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
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Invesco Ltd.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
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Notice of Annual General Meeting of Shareholders and 2014 Proxy Statement |
Your vote is important
Please vote by using the internet, the telephone or by
signing, dating and returning the enclosed proxy card
March 31, 2014
Invesco Ltd.
Two Peachtree Pointe
1555 Peachtree Street N.E.
Atlanta, Georgia 30309
March 30, 2012
Dear Fellow Shareholder,
You are cordially invited to attend the 20122014 Annual General Meeting of Shareholders of Invesco Ltd., which will be held on Thursday, May 17, 201215, 2014 at 1:00 p.m., Eastern Time, in the Appalachians Room, 18th Floor, at Invesco’s Global Headquarters, located at Two Peachtree Pointe, 1555 Peachtree Street N.E., Atlanta, Georgia 30309. Details of the business to be presented at the meeting can be found in the accompanying Notice of 2014 Annual General Meeting and Proxy Statement.of Shareholders.
We are pleased to once again this year furnish proxy materials to our shareholders overvia the Internet. Thee-proxy process expedites shareholders’ receipt of proxy materials and lowers the costs and reduces the environmental impact of our Annual General Meeting. On March 30, 2012,31, 2014, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials (“Notice”). The Notice contained instructions on how to access our 20122014 Proxy Statement, Annual Report on Form 10-K and other soliciting materials and how to vote. The Notice also contains instructions on how you can request a paper copy of the Proxy Statement and Annual Report if you so desire.
We hope you are planning to attend the meeting.Your vote is important and we encourage you to vote promptly. Whether or not you are able to attend the meeting in person, please follow the instructions contained in the Notice on how to vote via the Internet or via the toll-free telephone number, or request a paper proxy card to complete, sign and return by mail so that your shares may be voted.
On behalf of the Board of Directors and the management of Invesco, I extend our appreciation for your continued support.
Yours sincerely,
Yours sincerely, |
Rex D. Adams Chairman |
Invesco Ltd. Two Peachtree Pointe 1555 Peachtree Street N.E. Appalachians Room, 18th Floor Atlanta, Georgia 30309 |
NOTICE OF 20122014 ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be HeldThursday, May 17, 201215, 2014
NOTICE IS HEREBY GIVEN that the 20121:00 p.m.
The Annual General Meeting of Shareholders of Invesco Ltd. will be held on Thursday, May 17, 2012, at 1:00 p.m., Eastern Time,Invesco’s Global Headquarters in the Appalachians Room, 18th Floor, at Invesco’s Global Headquarters, located at Two Peachtree Pointe, 1555 Peachtree Street N.E., Atlanta, Georgia 30309 foron Thursday, May 15, 2014 at 1:00 p.m. local time. The purposes of the following purposes:meeting are:
1. | To amend the Invesco Ltd. Amended and Restated Bye-Laws to declassify our Board of Directors; |
2. | To elect |
To hold an advisory vote on executive compensation; |
4. | To appoint |
5. | To consider and act upon such other business as may properly come before the meeting or any adjournment thereof. |
During the Annual General Meeting, management also will present Invesco’sthe audited consolidated financial statements for the fiscal year ended December 31, 2011.
2013 of Invesco will be presented. Only holders of record of Invesco common shares on March 19, 201217, 2014 are entitled to notice of and to attend and vote at the Annual General Meeting and any adjournment or postponement thereof.Whether or not you are able to attend in person, please vote via the Internet or the toll-free telephone number, or request a paper proxy card to complete, sign and return by mail so that your shares may be voted. Invesco shareholders of record who attend the meeting may vote their common shares in person, even though they have sent in proxies.
