DEF: T. Rowe Price Reports Solid 2025 Performance, Outlines 2026 Proxy Proposals

Sentiment:

Proxy Statement 17 March 2026 6:16 AM

T. Rowe Price Group, Inc. announces solid 2025 financial and investment performance, including $1.78 trillion in AUM and $6.6 billion in advisory revenues, while detailing proposals for its 2026 Annual Meeting of Stockholders.

Summary

Assets under management (AUM) reached $1.78 trillion on December 31, 2025, representing an 8.8% increase from 2024.
Average AUM in 2025 was $1.68 trillion, leading to investment advisory revenues of over $6.6 billion, a 3.2% increase from 2024.
Total net revenue for 2025 was $7.3 billion, up 3.1% from 2024.
Net income attributable to T. Rowe Price Group, Inc. was $2,087.1 million for 2025, with diluted earnings per share of $84.14.
The company returned $1,768.0 million to stockholders in 2025, including $624.6 million through share repurchases, and increased its annual recurring dividend for the 39th consecutive year by 2.4%.
Investment performance was solid across most asset classes, with 56%, 46%, and 61% of U.S. mutual funds outperforming their comparable Morningstar median over the 3-, 5-, and 10-year periods ended December 31, 2025, respectively.
The Board of Directors recommends stockholders vote for the election of 13 directors, approve the compensation paid to Named Executive Officers (NEOs) by a nonbinding advisory vote, and ratify the appointment of KPMG LLP as the independent registered public accounting firm for 2026.
CEO Robert W. Sharps' total compensation decreased by $2.1 million from 2024 to $17.2 million in 2025, reflecting a lower annual bonus and long-term equity award value consistent with company financial performance.
Employee headcount decreased by 4.7% from 8,158 associates at the end of 2024 to 7,773 associates at the end of 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive report, highlighting strong financial growth and consistent shareholder returns, though some investment performance metrics and organic growth were below internal targets, indicating areas for continued focus.

Positives

AUM increased 10.5% to $1.78 trillion as of December 31, 2025.
Investment advisory revenues grew 3.2% to over $6.6 billion in 2025.
Total net revenue increased 3.1% to $7.3 billion in 2025.
Returned $1.8 billion to stockholders in 2025, including $624.6 million through share repurchases.
Increased annual recurring dividend for the 39th consecutive year by 2.4%.
Solid investment performance across most asset classes, with 56%, 46%, and 61% of U.S. mutual funds outperforming Morningstar median over 3-, 5-, and 10-year periods, respectively.
Strong balance sheet with $10.9 billion of stockholders' equity and $3.8 billion of cash and discretionary investments as of December 31, 2025.
Progress in strategic initiatives, including growth in the active ETF business and new product launches.
Successful execution of expense savings to control costs and manage corporate spend on strategic initiatives.
Advanced technology modernization program, improving production stability and efficiency across the firm.
Maintained low voluntary turnover among investment professionals and across the business.
Opened a new global headquarters purposefully designed to foster collaboration.
Set a target to achieve net zero Scope 1 and 2 emissions by 2050, with an interim target of reducing emissions by 50% by 2030 compared to a 2025 baseline.
More than 60% of the real estate portfolio has achieved environmental certification, including LEED Platinum for the Baltimore headquarters.

Negatives

CEO Robert W. Sharps' total compensation decreased by $2.1 million from 2024 to $17.2 million in 2025, reflecting a lower annual bonus and long-term equity award value.
Annual compensation for other Named Executive Officers (Ms. Dardis and Mr. Veiel) also decreased in 2025.
Investment performance for Global Equity and Multi-Asset was mixed versus peers and benchmarks over the 1-, 3-, and 5-year periods.
Relative Organic Growth Rate was below expected at (3.5)% compared to a target of greater than market rate of growth at (2.7)%.
Employee headcount decreased by 4.7% from 8,158 in 2024 to 7,773 in 2025.

