit the website noted in the notice of Internetinternet 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 freetoll-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.

If you attend the meeting, you will need to register and present a valid, government issued photo identification. If your shares are not registered in your name (for example, you hold the shares through an account with your stockbroker), you will need to bring proof of your ownership of those shares to the meeting to register. You should ask the broker, bank or other institution that holds your shares to provide you with either a copy of an account statement or a letter that shows your ownership of Principal Financial Group, Inc. common stock on March 27, 2019. Please bring that documentation to the meeting to register.

By Order of the Board of Directors

Karen E. ShaffChristopher J. Littlefield
Executive Vice President, General Counsel and Secretary

April 9, 20195, 2021

Your vote is important! Please take a moment to vote by Internet,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 makeup and the Company's existing strategic initiatives, risk factors, and 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 and an understanding of current technology issues. The Committee periodically uses an outside consultant to assist with this responsibility, and these assessments provide direction in 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. In 2020, the performance of each Director, regardless of whether his or her term is expiring, was evaluated. Input to this process is also received from the other Directors and management and an outside consultant may be engaged to assist with these reviews. Director performance and capabilities are evaluated against thedesired characteristics and relevant considerations, including those noted above. Following the Committee's discussion, the outside consultant, if any,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 committee's performance.

All Board members have:

•

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

•

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

•

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

Several current independent Directors have led businesses or major business divisions as CEOChief Executive Officer ("CEO"), President, or Executive Vice President (Ms. Bernard,(Mr. Auerbach, Ms. Beams, Mr. Dan, Dr. Gelatt, Mr. Hochschild, Mr. Mills, Ms. Nordin, Mr. Pickerell, Ms. Richer, Mr. Rivera and Ms. Tallett). The following chart shows areas central to the Company's strategy, initiatives and operations for which independent Directors have specific training and executive level experience that assists them in their responsibilities.

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Though the Board does notCompany's strategy, initiatives and operations for which independent Directors have a formal diversity policy, diversityspecific training and executive level experience that assists them in their responsibilities.

Diversity of the Board is a valued objective.objective, as reflected in the Board's Diversity Policy. Therefore, in addition to other considerations, the Nominating and Governance Committee reviews the Board's needs and diversity, including in terms of age, race, gender, national origin, backgrounds, experiences and areas of expertise, when recruiting new Directors. The current Board reflects these values, for example, in the gender (50%(45% female) and racial (20% African American)(27% people of color) composition of our independent Directors.Directors, as of December 31, 2020 (those percentages are 50% and 25%, respectively, as of March 15, 2021).

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

•

In 2018, Forbes named Principal one of America's Best Employers.2020, Pensions and Investments placed Principal at number seven on its list of Best Places to Work in Money Management for companies with 1,000 or more employees. employees for the eighth consecutive year;

•

IDG's Computerworld named Principal one of the 100 Best Places to Work in Information Technology for the 17^th year. 19th year, ranking No. 32; and

•

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 bringthrive, advance, and share their best selvesunique perspectives.

•

In 2020, Principal was again named to work. Last year, we earned the number one spot on Forbes' list of Best Places for Women to Work. Work;

•

Principal was again named one of Working Mother magazine's 100 Best Companies, andCompanies;

•

Principal was recognized for the 1820^th time as one of the National Association of Female Executives' Top Companies for Executive Women. Women;

•

Forbes placednamed Principal in the top ten on its listone of America's Best Employers for Diversity and, for the third consecutive year, Diversity;

•

Principal earned a perfect score on the Human Rights Campaign Foundation's 2018 CorporateDisability:IN's Disability Equality Index. Index;

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Principal was recognized as one of the Ethisphere Institute's World's Most Ethical Companies for the fifthsixth consecutive year (and ninth10th year overall), emphasizing the commitment to leading ethical business standards and practices. Only five companies in the financial services industry earned this distinction in 2018. 2020;

•

Principal maintains 13 Employee Resource Groups and Networks in which more than 4,000 employees participate that connect employees based on similar interests or aspects of diversity, including gender equality, LGTBQ+ issues, racial equality, enabling all abilities, valuing military experience and sustainability;

•

Principal ranked #32 on Diversity MBA's 50 Out Front: Best Companies to Work for Women and Diverse Managers;

•

Principal was also named a Best placemember of the 2021 Bloomberg Gender-Equality Index; and

•

And for Giving Back by the organization Great Place6th straight year, we received a score of 100/100 on the Corporate Equality Index, naming us one of the "Best Places to Work in recognition of our Volunteer Time Off policy and our contributions to community and charitable causes through corporate donations and employee fund matching programs.

for LGBTQ Equality".

The Board's effectiveness benefits from Directors who have the necessary skills, backgrounds and qualifications needed by the Board 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. Nevertheless, Directors' terms must not extend past the annual meeting following their 72nd birthday. The tenure of the independent Directors, following retirements that will occur immediately following the 2021 Shareholders Meeting, is listed below. The average tenure of Principal's independent Directors is 11.6will be 7.27 years.

Four additional tenured Directors will be replaced over the next five years, continuing our process of regularly refreshing the talents and perspectives reflected on our Board. The tenure of the Directors, as reflected in the chart above, balances deep knowledge of the Company, its industry and relevant issues, with fresh perspectives and additional expertise, while providing the oversight and independence needed to meet the interests of our shareholders.

One tenured Director will retire immediately following our 2021 Annual Shareholders Meeting and two additional directors will retire over the next two years continuing our process of regularly refreshing the talents and perspectives reflected on our Board.

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 made through the Company's website and by theits Investor Relations staff.

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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 stockholdershareholder or group of up to 20 stockholders,shareholders, owning 3% or more of the Company's outstanding common stock ("Common Stock") continuously for at least three years, can nominate director candidates, constituting up to 20% of the Board, in the Company's annual meeting proxy materials.

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Agreements with Elliott.

On February 21, 2021, PFG entered into a cooperation agreement (the "Cooperation Agreement") with Elliott Investment Management L.P. and certain of its affiliates (collectively, "Elliott"). The below is a summary of the Cooperation Agreement, which does not purport to be complete and is qualified in its entirety by reference to that agreement, a copy of which is attached as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 22, 2021. and is incorporated herein by reference (the "8-K").

Pursuant to the Cooperation Agreement, the Board, upon the recommendation of the Nominating and Governance Committee (the "Nominating Committee"), appointed Mary Elizabeth "Maliz" Beams to the Board and to the Board's Finance Committee (the "Finance Committee"). Ms. Beams was appointed as a Class I member of the Board, with an initial term expiring at the 2023 Annual Meeting of Shareholders. She will receive compensation consistent with that received by the Company's other non-employee Directors. She also entered into a customary indemnification agreement with the Company in the same form entered into by the other Directors. The Board affirmatively determined, upon the recommendation of the Nominating Committee, that Ms. Beams qualifies as "independent" under the rules of the Nasdaq Global Select Market LLC.

In addition, the Company and Elliott agreed to cooperate to identify and mutually agree upon an additional independent Director with expertise and skills as determined by the Nominating Committee (together with Ms. Beams, the "New Directors"). The Board agreed to appoint the additional New Director to the Board by September 30, 2021, subject to customary on-boarding processes.

The Cooperation Agreement provides for customary Director replacement rights for the New Directors during the period ending on the 30th day prior to the deadline for the submission of stockholder nominations for non-proxy-access Director candidates for the Company's 2022 Annual Meeting of Shareholders (the "Cooperation Period") and similar rights apply if Ms. Beams ceases to serve on the Finance Committee prior to the Company's proposed Investor Day, which will occur on or before June 30, 2021 (the "Investor Day"). Elliott's rights in connection with identifying such substitutes terminate at such time as Elliott's net long economic exposure to the Company's common stock falls below 2%.

