Franklin Templeton Shareholders Greenlight Expanded Equity Plans as Firm Touts $1.66 Trillion AUM Milestone
Franklin Resources, Inc. (NYSE: BEN), operating globally as Franklin Templeton, convened its 2026 Annual Meeting of Stockholders virtually this week. Shareholders voted to approve a slate of proposals, including the election of directors and, notably, an expansion of the company's equity incentive plans. Following the formal proceedings, management detailed a year of strategic growth, culminating in a formidable $1.66 trillion in assets under management (AUM).
The meeting, chaired by Executive Chairman Greg Johnson, saw all five presented proposals pass with majority support. With a quorum established from over 521 million eligible shares, the votes formalized the board's compensation strategy aimed at retaining top talent in a competitive landscape.
In her business update, CEO Jenny Johnson portrayed fiscal 2025 as a period of "strong equity gains and broader market participation," an environment she called conducive to the firm's active management ethos. She reported ending AUM of $1.66 trillion as of September 30, 2025. While long-term net outflows stood at $97.4 billion—primarily attributed to the Western Asset Management unit—the core Franklin Templeton business told a different story. Excluding Western, the company generated $44.5 billion in long-term net inflows, marking eight consecutive quarters of positive flows.
"Our growth engines are firing," Johnson stated, pointing to "record growth" in retail, separately managed accounts (SMAs), and exchange-traded funds (ETFs). The firm's Canvas custom indexing platform and its alternative investment arm were particular bright spots. Alternative and multi-asset strategies drew combined net inflows of $25.7 billion, and the recent acquisition of Apera Asset Management pushed alternative AUM to $270 billion.
The CEO acknowledged "significant challenges" at Western Asset but expressed commitment to the subsidiary, noting a strong rebound in investment performance. On strategic priorities, Johnson said the firm is ahead of its five-year plan for alternatives fundraising and ETF growth. ETF AUM has grown at a 74% compound annual rate since 2023, with 16 consecutive quarters of net inflows.
CFO and COO Matthew Nicholls provided the financial context, reporting a 3% increase in average AUM to $1.61 trillion. Adjusted operating revenue rose 2% to $6.7 billion, though the operating margin dipped to 24.5%, which Nicholls linked to ongoing support for Western Asset. The company returned $930 million to shareholders via dividends and buybacks, upholding a dividend increase streak dating to 1981.
Investor Reactions:
"The numbers in ETFs and alts are undeniable," said David Chen, a portfolio manager at Horizon Advisors. "Franklin is successfully pivoting its legacy business towards high-growth, personalized vehicles. The $50 billion in ETF AUM halfway to their goal is a clear signal of market traction."
"It's a tale of two companies," countered Sarah Fitzwilliam, an independent investment analyst. "While they tout growth, the nearly $100 billion in net outflows and the margin compression are glaring red flags. Shareholders just approved more equity for management while the Western Asset integration continues to be a drag. The priorities seem misaligned."
Michael Rodriguez, a long-term shareholder, offered a balanced view: "The commitment to the dividend is reassuring for income-focused investors like myself. The strategic investments in Canvas and private markets are necessary for long-term relevance, even if they pressure margins in the short term. The key is whether they can stem the outflows."
As the meeting adjourned, the message from management was one of transformation. Franklin Templeton is betting heavily that its diversified push into personalized solutions, ETFs, and alternative assets will define its next chapter, even as it works to stabilize its traditional fixed-income operations.