Risks

Information technology and cybersecurity risks.
Business continuity and disaster recovery risks.
Environmental, social, and governance risks.
Employee relations risks.
Legal and compliance risks.
Risks related to Board succession.
Risks concerning political expenditures and political activities.
Risks related to sustainability.
Risks associated with managing short-term results to achieve predetermined formulaic outcomes.
Risks that compensation policies and practices could create incentives for unnecessary or excessive risk-taking.

Future Outlook

The company's multiyear strategic objectives include delivering investment excellence, innovating investment capabilities to meet client needs, globalizing and growing the client base, attracting and developing excellent and diverse talent, delivering world-class client service, and leveraging data and technology for innovation and operational excellence. The company has set a target to achieve net zero Scope 1 and 2 emissions by 2050, with an interim target of reducing emissions by 50% by 2030 compared to a 2025 baseline.

Management Comments

"As investors, we remained focused on our strategic investing approach and delivering alpha for clients through active management."
"Our investment performance was solid across most asset classes."
"Our overall financial condition remains strong, as we finished 2025 with $10.9 billion of stockholders equity attributable to T. Rowe Price and $3.8 billion of cash and discretionary investments."
"Our strong balance sheet and operating results enabled us to return $1.8 billion, or 85%, of the net income attributable to T. Rowe Price for 2025 to stockholders through dividends and share repurchases."
"We believe Mr. Sharps service as the chair provides our independent directors with increased exposure to senior management, as well as greater insight into the needs of the business."
"The combined role of chair and CEO reflects the Boards confidence in the leadership of Mr. Sharps and also ensures that the Company presents its strategy to clients, employees, and stockholders with a unified voice from the person most knowledgeable about, and responsible for, the implementation of the Companys strategy."
"At T. Rowe Price, our people are our greatest asset."
"Our culture of collaboration and inclusion enables us to identify and challenge our best ideas to arrive at well-informed decisions for our clients."
"We believe NEO compensation should be straightforward, goal oriented, transparent, longer-term focused, and consistent with stockholder interests."
"The Compensation Committee believes that thoughtful consideration of qualitative performance is a critical feature of the Companys executive compensation program."

Industry Context

StockSavvy.ai notes that T. Rowe Price's focus on active management and delivering alpha aligns with a segment of the asset management industry that emphasizes differentiated returns over passive strategies. The growth in AUM and revenues, despite a slight decrease in employee count, suggests efficiency gains or a strategic shift in resource allocation within a competitive landscape. The expansion into ETFs, SMAs, and alternative strategies, along with strategic partnerships (e.g., Goldman Sachs, Aspida), indicates a proactive approach to diversifying product offerings and distribution channels to meet evolving client preferences and compete with both traditional and alternative asset managers. The company's commitment to sustainability targets (net zero by 2050) also positions it within a growing industry trend towards ESG integration.

Comparison to Industry Standards

56%, 46%, and 61% of U.S. mutual funds (primary share class only) outperformed their comparable Morningstar median over the 3-, 5-, and 10-year periods ended December 31, 2025, respectively.
48% of rated U.S. mutual funds received an overall rating of 4 or 5 stars, compared to 32.5% of Morningstar's fund population.
60% of AUM in rated U.S. mutual funds ended 2025 with an overall rating of 4 or 5 stars.
The operating margin of 36.8% in 2025 exceeded the CEO's target of 31.4%.
Relative Investment Performance was below expected at 43.9% exceeding target of 55.0%.
Relative Organic Growth Rate was below expected at (3.5)% compared to a target of greater than market rate of growth at (2.7)%.
CEO Robert W. Sharps' 2025 annual total compensation of $17,245,792 was 101 times that of the median associate's $170,274.
The peer group for executive compensation includes Affiliated Managers Group, Inc., AllianceBernstein L.P., BlackRock, Inc., Charles Schwab Corporation, Franklin Resources, Inc., Invesco Ltd., Northern Trust, and TIAA (though TIAA ceased publishing compensation data). For CEO-specific comparisons, J.P. Morgan Asset Management, Morgan Stanley Asset Management, and Goldman Sachs Asset Management are also considered.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Independent Director	N/A	Allan C. Golston	October 2025	Appointed due to impending director retirements and to enhance Board capabilities with significant financial reporting and operational experience.
Independent Director	N/A	Richard R. Verma	October 2025	Appointed due to impending director retirements and to enhance Board capabilities with substantial experience in foreign and legislative affairs, and prior knowledge of the company.
Director	N/A	Mark S. Bartlett	N/A	Granted an exception from the mandatory retirement age to maintain Board continuity during the required rotation of the audit partner at KPMG and to leverage his institutional knowledge and experience.
Chair of the Board	N/A	Robert W. Sharps	May 2024	Appointed in addition to his role as CEO and President, reflecting Board confidence and ensuring a unified strategic voice for the company.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment

Related Party Transactions

The company completed the acquisition of Oak Hill Advisors, L.P. (OHA) on December 29, 2021, for approximately $3.3 billion, with 74% payable in cash and 26% in shares of the company's common stock.
An Earnout Payment of up to an aggregate of $900 million is potentially payable to OHA Sellers (including Glenn R. August, a director and executive officer) if the OHA business generates revenues exceeding preset targets during the period from January 1, 2022, through December 31, 2026.
A Value Creation Agreement provides that certain OHA employees, including Mr. August, will receive incentive payments equal to 10% of the appreciation in value of the OHA business between the acquisition closing date and the Value Creation Date (fifth anniversary of closing), with 75% paid in cash and 25% in company common stock.
Members of the Management Committee, including executive officers, have the opportunity to invest their own capital in OHA funds without being subject to management fees, incentive fees/allocations, and standard minimum investments.
As of December 31, 2025, executive officers have committed or invested the following gross amounts in OHA funds: Robert W. Sharps ($7,200,000), Mr. Nelson ($1,000,000), Mr. Oestreicher ($912,500), Sbastien Page ($262,500), Eric L. Veiel ($3,250,000), Jennifer B. Dardis ($512,500), Ms. Sawyer ($1,200,000), and Ms. Swanenburg ($500,000).
Directors, executive officers, employees, members of their immediate families, and associated entities may have investments in company-sponsored investment vehicles or accounts or utilize company products/services in the ordinary course of business on substantially the same terms as unaffiliated third parties.

Stakeholder Impact

Shareholders: Positive impact from increased AUM, revenue growth, consistent dividend increases (39th consecutive year), and share repurchases. Potential for future returns from strategic initiatives and OHA earnout/value creation. Governance structure aims to align interests.
Employees: Decreased headcount (4.7%) in 2025. Company emphasizes investing in associate experience, training, development, competitive benefits, and an inclusive work environment. Low voluntary turnover suggests positive employee sentiment despite headcount reduction.
Clients: Focus on delivering investment excellence, innovating capabilities, and world-class client service. Strong investment performance in many funds aims to benefit clients. Diversification of product offerings (ETFs, SMAs, alternatives) caters to evolving client needs.
Suppliers/Business Constituents: Company engages with outside advisors (legal counsel, consultants, financial analysts, investment bankers) for risk understanding. Strategic partnerships (e.g., Goldman Sachs, Aspida) indicate collaboration.
Creditors: Strong financial condition with ample liquidity and substantial cash reserves ($3.8 billion) and stockholders' equity ($10.9 billion) provides security.
Communities: Commitment to sustainability targets (net zero by 2050, LEED Platinum HQ) and T. Rowe Price Foundation matching charitable gifts.