Under the terms of the Cooperation Agreement, Elliott agreed to abide by customary standstill restrictions (subject to certain exceptions relating to private communications to the Company) during the Cooperation Period, which restrictions terminate upon the occurrence of certain events, including, among other things, the Company's material breach of the Cooperation Agreement and the Company's entry into certain change of control and other extraordinary transactions. Under the Cooperation Agreement, Elliott has agreed to appear in person or by proxy at any annual or special meeting of the Company's stockholders held during the Cooperation Period and to vote (i) in favor of the slate of Directors nominated by the Board for election, and in accordance with the recommendations of the Board on all other proposals and (ii) against the removal of any incumbent Directors or the election of any Director nominees not recommended by the Board; provided, however, that if both Institutional Shareholder Services Inc. ("ISS") and Glass, Lewis & Co., LLC ("Glass Lewis") recommend otherwise with respect to any of the Company's proposals at any such meeting (other than proposals relating to the election or removal of Directors, the size of the Board, or filling vacancies on the Board), Elliott is permitted to vote in accordance with the ISS or Glass Lewis recommendation. The Company and Elliott also agreed to customary mutual non-disparagement obligations, and that the size of the Board would not be increased to greater than 14 members during the Cooperation Period.

Concurrently with their entry into the Cooperation Agreement, the Company and Elliott entered into an information sharing agreement (the "Information Sharing Agreement") to enable the Company to share with Elliott certain confidential information related to a review to be overseen by the Finance Committee in advance of the Investor Day.

There are no arrangements or understandings between Ms. Beams and any other person pursuant to which Ms. Beams was elected to the Board, other than with respect to the matters referred to in the 8-K.

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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 20192021 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 IIIII Directors With Terms Expiring in 20192024

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Continuing Class III Directors With Terms Expiring in 2022

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Continuing Class I Directors With Terms Expiring in 2023

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Continuing Class I Directors With Terms Expiring in 2020

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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:

•

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

•

Majority of independent Directors (10(12 out of 11)13);

•

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

•

Strong and experienced independent Lead Director;

•

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

•

Policy regarding Directors' service on other public company boards;

•

Board and committee self assessmentsself-assessments conducted annually;

•

Director assessmentevaluations conducted no less frequently than in connection with Director nomination process;process (all Directors were evaluated in 2020);

•

Robust stock ownership guidelines for Directors;

•

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

•

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

•

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

•

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

•

Multiple executive sessions involving solely independent Directors at each regularly-scheduledregularly scheduled Board meeting; and

•

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 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 andCEOand CEO be combined or separate. Ms. Tallett,Mr. Mills, the Lead Director, was selected by the independent Directors.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 ("Executive Sessions"); leads the Board's annual self evaluation;self-evaluation; calls special Board meetings if the Chairman is unable to act; and leads the Board's CEO succession planning discussions. Executive

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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 2018.

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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.

The Nominating and Governance Committee:    risks 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 the 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 as anin the context of the overall management of risk for our global enterprise, wide concern that involvesinvolving people, processes, and technology,technology. As a financial services company, the Board understands the persistent and accordingly treats itdynamic 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. It embodies a persistentmatter, and dynamic threat to our entire industry and is not limited to information technology. Thethe Board will remain focused on this critical priority by continuing to receivereceives 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 includingwith necessary policies, practices and controls to manage the risk.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 positions at the levels of senior vice president and above.executive positions. In addition, the Human Resources

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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 the Human Resources Committee also receives regular updates on key talent indicators for the overall workforce, including diversity, recruiting and development programs.

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Table of Contents 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 may have with the Company and its subsidiaries. The Board most recently made these determinations for each Director in February 2019,2021, based on:

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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;

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

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

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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. Bernard,Beams, Ms. Carter-Miller, Mr. Dan, Dr. Gelatt, Ms. Helton, Mr. Hochschild, Mr. Mills, Ms. Nordin, Mr. Pickerell, Ms. Richer, Mr. Rivera, and Ms. Tallett. 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. Betsy Bernard and Daniel Gelatt retired from Board service in May 2020 and during their service were determined by the Board to have had no material relationship with the Company and to be independent.

Some Directors have categorically immaterial relationships and transactions with Principal:

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Ms. Bernard, Dr. Gelatt, Ms. Helton, Mr. Pickerell, Mr. Rivera and Ms. Tallett are customers of the Company's subsidiaries. Prior to the Demutualization (see page 64)74), Directors were required to own an insurance policy or annuity contract issued by Principal Life. All insurance policies, annuity contracts and agreements for trust services held by Directors are on the same terms and conditions as those offered to the public.

•

The Gelatt family companies (Dr. Gelatt is the CEO) and an affiliated trust own insurance and pension products issued by Principal Life.

•

Ms. Bernard, Ms. Nordin, Mr. Pickerell and Ms. Tallett are directors, and Messrs. HochschildAuerbach, Hochschild. Mills and MillsRivera are executive officersexecutives of for profitfor-profit entities and Dr. Gelatt is a Director of a not for profit entity, with which the Company's subsidiaries conduct ordinary commercial transactions.

Certain Relationships and Related Party Transactions

Nippon Life Insurance Company ("Nippon Life"), which held approximately 6.3% of the Company's Common Stock at the end of 2018, is the parent company of Nippon Life Insurance Company of America ("NLICA"). Nippon Life, NLICA and Principal Life have had business relationships for more than 20 years. In 2018, Nippon Life and NLICA paid the following amounts to Principal Life or its affiliates: $179,327 for pension services for defined contribution plans maintained by NLICA and an affiliate (mostly paid by plan participants); $1,250 for deferred compensation plan services; $7,567,947 for investment services. The Company owns approximately three percent of the common stock of NLICA and Principal Life purchased public bonds with a market value at the end of 2018 of $61,150,000 during Nippon Life's $2 billion public issuance in October of 2012. NLI US Investments, Inc. ("NLI"), owns approximately 19.80% of Post Advisory Group, LLC ("Post"), an affiliate of the Company. During 2018, Post paid NLI an aggregate of $2,772,488.46 in dividends. Due to the longstanding relationship between Nippon and Principal Life, Nippon employees occasionally train on-site at Principal Life or at one of its affiliates. During 2018, Principal Life paid Nippon Life $134,996 in salary reimbursements in connection with these situations. Principal affiliates manage accounts holding securities issued by Nippon Life, and Nippon Life invests in funds managed by Principal affiiates.

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As of December 31, 2018,2020, the Vanguard Group, Inc. managed funds holding in the aggregate 10.73%approximately 10.61% of the Company's Common Stock. During 2018For 2020, investment companies sponsored by Principal Shareholder Services, Inc. paid Vanguard $44,551$74,534 for sub-transfer agent services. During 2018,2020, Vanguard paid $1,228,848$252,346 in rent for lease of space to a borrower of the Principal Life general account. Principal Life and affiliates hold, or manage accounts holding, securities issued by Vanguard funds. Vanguard provides mutual fund distribution services pursuant to a contract with Principal Funds

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Distributors, Inc. ("PFD"), for which PFD paid Vanguard $2,611 in 2020. Principal Life accounts invested $65,000,000 in privately-placed debt issued by Vanguard in 2020.

