SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: FEBRUARY 3, 2006
(Date of earliest event reported)
PRINCIPAL FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-16725 42-1520346
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification Number)
711 HIGH STREET, DES MOINES, IOWA 50392
(Address of principal executive offices)
(515) 247-5111
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 3, 2006, the Audit Committee of the Board of Directors of Principal
Financial Group, Inc. (the "Company") approved unaudited earnings information
for the Company's quarter ended December 31, 2005. This approval made effective
an earlier decision by the Human Resources Committee (the "Committee") of the
Board of Directors approving awards under the Company's Long-Term Performance
Plan. The Company's Long-Term Performance Plan affords eligible executives,
including the chief executive officer and four other most highly compensated
executive officers (the "Named Executive Officers"), the opportunity to share in
the success of the Company if the Company achieves specified performance
objectives over periods of three calendar years. The last three-year cycle under
the Long-Term Performance Plan ended on December 31, 2005. On February 3, 2006,
upon Audit Committee approval of unaudited quarterly earnings information, the
Committee authorized payments to the Company's executive officers and other
senior officers under the Long-Term Performance Plan for the three-year
performance period ended on December 31, 2005.
For the 2003 - 2005 performance period under the Long-Term Performance Plan, the
Committee used two metrics: cumulative operating earnings for the three-year
period, and return on average equity for the third year of the performance
period. The target set for operating earnings performance was the sum of the
individual years' targets for operating earnings. The target set for year-three
return on average equity was based on goals agreed to by the Board and
management for long-term growth and creation of long-term shareholder value.
In reviewing the performance of the Company and approving awards for the
three-year performance period ended December 31, 2005, the Committee determined
that the Company exceeded its financial performance goals regarding target
levels of operating earnings and the year-three average return on equity and
obtained a score of 141.7%. This determination of financial performance affected
all participants.
The following table sets forth the long-term incentive payouts to be made to the
Company's Named Executive Officers in respect of the 2003 - 2005 performance
period, payable in March 2006, except that payment of Mr. Griswell's award will
be deferred in accordance with his previous election to defer receipt of any
payment for this performance cycle of the Long-Term Performance Plan:
NAME PERFORMANCE PERIOD LONG-TERM
INCENTIVE PAYOUT
J. Barry Griswell 2003-2005 $ 2,616,633
Chairman and Chief Executive Officer
John E. Aschenbrenner 2003-2005 649,108
President - Insurance and Financial
Services
Michael H. Gersie 2003-2005 481,475
Executive Vice President and Chief
Financial Officer
James P. McCaughan 2003-2005 726,870
President - Global Asset Management
Larry D. Zimpleman 2003-2005 651,265
President - Retirement and Investor
Services
The Company intends to provide additional information regarding the compensation
awarded to the Named Executive Officers with respect to and during the year
ended December 31, 2005, in the proxy statement for the Company's 2006 annual
meeting of shareholders, which is expected to be filed with the Securities and
Exchange Commission in March of this year.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRINCIPAL FINANCIAL GROUP, INC.
By: /S/ JOYCE N. HOFFMAN
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Name: Joyce N. Hoffman
Title: Senior Vice President and Corporate
Secretary
Date: February 9, 2006
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