Next Steps

Stockholders to vote on the election of 13 director nominees at the Annual Meeting on May 7, 2026.
Stockholders to cast an advisory vote on the compensation paid to Named Executive Officers at the Annual Meeting.
Stockholders to vote on the ratification of KPMG LLP as the independent registered public accounting firm for 2026 at the Annual Meeting.
The company will continue to refine and execute its corporate strategy to position itself as a leading provider of investment solutions.
The company plans to continue investing in its infrastructure and modernizing technology to reduce risks, costs, and constraints.
The company will continue efforts to attract, develop, and retain diverse top talent.
The company will continue to engage with stockholders in 2026 to understand their views on various corporate governance topics.
The company will continue to address emissions from business travel by investing in high-quality carbon credits and allowances.
The Nominating and Corporate Governance Committee will conduct a thorough review of all Board leadership positions at least every five years to make recommendations about potential changes and needed skills.

Key Dates

Date	Description
1972	Mark S. Bartlett began his career at Ernst & Young.
1981	Eileen P. Rominger began her career at Oppenheimer Capital.
1983	William P. Donnelly was an auditor with PricewaterhouseCoopers LLP.
1986	T. Rowe Price Group, Inc. 1986 Employee Stock Purchase Plan (ESPP) established.
1987	Glenn R. August co-founded the predecessor investment firm to OHA.
1989	Allan C. Golston served as an auditor with KPMG.
1990	Glenn R. August took responsibility for OHA's credit and distressed investment activities.
1993	William P. Donnelly served in various senior financial roles, including CFO, of Elsag Bailey Process Automation, NV.
1995	Lancaster Financial Holdings acquired by TDBFG; Robert W. Sharps left KPMG to pursue MBA.
1997	Robert W. Sharps joined Price Group as an analyst; William P. Donnelly served as Mettler-Toledo's chief financial officer.
1998	Dina Dublon became Executive Vice President and Chief Financial Officer of JPMorgan Chase & Co.
1999	Sandra S. Wijnberg was interim Chief Financial Officer of YUM! Brands, Inc.
2000	Sandra S. Wijnberg became Chief Financial Officer of Marsh & McLennan Companies, Inc.; Allan C. Golston became Chief Financial and Administrative Officer at the Gates Foundation.
2001	Robert W. Sharps became lead portfolio manager of the Institutional Large-Cap Growth Equity Strategy; KPMG first appointed as independent registered public accounting firm.
2002	Target Date inception for T. Rowe Price.
2003	Robert F. MacLellan became Chief Investment Officer of TD Bank Financial Group.
2004	Dina Dublon left JPMorgan Chase & Co.; Robert J. Stevens became Chief Executive Officer of Lockheed Martin Corporation; Lead independent director role created.
2005	Robert J. Stevens became Chairman, President, and Chief Executive Officer of Lockheed Martin Corporation; Allan C. Golston became interim Executive Director of the Global Health Program at the Gates Foundation; Base salaries for NEOs capped at $350,000.
2006	Allan C. Golston became President of the United States Program at the Gates Foundation.
2007	Sandra S. Wijnberg became Partner and Chief Administrative Officer at Aquiline Holdings LLC.
2008	Eileen P. Rominger became Global Chief Investment Officer at Goldman Sachs Asset Management; Alan D. Wilson became Chairman, President, and Chief Executive Officer of McCormick & Company, Inc.
2009	Richard R. Verma became Assistant Secretary of State for Legislative Affairs.
2010	Robert F. MacLellan became an independent director of Price Group.
2011	Eileen P. Rominger became Director of the Division of Investment Management at the Securities and Exchange Commission (SEC).
2012	Mark S. Bartlett left Ernst & Young; Robert J. Stevens left Lockheed Martin Corporation.
2013	Mark S. Bartlett became an independent director of Price Group; Eileen P. Rominger became Senior Advisor to CamberView Partners, LLC.
2014	Richard R. Verma became United States Ambassador to India.
2015	Alan D. Wilson became an independent director of Price Group; Mark S. Bartlett and Robert F. MacLellan became chairs of the Audit Committee and the Compensation Committee, respectively.
2016	Robert W. Sharps stepped down from portfolio management to assume an investment leadership position as co-head of Global Equity; Sandra S. Wijnberg became an independent director of Price Group.