As of December 31, 2018,2020, BlackRock, Inc. (together with its affiliates "BlackRock") and certain subsidiaries collectively owned or managed funds holding in the aggregate 6.7%approximately 8.1% of the Company's common stock.Common Stock. During 2018,2020, Principal Global Investors, LLC paid BlackRock Fund Advisors $1,789,443$1,779,962 in management fees associated with the Principal Funds, Inc. In 2018,2020, Principal Lifeaffiliates paid BlackRock Inc. $2,597,513$4,230,560 for fees in connection with the use of, and services and consulting furnished in connection with, the Aladdin system and $373,382 for software. In 2018, PGI Trust Company paid BlackRock Fund Advisors $64,377.34 in sub-advisory fees associated with the Morley Actively Managed Fund. In 2018, a Principal affiliate paid $20,503 in mangement fee rebates to a BlackRock affiliate.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, 2020, Nippon Life Insurance Company ("Nippon Life") held approximately 6.64% of the Common Stock. Nippon Life is the parent company of Nippon Life Insurance Company of America ("NLICA"). Nippon Life, NLICA and Principal Life have had business relationships for more than 20 years. In 2020, Nippon Life and NLICA paid the following amounts to Principal Life or its affiliates: $188,919 for pension services for defined contribution plans maintained by NLICA and an affiliate (mostly paid by plan participants), $1,250 for deferred compensation plan services, and $8,055,429 for investment services. The Company owns approximately three percent of the common stock of NLICA and Principal received $53,704 in dividends from such stock in 2020. Principal Life holds privately-placed bonds issued by Nippon Life with a market value at the end of 2020 of $80,625,000. NLI US Investments, Inc. ("NLI"), owns approximately 19.33% of Post Advisory Group, LLC ("Post"), an affiliate of the Company. During 2020, Post paid NLI an aggregate of $4,519,512 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, 2020, Capital Research Global Investors held approximately 5.8% of the Common Stock. There were no relationships or related party transactions to report in 2020.

Dwight Soethout, Vice President—Finance,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 2018,2020, he received approximately $599,284$578,817 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 may be found at www.principal.com.

Board Meetings

The Board held 1213 meetings in 2018,2020, five of which were two day,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. All ofWhile 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 2020, all Directors then on the Board attended the 2018 Annual Meetingannual shareholders meeting in person or virtually except Dennis FerroBetsy Bernard who leftretired from Board service immediately following the Board in May 2018.conclusion of that meeting.

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 available at www.principal.com.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. The Committees review their charters and performance annually. Committee charters of the Audit, Finance, Human Resources and Nominating and Governance Committees are available on the Company's website, www.principal.com.

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Membership and responsibilities of each of the Board Committees:

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SustainabilityESG at Principal

Doing what matters most for our global community

Principal aims to provide not only positivefoster a world where financial outcomes forsecurity is accessible to all. To fulfill this commitment, our clientsESG (Environmental, Social, Governance) approach harnesses the power of our people and customers, but also positive outcomes forour products while creating sustainable pathways. We measure our continued progress by focusing on the communitiesfollowing material ESG impacts: employee development and inclusion, financial inclusion, governance, ethics and risk, environmental impact, consumer product impact and responsible investing. In 2021, we joined the United Nations Global Compact, the world's largest corporate sustainability initiative, at the Participant level in which it operates across the globe. Ourrecognition of our ongoing commitment means we will invest, conserve, volunteer and lead responsibly and sustainably to help realize the promise of a better future and a better world. We are, for example, humbled to have been named a Most Ethical Company by the Ethisphere Institute for the ninth year in 2018.balancing our business objectives with responsible business practices.

A full review of Principal's environmental, social and governance ("ESG") practices can be found in our Corporate Social Responsibility Reportreport available on www.principal.com. A summary is below:

Employee Development and Inclusion

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Giving back:    Helping people is an important part83% employee engagement due to increased transparency, communication, and responsiveness during COVID as cited by employees Baseline Inclusion Index score of the Principal culture,81%⁽¹⁾; and our employees, along with the Principal

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Ranked No. 29 on Forbes 2020 list of America's Best Employers for Women.

Financial Group Foundation, work together to give back, with a focus on supporting people's progress toward long-term financial security. In the next five years, we are focusing on reaching 50,000 persons, ages 15-30, around the world and helping them earn and save more. Highlights of recent developments and results include:Inclusion

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Annually, Principal Foundation contributes more than $15 million through grants, employee and match giving, sponsorships, pro bono, and in-kind donations. More than 1,500 organizations in 450 communities around the world benefit from our local action.

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We've raised $17.7 million over 12 years in support of 130,000 Iowa children through our sponsorship of the Principal Charity Classic, an annual PGA TOUR Champions event.

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3,124 Principal employees logged 40,057 volunteer hours in 2018.donations;

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Our Global Impact Experiences tripsemployees, retirees and financial professionals across the U.S. donated $5 million and contributed more than 22,000 volunteer hours to India in 2017their favorite causes; and 2018 enabled eighteen employees, selected from around the world, to help young people in poverty build skills for future employment.

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The Principal Foundation in 2019 launched a financial security collaborative powered by employees; this effort will focus on improving financial security for underserved working individuals.Expanded initial COVID care and response of $25 million to include additional support to employees, customers and communities.

Sustaining the environment:    Principal works to reduce its environmental impact while engaging our employees, stakeholders, and supply chain through awareness initiatives. Our results include:Governance, Ethics & Risk

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We reduced our U.S. corporate carbon emissionsNamed one of the World's Most Ethical Companies for the 10th time by 35% against our 2010 baseline.Ethisphere Institute (2020).

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We recycled 87%As part of our Board's Diversity Policy, the Nominating and Governance Committee reviews the Board's diversity metrics reflected in the independent Directors of the materials removed during a multi-year corporate campus renovation.current Board (as of March 15, 2021) which are 50% female and 25% people of color; and

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We supported our employees' grassroots efforts keeping more than 8,960 poundsOver 95% of electronics, plastic bags and paper out of landfills in 2018.

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We composted or donated 75,442 lbs. of food from our corporate campus cafes in 2018.

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Three of our corporate campus buildings are LEED Certified.

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We have consistently earned a CDP Leadership scoreemployees trained on our responseglobal code of conduct, cybersecurity, and data privacy policies.

(1)

The inclusion index measures our progress toward fostering a workforce culture where employees feel valued and respected, feel encouraged to the Carbon Disclosure Project's Climate Change questionnaire since 2013.

Investing responsibly:    Our flagship asset management affiliate, Principal Global Investors ("PGI"), integrates ESG investing principles into its approach to portfolio management across asset classes,learn and PGI's signatory status to the United Nations sponsored Principles for Responsible Investment gives us a voicetry new things, are comfortable being themselves, and are supported in defining and shaping the ongoing global ESG discussion. As a result of its efforts, PGI received an A+ grade relative to the Principles for Responsible Investment following an assessment of its 2018 ESG investment practices. Integrating ESG factors takes place across all asset classes managed by PGI, with the specific approach determined by the applicable investment process and asset class.

The commitment to ESG issues of our equity securities investment management group, Principal Global Equities, is centered on one factor: the fiduciary responsibility owed to clients to act in their long-term interests. Principal Global Equities has over a decade of custom socially responsible and faith-based mandates for $2.5 billion of assets under management. ESG strategies utilized include the qualitative assessment of risk factors and change catalysts and the use of analytical tools to increase the understanding of risks and issues, recognizing that trends and scope for change matter more than nominal scores.

The investment analysts staffing our fixed income investment group, Principal Global Fixed Income, supplement their fundamental research with insights from ESG research providers. Robust and evolving training programs for our research analysts to enhance awareness of ESG considerations have been incorporated into its processes. The group manages nearly $159 million of assets in renewable energy and green bonds. Principal Global Fixed Income creates client-defined ESG portfolios by eliminating assets specified by a client and by:

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Assigning a specific ESG signal for each issuer in their field and discussing any concerns about ESG issues during meetings with the issuer's corporate management teams; responses are incorporated into the assessment of the issuer's outlook and potential for inclusion in a client portfolio.

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Assigning an explicit numeric ESG score which is factored into the "fundamentals" component of a "fundamentals, technical, and valuations" framework, and accounts for 10% of that score.

Our real estate asset management affiliate, Principal Real Estate Investors ("PrinREI"), uses a unique ESG framework called the Pillars of Responsible Property Investing ("PRPI") initiative to help drive asset management and fiduciary governance and deliver positive financial and environmental results for 175 assets totalling more than 35 million square feet of real estate with a gross asset value of approximately $10.8 billion. The Principal Real Estate Investors Responsible Property Investing Policy covers all phases of the real estate investment lifecycle and guides PrinREI's approach to real estate investment and management for these properties.

The PRPI philosophy integrates ESG within every aspect of PrinREI's investment process for these assets, including:

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All potential investments are evaluated using a process that includes ESG considerations, including a formal review of ESG aspects such as utility performance, certifications, sustainability programs and policies, and climate risk and resilience features.

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Assets are continuously monitored to identify and capitalize on ESG value-creation opportunities and risk reduction efforts. For example, properties participating in the PRPI initiative are required to track utility performance on a monthly basis, implement operational best practices, and engage tenants in building-level sustainability efforts. Asharing new pilot effort will assess property-level climate risk with the goal of strengthening the ability to identify and manage these risks portfolio-wide. Also, a recently broadened appraisal scope requires the review and valuation of high-performance and energy-efficient attributes of properties.

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PrinREI discloses and promotes building-level sustainability attributes to potential buyers.

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PrinREI has incorporated ESG considerations into lending activities, including developing a Responsible Property Investing Lending Policy to detail ESG practices and strategies regarding real estate lending. PrinREI tracks the sustainability attributes of properties on which it manages mortgage debts, monitors exposure to natural hazards and other risks, and maintains a working group focused on improving ESG performance.

PrinREI's recent achievements include (all as of the third quarter of 2018):

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18.5% energy savings in the PRPI portfolio since 2008, avoiding over $52.5 million in energy costs.

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61 ENERGY STAR certified buildings in the PRPI portfolio.ideas.

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Environmental Impact

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57 LEED certified buildings40% decrease in U.S. greenhouse gas emissions over the PRPI portfolio.last 10 years;

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89%A- climate change leader rating from the Carbon Disclosure Project ("CDP") for the 8th consecutive year; and

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Principal Real Estate Investors received a 4-star rating from GRESB, the global ESG benchmark for real estate for the 5th consecutive year.

Consumer Product Impact

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Over the next 5 years, we will double the number of the office portfolio managed by PrinREI is green certified (LEED/ENERGY STAR).minority and women owned small to mid-size businesses we support through product access, micro-finance, community development, and financial education;

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Named a 2018 ENERGY STAR Partner ofLead participant in the Year, Sustained Excellence award winner.UN Global Compact Sustainable Finance Action Platform; and

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Focus on digital channel access, micro-finance, and financial education.

Responsible Investing

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Principal Global Investors ("PGI") integrates ESG investing principles into its approach to portfolio management across asset classes;

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Two participating private fundsPGI'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 and PGI has received 4-Star designationsan A+ grade from GRESB (formerly known as the Global Real Estate Sustainability Benchmark) in 2018.UN PRI for Strategy and Governance for its ESG investment practices; and

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Received an A+ from the Principles for Responsible Investment Direct Property Module in 2018.Manages over $10.6 billion of socially responsible assets.

AdvancingFor decades, we've embraced Environment, Social, and Governance (ESG) considerations as a culture of diversity and inclusion:    Principal defines diversity as "the mix" and inclusion as making the most of "the mix." Our robust diversity and inclusion effort manifests itself in a variety of ways, including nearly a dozen active employee resource groups, inclusion programs, Board diversity, and recruitment of world class talent. Recent highlights include:

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Women and minorities comprise 55% ofway to strengthen our Board.

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Ranked No. 6 on Forbes 2018 list of America's Best Employers for Diversity.

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Ranked No. 1 on Forbes 2018 list of America's Best Employers for Women.

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Earned a perfect score on the 2019 Human Rights Campaign Foundation's Corporate Equality Index, scoring the maximum 100 points for the fourth consecutive year.

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Earned the 2018 Military Friendly Employer designation by Victory Media.

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Named one of the 2018 National Association for Female Executives Top Companies for Executive Women, the 17^th time that Principal has been so honored.

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Named one of the 2018 Working Mother 100 Best Companies for Women, the 16^th consecutive year in which Principal has received this award.

Promoting diversity among suppliers:    Just as we value diversity amongbusiness, advance our employees, we value diversity among our suppliers and partners to help create innovative solutionsmission, and build stronger communities. Our Supplier Diversity Program seeks qualified businessesa more inclusive, resilient and sustainable global community. As we continue to help meet currentembed sustainability into our business, we have solidified our strategic pillars and future business needs. Principal is affiliated with a number of supplier diversity organizationshave developed public commitments to provide these connections, including: Women's Business Enterprise National Council, National Minority Supplier Development Council, United States Hispanic Chamber of Commerce, U.S. Pan Asian American Chamber of Commerce, National Gay & Lesbian Chamber of Commerce, National Veteran Owned Business Association, U.S. Business Leadership Network Disability Supplier Diversity Program, and Financial Services Roundtable for Supplier Diversity.measure our progress towards long-term responsible actions.

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Directors' Compensation

Directors serve on the Boards of the Company, Principal Life and Principal Financial Services, Inc. Directors who are also employees do not receive any compensation for their service as Directors. 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.

Due to the economic conditions and other steps taken by the Company to reduce expenses in response to the global coronavirus pandemic, including reducing compensation for employees earning $100,000 or above in base salary, the Board reduced its cash compensation described below by 20%, effective on May 19, 2020. That compensation for employees was reinstated on November 7, 2020 and Board cash compensation was reinstated at the completion of the Board's November 24, 2020 meeting.

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 2018,2020, 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 pages 30-31)32-33), which aligns with its Executive compensation philosophy. As a result of Compensation Advisor Partners November 2020 review and the Committee's discussion, Director compensation did not change effective November 24, 2020 except for the reinstatement of cash compensation to the level that was in place prior to May 19, 2020, as a result of Compensation Advisory Partners November 2018 review because it is generally positioneddescribed above. These changes position Directors at the median of compensation within Principal's Peer Group. It was last changed effective November 27, 2017.

Fees Earned by Non Employee Directors in 2018

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Fees Earned by Non-Employee Directors in 2020

Non-Employee Directors' Deferred Compensation Plan

Non employeeNon-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:

•

Phantomoptions, and each option represents "phantom" units tied to the following:

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The Company's Common Stock;

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The Principal LargeCap S&P 500 Index R5 Fund;Fund (R5 share class);

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The Principal Real Estate Securities R5 Fund;Fund (R5 share class); and

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The Principal Core Plus Bond R5 Fund.Fund (R5 share class).

The returns realized on these funds during 2018 were:2020 were (parenthesized information indicates share class):

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Investment Option	​	1 Year Rate Of Return (12/31/2018)2020)
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Principal Financial Group, Inc. Employer Stock Fund	​	–34.42%5.73%
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Principal LargeCap S&P 500 Index R5 Fund (R5)	​	–4.76%17.85%
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Principal Real Estate Securities R5 Fund (R5)	​	–4.47%3.38%
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Principal Core Plus Bond R5 Fund (R5)	​	–1.94%9.32%
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Restricted Stock Unit Grants

Non-employee Directors receive an annual grant of time-based Restricted Stock Units ("RSUs") under the Principal Financial Group, Inc. 20142020 Directors Stock 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

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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. While the 2014The 2020 Director Stock Plan (which was approved by shareholders) allows some discretion in determining the dollar value of RSUs that may annually be awarded, it imposes a maximum limit of $230,000$330,000 ($500,000 for an Independent Chairman) on the size of the annual award that may be made.

As of December 31, 2018,2020, each non-employee Director had the following aggregate number of outstanding RSUs, including additional RSUs received as the result of dividend equivalents:

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Director Name	​	Total RSUs Outstanding Fiscal Year End 20182020 (Shares)
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Betsy J. BernardJonathan S. Auerbach	​	46,4686,937
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Jocelyn Carter-MillerBetsy J. Bernard	​	48,65310,110
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Michael T. DanJocelyn Carter-Miller	​	39,27561,718
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C. Daniel GelattMichael T. Dan	​	51,74833,776
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Sandra L. HeltonC. Daniel Gelatt, Jr.	​	46,4680
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Roger C. HochschildSandra L. Helton	​	11,53159,311
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Scott M. MillsRoger C. Hochschild	​	7,54320,821
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Diane C. NordinScott M. Mills	​	3,97116,427
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BlairDiane C. PickerellNordin	​	10,29712,492
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Blair C. Pickerell	​	19,461
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Clare S. Richer	​	4,305
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Alfredo Rivera	​	1,535
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Elizabeth E. Tallett	​	51,20864,533
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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 the followingfor three years.years thereafter. Principal Life receives the charitable contribution tax deductions for the matching gifts.