2017	Robert W. Sharps became Head of Investments and Group Chief Investment Officer.
2018	William P. Donnelly retired from Mettler-Toledo International Inc.; Alan D. Wilson was elected by independent directors as lead independent director.
2019	Dina Dublon and Robert J. Stevens became independent directors of Price Group.
2020	Richard R. Verma became General Counsel and Head of Global Public Policy at Mastercard Incorporated.
2021	Glenn R. August and Eileen P. Rominger became independent directors of Price Group; Robert W. Sharps became President of Price Group; Acquisition of OHA completed on December 29, 2021.
2022	Robert W. Sharps became Chief Executive Officer of Price Group; Mentorship programs formally launched.
2023	William P. Donnelly and Cynthia F. Smith became independent directors of Price Group; Richard R. Verma became Deputy Secretary of State for Management and Resources.
2024	Robert W. Sharps became Chair of the Board; Eileen P. Rominger became chair of the Nominating and Corporate Governance Committee; 2024 Sustainability Report published.
2025-01-01	Start of fiscal year 2025.
2025-10	Allan C. Golston and Richard R. Verma were added as new independent directors to the Board.
2025-12-31	End of fiscal year 2025; Company employed 7,773 associates; AUM was $1.78 trillion; Investment advisory revenues over $6.6 billion; Net income attributable to T. Rowe Price Group, Inc. was $2,087.1 million; Diluted EPS was $84.14; CEO Robert W. Sharps' total compensation was $17,245,792; Median associate's total compensation was $170,274.
2026-02	Audit Committee reappointed KPMG as independent registered public accounting firm for 2026; Compensation Committee certified performance for performance-based RSUs granted in 2022.
2026-02-13	Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC.
2026-02-20	Record Date for stockholders entitled to attend and vote at the Annual Meeting.
2026-03-17	Notice of Internet Availability of Proxy Materials mailed to stockholders.
2026-05-04	Deadline for telephone/internet voting for shares held in T. Rowe Price Group, Inc. 1986 Employee Stock Purchase Plan.
2026-05-06	Deadline for internet/telephone voting for registered stockholders.
2026-05-07	2026 Annual Meeting of Stockholders at 8 a.m. eastern time.
2026-11-17	Latest date for stockholder proposals for the 2027 Annual Meeting to be included in the proxy statement; Latest date for proxy access stockholder nominations for the 2027 Annual Meeting.
2026-12-10	First vesting date for time-based RSUs granted in 2025 and performance-based RSUs granted in 2022.
2027	Earnout Payment period for OHA acquisition ends.
2027-01-07	Earliest date for stockholder advance notice of proposals for the 2027 Annual Meeting not included in the proxy statement.
2027-02-06	Latest date for stockholder advance notice of proposals for the 2027 Annual Meeting not included in the proxy statement.
2027-12-10	Second vesting date for time-based RSUs granted in 2025 and performance-based RSUs granted in 2022.
2028-12-08	Third vesting date for time-based RSUs granted in 2025.
2028-12-31	End of three-year performance period for 2025 performance-based RSUs.
2029-12-10	First vesting date for 2025 performance-based RSUs.
2030-12-10	Second vesting date for 2025 performance-based RSUs.
2050	Target to achieve net zero Scope 1 and 2 emissions.

Recommendation

hold

The filing indicates solid financial performance with AUM and revenue growth, consistent dividend increases, and a strong balance sheet. However, some key investment performance metrics and organic growth were below targets, and executive compensation decreased, suggesting a mixed outlook. The strategic initiatives and sustainability commitments are positive long-term drivers, but the immediate results do not warrant a strong buy, nor do they suggest a sell given the overall financial health. A "hold" recommendation reflects the balance of positive financial stability and strategic progress against areas needing improvement in investment performance and organic growth.

Keywords

Asset Management, Investment, SEC Filing, Proxy Statement, Corporate Governance, Financial Performance, AUM, Dividends, Share Repurchases, Executive Compensation, Risk Management, Cybersecurity, Sustainability, T. Rowe Price

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