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Directors are reimbursed for travel and other business expenses they incur while performing services for the Company.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. In 20182020 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, 2018,2020 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.

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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 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, 2018,2020, 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, 2019.2021.

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
Betsy J. Bernard
C. Daniel Gelatt
Roger C. HochschildScott M. Mills
Diane C. Nordin
Clare S. Richer
Alfredo Rivera

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Executive Compensation

Contents:	​	Page
Compensation Discussion & Analysis ("CD&A")	​	24
• 2018 Company Performance Highlights	​	25
• 20182020 Company Performance Highlights	​	26
• 2020 Compensation Highlights	​	2527
• Compensation Program Philosophy and Policies	​	2628
• Summary of Compensation Elements	​	2829
• How we make Compensation Decisions	​	29
• 2018 ExecutiveWe Make Compensation Decisions	​	31
• 2020 Executive Compensation Decisions	​	33
• Base Salary	​	3234
• Annual Incentive PayCompensation	​	3334
• Long-term Incentive Compensation	​	3637
• Timing of Stock Option Awards and Other Equity Incentives	​	3738
• Benefits	​	3839
• Change of Control &and Separation Pay	​	3839
• Stock Ownership Guidelines	​	3940
• Claw BackHedging Policy	​	3940
• Repricing Policy	​	40
• Clawback Policy	​	40
• Trading Policy	​	3941
• Succession PlanningGross-Up Policy	​	4041
• Human Resources Committee Report	​	4041
• Risk Assessment of Employee Incentive Plans	​	4041
Compensation Tables	​
• Summary Compensation Table	​	4142
• Grants of Plan BasedPlan-Based Awards Table	​	43
• Outstanding Equity Awards Tablefor Fiscal Year End December 31, 2020	​	44
• Option Exercises and Stock Vesting TableOutstanding Equity Awards at Fiscal Year End December 31, 2020	​	45
• Option Exercises and Stock Vesting	​	46
• 2020 CEO Pay Ratio	​	4546
• Pension Plan Information	​	48
• Pension Distributions	​	50
• Pension Benefits	​	4851
• Non-Qualified Deferred Compensation	​	52
• Qualified 401(k) Plan and Excess Plan	​	52
• Severance Plans	​	53
• Change of Control Employment Agreements	​	54
• Potential Payments Upon Termination Related to a Change of Control	​	5456

Compensation Discussion and Analysis (CD&A)

The CD&A describes Principal Financial Group, Inc.'s Executive compensation objectives and philosophy. It also describes our 20182020 compensation program and reviews the outcomes, including the Company's financial performance in 2018.2020. Our "Named Executive Officers" in 2018 were—2020 were:

•

Daniel J. Houston, Chairman, President and Chief Executive Officer.    Mr. Houston has overall responsibility for all businesses of the organization. He joined the companyCompany in 1984 and assumed his current position in 2015. He previously served as President and Chief Operating Officer, overseeing all of our U.S. and global businesses, and the Retirement and Investor Services and U.S. Insurance Solutions segments of the organization.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 companyCompany in 1990 and assumed her current position in 2017. She previously served as Executive Vice President and President of U. S.U.S. Insurance Solutions with overall accountability for individual life, nonqualifiednon-qualified deferred compensation, individual disability and group benefits.

•

James P. McCaughan, President, Global Asset Management.    Mr. McCaughan was the head of the Principal Global Investors segment of our operations until September 30, 2018.

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Patrick G. Halter, Chief Executive Officer, Principal Global Investors.    Mr. Halter has responsibility for overseeing the operations of Principal Global Investors, its 15 investment boutiques, and the fund and distribution teams. He joined the company in 1984 and assumed his current position in 2018. He previously served as the Chief Operating Officer of Principal Global Investors.

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•

Timothy M. Dunbar,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 fund and distribution teams. Effective November 7, 2020, he was promoted to President, Principal Global Asset Management.    Mr. Dunbar hasManagement and assumed responsibility for overseeing all of Principal's asset management capabilities including Principal Global Investors, Principal International investment operations, the Principal Life Insurance Company General Account and RobustWealth, a recent digital investment advice acquisition of Principal. HeRobustWealth. Mr. Halter joined the companyCompany in 1984.

•

Timothy M. Dunbar, President, Global Asset Management.    Mr. Dunbar was head of the Principal Global Asset Management segment of our operations until November 7, 2020, when he assumed the title of Division President after announcing his intent to retire. Mr. Dunbar joined the Company in 1986 and assumed his current positionretired in 2018. He previously served as the Chief Investment Officer.January 2021.

•

Luis Valdés, President, International Asset Management & Accumulation.    Mr. Valdés is responsible for managing the Company's operations outside of the United States in the international asset management and accumulation segment. He has been associated with the companyCompany since 1995 and assumed his current position in 2011. He previously served as the President of Principal Financial Group Latin America. Mr. Valdés retired in March 2021.

20182020 Company Performance HighlightsHighlights:
:

In 2018,2020, Principal generated $1.5$1.4 billion of net income attributable to Principal Financial Group and a record $1.6$1.4 billion of non-GAAP operating earnings⁽¹⁾, an 8% increase from 2017 on a reported basis..

We deployed $1.4 billion$907 million of capital in 2018, or 90% of net income. We take a balanced and disciplined approach to capital deployment—we returned $1.2 billion of capital2020 to shareholders through common stock dividends and share repurchasesrepurchases. Despite the pressures and uncertainty caused by COVID, we remain in 2018one of our strongest financial positions in history with $2.7 billion of total company available cash and we deployed $140 million through strategic acquisitions, including expansion in Asialiquid assets at year-end. Our investment portfolio is high quality, diversified and a digital advice platform.well-positioned, and our investment strategy hasn't changed.

Over the course of 2018, our assetsAssets under management decreased by $42(AUM) increased $71 billion, or 6 percent,10%, to $627a record $807 billion at year-end, primarily due to unfavorable marketreflecting strong investment performance and foreign currency exchange.$14 billion of net cash flow. Additionally, we ended 2020 with $118 billion of AUM in our China joint venture and $686 billion of assets under administration in the Institutional Retirement and Trust business.

20182020 was anothera challenging year, and we focused on our customers' needs, just as we have throughout our 141-year history. In response to COVID, we waived fees on hardship withdrawals and granted premium concessions to support our customers, all while keeping our employees safe and remaining focused on our long-term objectives.

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(1)

This is a non-GAAP financial measure. See non-GAAP financial measure reconciliations in Appendix C.

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Table of strong execution in a volatile macroeconomic environment. Competitive and macroeconomic challenges remain, but we go forward from a position of strength with strong underlying fundamentals and the benefit of diversification.Contents

Our total shareholder return performance over the past five years was positioned well ahead of our asset manager peers and was slightly behind our insurance peers.

(1)

Our total shareholder return methodology includes the share price return and cash dividends paid during the time period.

period December 31, 2015 through December 31, 2020.

*

Insurance Peers include:include Ameriprise, Lincoln National Corporation, Manulife, Metlife,ManuLife, MetLife, Prudential, Sun Life Financial, Unum, and Voya

**

Voya. As noted on page 32, 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

Price.

20182020 Compensation Highlights

•

In 2018,2020, the Company's shareholders voted to approve the Company's Executive compensation program. Of the votes cast, 96%94% 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.

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(1)•

This isIn March 2020, Mr. Houston's base salary increased from $900,000 to $1,000,000. His annual incentive target remained at 375% and his long-term incentive target remained at 775%. His Principal Financial Group Incentive Pay Plan (PrinPay Plan) payout for 2020 was $2,671,154. The base salary increase was intended to align Mr. Houston's salary with the peer median.

•

Base salaries for Named Executive Officers were reduced in July of 2020 as part of the Company's expense reduction efforts that were undertaken in response to the adverse economic conditions as a non-GAAP financial measure. See non-GAAP financial measure reconciliationsresult of the global pandemic. Mr. Houston's base salary was reduced by 25% and all other Named Executive Officers base salaries were reduced by 20%. Salary levels were reinstated effective November 7, 2020. No Named Executive Officer was compensated for the reduction in Appendix B.base salary.

•

Based on our 2020 annual performance achievements, many of which are outlined above, our 2020 PrinPay score in the annual incentive program was earned at 80% of target and the individual modifiers for our Named Executive Officers ranged between 95% and 105%.

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approval of the compensation program to be approval of the Company's compensation philosophy, which has not changed since that vote.

•

Based on our 2018 annual performance achievements, many of which are outlined above, 2018 Annual incentive payouts for Named Executive Officers averaged 81% of target.

•

Based on the Company's three-year average return on equity ("ROE")⁽²⁾ and three-year average book value per share⁽³⁾ performance, the 2016-2018 PSUs2018-2020 Performance Based RSUs ("PSUs") vested on December 31, 20182020 and 113%44% of the target number of shares were paid out in February 2019,2021, according to the established performance scale, and approval by the Human Resources Committee.

•

Additionally, our new stock plan (as described in Proxy Proposal Four) 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).

Compensation Program Philosophy and Policies

Compensation Philosophy—our compensation programs are designed to:

•

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'spay 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 ofcompensation 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; and

•

Support importantcorporate governance principles and established best practices.

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

ü

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.

ü

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.

ü

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.

ü

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.

ü

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.

ü

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

ü

Market Severance Protection.Executives are eligible for market-based severance protection under the Company's severance plan if they are terminated because of layoffs, position elimination or similar reasons.

   

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(2)

Return on equity ("ROE") is defined as (i) income from continuing operations before income taxes per the audited Consolidated Statements of Operations less net realized/unrealized capital gains (losses) and preferred stock dividends declared during such calendar yearnon-GAAP operating earnings divided by (ii) the average stockholders' equity available to common stockholders excluding accumulated other comprehensive income available to common stockholders.other than foreign currency translation adjustment. See non-GAAP financial measure reconciliations in Appendix C.

(3)

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

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ü

Compensation PoliciesLimited 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. —Principal's Executive compensation program incorporates

ü

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

ü

Tax and Accounting Efficiency.The Committee considers the following best practices:

​	​	​	​	​	​	​	​	​
	​	Independent Consultant	​		​	The Human Resources Committee's independent compensation consultant is selected and retained by the Committee to advise on Executive and Director compensation and does no other work for the Company. The independent compensation consultant to the Human Resources Committee is Compensation Advisory Partners.	​
​	​	​	​	​	​	​	​	​
	​	Risk Review	​		​	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.	​
​	​	​	​	​	​	​	​	​
	​	Emphasis on Variable Compensation:	​		​	Most of our Executive compensation is variable and linked to meeting our short term and long-term financial and strategic goals and to the performance of the Company's stock over time. 92 percent of our CEO's 2018 target compensation and an average of 82% of our other Named Executive Officer's target total compensation are variable and tied to Company performance.	​
​	​	​	​	​	​	​	​	​
	​	Executive Ownership	​		​	Executives receive a significant portion of their compensation in stock, as noted in the chart on page 32, and are required to own a meaningful amount of stock in the Company, both of which contribute to strong alignment of management and shareholder interests.	​
​	​	​	​	​	​	​	​	​
	​	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	​		​	Principal has a compensation recovery policy that applies to Executives. Principal can recover 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 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.	​
​	​	​	​	​	​	​	​	​
	​	Market Severance Protection	​		​	Our change of control agreements with Executives provide market based severance protection and do not provide excise tax gross ups.	​
​	​	​	​	​	​	​	​	​
	​	Limited Perquisites	​		​	We do not provide perquisites to Executives that are not offered to all employees, except one physical examination per year, business spousal travel, and gifts of nominal value given to all sales conference attendees.	​
​	​	​	​	​	​	​	​	​
	​	No Repricing	​		​	We have not repriced underwater stock options and we will not do so without shareholder approval.	​
​	​	​	​	​	​	​	​	​
	​	Tax and Accounting Efficiency	​		​	Our programs are designed, to the extent possible, to be financially efficient from tax, accounting, cash flow and share dilution perspectives.	​
​	​	​	​	​	​	​	​	​
	​	No Gross Ups	​		​	Executives do not receive any income tax gross ups.	​
​	​	​	​	��	​	​	​	​

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Tabletax and accounting consequences of Contentseach element of compensation.

ü

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 20182020 Highlights	​
​	​	​	​	​	​	​	​	​	​	​	​	​
	​	Base Salary	​		​	Provides fixed income based on the size, scope and complexity of the Executive'sNamed Executive Officers' role, Executive's historical performance and relative position compared to market pay information	​		​	In 2018,2020, the Committee increased Executives' base salaries, as detailed on page 32.34. Additionally, as noted on page 27, base salaries for Named Executive Officers were reduced in July of 2020 as part of the Company's expense reduction efforts undertaken in response to the adverse economic conditions resulting from the global pandemic. Mr. Houston's base salary was reduced by 25% and all other Named Executive Officers' base salaries were reduced by 20%. Salary levels were reinstated effective November 7, 2020. No amounts were paid to compensate for the base pay that was foregone during the time period base salaries were reduced.	​
​	​	​	​	​	​	​	​	​	​	​	​	​
	​	Annual Incentive Compensation	​		​	Motivates and rewards annualoverall corporate performanceobjectives as well as the Executive'sNamed Executive Officers' contribution to achieving our annual objectives.	​		​	A range of earnings opportunity, expressed as percentagesa percentage of base salary, and corresponding to three levels of performance (threshold, target and maximum), is established for each Executive.Named Executive Officer. Actual bonuses depend on achievement relative to the key financial measures, corporateindividual employee results and divisional goals,overall Company performance and profitability, as outlined on pages 33-36.34-36. Based on the Committee's assessment of performance, actual bonusesour 2020 PrinPay score in the annual incentive program was earned at 80% of target and the individual modifiers for 2018 averaged 81% of targetour Named Executive Officers ranged between 95% and 105% as detailed on page 36.	​
​	​	​	​	​	​	​	​	​	​	​	​	​

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	​	Compensation Component	​		​	Objective	​		​	Description and 2020 Highlights	​
​	​	​	​	​	​	​	​	​	​	​	​	​
	​	Long-Term Incentive Compensation	​		​	Motivates and rewards long termlong-term corporate performance as well as the Executive'sNamed Executive Officers' contribution to achieving our long-term objectives. Reinforces the link between the interests of the ExecutivesNamed Executive Officers and shareholders. Encourages retention.	​		​	Each year, the Committee establishes the long-term award opportunity for each Named Executive Officer. One half of the award is granted in stock options and the other half in PSUs. Using equal amounts of PSUs and options creates a balance between achieving operating performance objectives and increases in shareholder value. Stock Options are 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 PSUs vestvalue to participants varies based on continued service (except for retirees, when they vest over time)the degree of achievement against those goals. PSUs Typically have a 3-year performance period and meeting financial objectives over a three year period (with each three year period treated as a "Performance Cycle"). The PSUs granted in 2017 for the 2017-2019are measured on 50% average ROE and in 2018 for the 2018-2020 Performance Cycles will vest based on performance scales for three-year average Return on Equity (ROE) and50% Pre-Tax Return on Net Revenue, each weighted 50% overRevenue. The ROE portion of the performance period. Payout on the ROE metricaward is modified based on three yearalso subject to a Book Value per Share versus certain threshold goals.share threshold. The performance period for the 2020-2022 PSU was modified to two years due to an accounting change for publicly traded companies 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 Performance Cycle, PSUs will continue to vest at the end of the three-year Performance Cycle. Details of the program are outlined on pages 36-38.37-38. The PSUs granted in 20162018 for the 2016-20182018-2020 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 yearthree-year Book Value per Share versus certain threshold goals. For the 2016-20182018-2020 Performance Cycle, the awards vested and paid out at 113%44% of the target number of PSUs based on our ROE performance of 13.8%12.5%, Pre-Tax Return on Net Revenue of 32.1%29.3%, and Book Value per Share of $42.71.$49.11.	​
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	​	Compensation Component	​		​	Objective	​		​	Description and 20182020 Highlights	​
​	​	​	​	​	​	​	​	​	​	​	​	​
	​	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. basedU.S.-based employees, including health, life, disability income, vision and dental insurance, an employee stock purchase plan, 401(k) plan and pension plan. ExecutivesCertain of the Named Executive Officers also participate in non- qualifiednon-qualified retirement plans (defined benefit and defined contribution). Mr. Halter does not, and Mr. McCaughan did not participate in the pension or non- qualified retirement plans. Mr. Dunbar participated in the pension and non-qualified plans prior to 2010, when changes were made to eliminate these programs for investment professionals. Mr. Dunbar participated in the pension and non-qualified retirement plans for periods after 2010 when he was working in non-investment roles.roles that were eligible for these plans.	​
​	​	​	​	​	​	​	​	​	​	​	​	​
	​	Perquisites	​		​	Modest additional benefits to help attract and retain Executive talent and enable ExecutivesNamed Executive Officers to focus on Company business with minimal disruption.	​		​	ExecutivesNamed 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 interested 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 an Executive'sa Named Executive Officer's involuntary termination of employment, and, in the case of a change of control;control, helps ensure the continuity of management through the transition.	​		​	Refer to pages 38-39page 39 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; and

•

Approves changes to the Executive's total compensation package.compensation.

Compensation Advisory Partners advisesis selected and retained by the Committee to advise on the Executive compensation program andprogram. Compensation Advisory Partners also advises the Nominating and Governance Committee on compensation for non employeenon-employee Directors (see pages 21-23)21-24). 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.

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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 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.

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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 ExecutivesNamed 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. A review of executive compensation was conducted in 2018.2020. The comprehensive study of Executive Compensationcompensation conducted by the Committee's compensation consultant reviews all aspects of the design and structure of the Company's total Executive compensation program, and includes:

•

Interviews with Executives and Directors to discuss business strategy and the implications for human resources and compensation policy;

•

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 review of Executive compensation plans against potential risks. Compensation Advisory Partners conducted a review of the Company's Executive compensation plans in 2018,2020 and determined that the Company's Executive compensation programs are well designed, support the Company's business strategy, and do not provide incentives to Executives to take inappropriate risks.

The compensation consultant:

•

Attended sevennine meetings of the Committee in 2018,2020, 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 reviewsdetermines 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 20182020 as part of theour typical compensation review and Eaton Vance and Legg Mason were removed as they are smaller relative to PrincipalEquitable Holdings was added based on the size of its revenue, market capitalization, and/or operating income. Unum Group was added because it is only slightly smaller than Principalassets under management,

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and itoperating profit relative to Principal. Equitable Holdings also has similar business lines. The companies inpeer group included the Peer Group used in Compensation Advisory Partners' 2018 analysis to assist in decisions on 2019 compensation were:following companies:

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

The Committee also uses annual data from third party industry surveys for its compensation decisions.decisions⁽⁴⁾.

Our Executives participate in the same broad-based employee benefit programs as other employees. Every two to three years, the Company's non cashnon-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, those of more than 100 diversified financial services companies. This is a larger group than the Peer Group because the information is used for our broad based employee benefit programs. Benefit programs are also compared against those ofincluding several local employers in Des Moines, Iowa as the Company has a significant employee population there.employers.

Each year, the Committee reviews the total compensation paid to the ExecutivesNamed 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 versus the compensation opportunities established by the Committee, and itCommittee. The information also is also used in making compensation and compensation plan design decisions.

20182020 Executive Compensation Decisions

In general, Principal's pay philosophy is to target the market median of the Peer Group for executive'san 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 AB 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 other Executives;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. For taxable years through 2017, the Committee tried to maximizeFollowing changes in the tax deductibility tolaws in 2017, Principal of compensation under available exceptions to the application of Section 162(m) of the Internal Revenue Code ("Tax Code"), while simultaneously providing competitive compensation that enhanced our business objectives. This Tax Code section limits Principal from deductinggenerally cannot deduct annual compensation exceedingpaid to certain covered employees in excess of $1 million for our CEO and other persons who either are or beginning in 2018, were requiredeach such employee, subject to be named in our public company disclosure for any year after 2017 ("Covered Employees"). For taxable years prior to 2018, there was an exception to this 162(m) limitation for performance based compensation meeting certain criteria, but this exception has generally been repealed for taxable years after 2017 (subject to certain limited grandfathering of compensation payable pursuant to binding written agreements outstanding on November 2, 2017). Thegrandfathered arrangements. While the Committee considers the impacttax consequences of this changecompensation decisions, the Committee's primary focus is designing competitive and effective compensation programs. Accordingly, these and other factors often result in the applicable federal income tax laws as it makes and implements decisions regarding compensation opportunities that will not be fully tax deductible.

   

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(4)

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.B.

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payable after 2017. Tax deductibility affectsThe charts below show the net cost of the compensation payable by Principal to Covered Employees, and is one factor to be considered in designing competitive and effective compensation programs. Other factors, such as the need to provide our senior executives compensation that is competitive with that payable in the marketplace, that retains their services and that provides appropriate incentives to achieve our business plans and objectives, may cause the Committee to continue to provide compensation opportunities that are generally consistent with those previously provided, despite the probability that at least some of the compensation payable to some or all of the Covered Employees will not be tax deductible after 2017.

The chart below shows the 20182020 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, as reflected inlinked to meeting our short-term and long-term financial and strategic goals and to the chart below.performance of the Company's stock over time.

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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 2020 salary increases for Mr. Houston and Ms. Strable Soethout were made to align them with the median salary levels among our peer companies.

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	​	Named Executive Officer	​		​	2016		​		​	2017		​		​	2018		​		​	Percent Increase 2017 to 2018		​		​	Named Executive Officer	​		​	2018		​		​	2019		​		​	2020		​		​	Percent Increase 2019 to 2020		​
​	​	​	​	​	​	​		​	​	​	​		​	​	​	​		​	​	​	​		​	​	​	​	​	​	​	​		​	​	​	​		​	​	​	​		​	​	​	​		​	​
​	​	Houston	​	​	​	$	800,000	​	​	​	$	900,000	​	​	​	$	900,000	​	​	​	0.0%		​	​	​	Houston	​	​	​	$	900,000	​	​	​	$	900,000	​	​	​	$	1,000,000	​	​	​	11.1%		​	​
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	​	Strable-Soethout	​		​	$	535,000	​		​	$	562,000	​		​	$	595,500	​		​	6.0%		​		​	Strable-Soethout	​		​	$	595,000	​		​	$	595,000	​		​	$	645,000	​		​	8.3%		​
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​	​	Dunbar(2)	​	​	​	$	492,000	​	​	​	$	507,000	​	​	​	$	600,000	​	​	​	18.3%		​	​	​	Dunbar	​	​	​	$	600,000	​	​	​	$	600,000	​	​	​	$	600,000	​	​	​	0%		​	​
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	​	Halter	​		​			​		​			​		​	$	575,000	​		​			​		​	Halter	​		​	$	575,000	​		​	$	575,000	​		​	$	575,000	​		​	0%		​
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​	​	McCaughan	​	​	​	$	666,000	​	​	​	$	679,500	​	​	​	$	693,000	​	​	​	2.0%		​	​	​	Valdés	​	​	​	$	615,500	​	​	​	$	615,500	​	​	​	$	615,500	​	​	​	0%		​	​
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	​	Valdés	​		​	$	591,500	​		​	$	603,500	​		​	$	615,500	​		​	2.0%		​
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(1)

Salaries displayed in the table are as of December 31 of the 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.

(2)

Mr. Dunbar's percentage increase is due to a promotion in September 2018. The percent increase is based on his salary at time of promotion.

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​ 32        2019 Proxy Statement	​ ​	​	​ ​	​

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Annual Incentive Compensation

From 2004 through 2018, Named Executive Officers earned annual cash bonuses under the Principal Financial Group, Inc. Annual Incentive Plan. This plan was approved by shareholders in 2004, and, as adopted was designed to comply with the performance based exception to Section162(m) of the Tax Code, such that these incentives payable to Named Executive Officers could be tax deductible to the Company. As previously noted, the performance-based exception to Section 162(m) has been repealed with respect to taxable years starting in 2018. Accordingly, incentives paid under the Annual Incentive Plan will not be deductible to the extent paid to Covered Employees subject to the limitations contained in Section 162(m) whose aggregate compensation, inclusive of such incentives, exceed $1 million.

The maximum aggregate bonus amount available under the Annual Incentive Plan for any calendar year for the Named Executive Officers is 2% of annual operating income for that year ("Bonus Pool"). For 2018, the maximum bonuses were:

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	​	Named Executive Officer	​		​	Maximum Award as Percentage of the Annual Incentive Pool	​		​	Maximum Potential Award Payment	​
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​	​	CEO (Houston)	​	​	​	35%	​	​	​	$13.0 million	​	​
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	​	Second highest Paid Covered Employee (McCaughan)	​		​	25%	​		​	$9.3 million	​
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​	​	Third highest Paid Covered Employee (Halter)	​	​	​	20%	​	​	​	$7.4 million	​	​
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	​	Fourth highest Paid Covered Employee (Valdés)	​		​	10%	​		​	$3.7 million	​
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​	​	CFO (Strable-Soethout)	​	​	​	10%	​	​	​	$3.7 million	​	​
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The Committee sets the target and maximum annual incentive awards for each Named Executive Officer. The Committee may use its negative discretion to reduce the awards actually payable. After this reduction, maximum annual incentive opportunities are generally 200% of the target annual incentive opportunity. The Committee approved the following target awards for Named Executive Officers in each of the past three years:

Annual Incentive Targets (as a percentage of base salary)

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	​	Named Executive Officer	​		​	2016				​		​	2017				​		​	2018		​
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​	​	Houston	​	​	​	​	350		%	​	​	​	​	350		%	​	​	​	350%		​	​
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	​	Strable-Soethout	​		​	​	100		%	​		​	​	150		%	​		​	150%		​
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​	​	Dunbar(1)	​	​	​	​	80		%	​	​	​	​	80		%	​	​	​	400%		​	​
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	​	Halter(2)	​		​	​			​	​		​	​			​	​		​	350%		​
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​	​	McCaughan	​	​	​	​	300		%	​	​	​	​	400		%	​	​	​	400%		​	​
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	​	Valdés	​		​	​	75		%	​		​	​	100		%	​		​	100%		​
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(1)

As of September 15, 2018, recognizing Mr. Dunbar's promotion to President, Principal Global Asset Management, his annual incentive increased from 80% to 400%

(2)

As of September 15, 2018, recognizing Mr. Halter's promotion to CEO & President—PGI, his annual incentive increased from 325% to 350%.

In establishing the target award opportunity for Messrs. Houston, McCaughan, Dunbar, Halter and Valdés and Ms. Strable-Soethout, the Committee considered the median incentive targets for comparable executive positions in the Peer Group companies, as well as the survey data referenced above. The target award opportunity for Mr. McCaughan, Mr. Dunbar and Mr. Halter has increased consistent with market practice for award opportunities for senior executives in asset management, which are higher than target annual incentive opportunities in other industries.

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​	​ ​	​	​ ​	​ 2019 Proxy Statement        33

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Table of Contents

The Annual Incentive Plan terminated on December 31, 2018, and going forward, Named Executive Officers will participate in the Principal Financial Group Incentive PayPrinPay Plan, (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. Annual financial and non-financial goals for company performance and individual performance are set. After establishing the company score, an employee's individual goal performance is usedassessed to determine the individual score an employee receives.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.

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​ 34        2021 Proxy Statement	​ ​	​	​ ​	​

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Table of Contents

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	​		​	2020				​
​	​	​	​	​	​	​				​	​
​	​	Houston	​	​	​	​	375		%	​	​
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	​	Strable-Soethout	​		​	​	175		%	​
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​	​	Dunbar	​	​	​	​	400		%	​	​
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	​	Halter(1)	​		​	​	358		%	​
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​	​	Valdés	​	​	​	​	110		%	​	​
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(1)

Mr. Halter's pro-rated target for 2020 was 358% (350% for January 1, 2020 through November 6, 2020 and 400% for November 7, 2020 through December 31, 2020).

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

Performance Goal Setting and Annual Measurement Process

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 Human Resources 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 endyear-end financial results. All employees develop individual performance goals with their leaders that support the Company's goals.

TheFinal Annual Incentive Pay Award Determination

In determining final awards for PrinPay participants, the Committee reviewed 2018 performance on key financial measures and corporate and divisional goalsuses the following approach:

Step 1: Review Operating Earnings results versus Plan to determine the 2018 annual bonus for the Named Executive Officers under the Annual Incentive Plan. The Committee does not use any particular weighting for these goals; these measures are used as guideposts when the Committee exercises its discretion in its subjective evaluation of these factors. In determining corporate performance for 2018, the Committee reviewed Company achievements on these key financial goals:

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​ 34        2019 Proxy Statement	​ ​	​	​ ​	​

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Achieve appropriate Non-GAAP Operating Earnings and earnings per share.

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Capital—Ensure sufficient capital and liquidity to maintain strong financial strength ratings relative to peers and to be able to execute upon our strategy.

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All capital and liquidity measures are within target ranges.

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Investments—Take actions to invest in optimal assets on a risk-adjusted basis. Acquire assets during the year in alignment with the Tactical Asset Allocation.

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Achieved a 17 basis point spread on acquired assets, above the target range. 2018 bond and commercial mortgage loan credit losses were $28.2M, below the estimated ranges.

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Minimize credit loss.

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Total Company Revenue/Net Revenue

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Mr. Houston and Ms. Strable-Soethout had goals for total company revenue and net revenue. The Company had total revenue(2) of $14,425M against a goal of $14,440M and net revenue(2) of $6,093M relative to a goal of $6,045M. In addition, Mr. Valdés had Net Revenue goals specific to the business units they oversee, and Mr. McCaughan and Mr. Halter had an Operating Revenue less Pass-Through Commissions goal for Principal Global Investors:

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The Company's risk management program remains effective and integrated, and our risk culture is sound. For example, we retained our "strong" ERM rating with Standard & Poors.

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(1)

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	​	Threshold	​	Target	​	Maximum	​	Actual 2020 Performance
​	​	​	​	​	​	​	​	​
Operating Earnings ($Mil.)	​	$1,253	​	$1,670	​	$2,088	​	$1,480
​	​	​	​	​	​	​	​	​
Payout	​	50%	​	100%	​	200%	​	77%
​	​	​	​	​	​	​	​	​

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.)

In addition to reviewing the financial performance for 2020, the Committee exercised its discretion to make an incremental adjustment to the final funding of the PrinPay for all participants from 77% to 80% of target in recognition of the Company's effective response to the COVID-19 pandemic and positive results of the Balanced Scorecard.

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 non-GAAP financial measure. See non-GAAP financial measure reconciliations in Appendix B.