March 31, 2014
Atlanta, Georgia
By Order of the Board of Directors,
Kevin M. Carome, Company Secretary
March 30, 2012
REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: | ||||||
VIA THE INTERNET Visit the web site listed on your proxy card | BY MAIL Sign, date and return a requested proxy card | |||||
BY TELEPHONE Call the telephone number listed on your proxy card | IN PERSON Attend the Annual General Meeting in Atlanta, Georgia |
ADMISSION TO THE 2012 ANNUAL GENERAL MEETING
An admission ticket (or other proofTable of share ownership) and some form of government-issued photo identification (such as a valid driver’s license or passport) will be required for admission to the Annual General Meeting.Only shareholders who own Invesco common shares as of the close of business on March 19, 2012 and invited guests will be entitled to attend the meeting. An admission ticket will serve as verification of your ownership.Contents
If your Invesco shares are registered in your name and you received or accessed your proxy materials electronically over the Internet, click the appropriate box on the electronic proxy card or follow the telephone instructions when prompted and an admission ticket will be held for you at the check-in area at the Annual General Meeting.
If your Invesco shares are held in a bank or brokerage account, contact your bank or broker to obtain a written legal proxy in order to vote your shares at the meeting. If you do not obtain a legal proxy from your bank or broker, you will not be entitled to vote your shares, but you can still attend the Annual General Meeting if you bring a recent bank or brokerage statement showing that you owned Invesco common shares on March 19, 2012.
No cameras, recording devices or large packages will be permitted in the meeting room.
i
PROXY STATEMENTProxy Statement Summary
This summary highlights selected information in this Proxy Statement. Please review the entire Proxy Statement and the company’s Annual Report on Form 10-K for the year ended December 31, 2013 before voting.
2013 Performance Highlights
27.7% Increase in Annual Adjusted Operating Income* | 39.7% Annual Adjusted Operating Margin* | $34.4 billion Assets Under Management Total Net Inflows | 29.1% Increase in Annual Adjusted Diluted EPS* | $850 million Total 2013 Return of Capital to Shareholders |
*Note Regarding Non-GAAP Financial Measures: The adjusted financial measures are all non-GAAP financial measures. See the information on page 53 through 58 of our Annual Report on Form 10-K for the fiscal year 2013 for a presentation of, and reconciliation to, the most directly comparable GAAP measures. All current and prior period references to consolidated Invesco Ltd. results, including pre-cash bonus operating income (“PCBOI”) and assets under management (“AUM”), exclude the operations of the Atlantic Trust Private Wealth Management business (“Atlantic Trust”). The company closed the sale of Atlantic Trust on December 31, 2013.
2013 was a year of strong performance for Invesco. Invesco continued to provide strong, long-term investment performance to clients, which contributed to robust organic growth throughout the year. We delivered excellent results for our shareholders, continued to make progress against our strategic objectives and continued to expand the company’s investment capabilities globally.
2013 Executive Compensation Highlights
Our compensation programs are tied to the achievement of our financial and strategic results and our success in serving our clients’ and shareholders’ interests. Reflecting our strong financial results and significant achievements related to our long-term strategic objectives, the compensation of our executive officers was positively impacted in 2013 and paid from the aggregate pool approved by the Compensation Committee (see“Executive Compensation – Compensation Discussion and Analysis – Setting Annual Incentive Compensation Pool”). Below we highlight the results of the 2013 compensation decisions for our executive officers.
16% year-over-year increase in aggregate total compensation for our executive officers* | X | 69% of incentive compensation is deferred incentive compensation for our President & CEO* Deferred Incentive Compensation | x | 64% of incentive compensation is deferred incentive compensation Deferred Incentive Compensation |
* | Salaries for our executive officers were unchanged for 2013. Percentages are approximate. |
Proxy Statement Summary (cont’d)
Results of 2013 Say-on-Pay Vote and Our Investor Outreach
At the 2013 Annual General Meeting of Shareholders, 95.8% of the votes cast were in favor of the advisory proposal to approve our named executive officer (“NEO”) compensation, (the “Say-on-Pay” advisory proposal). Although we believe that the 2013 vote conveyed our shareholders’ strong support of the committee’s decisions and the existing executive compensation programs, during the balance of 2013 and early 2014, we continued to actively seek investor feedback concerning our compensation programs. In 2013 and early 2014, we held meetings with a significant number of our largest shareholders. While all of the shareholders we spoke with agree on the importance of pay and performance alignment, there was no consensus among these shareholders on how alignment should be measured. A number of the shareholders indicated that their Say-on-Pay decisions are made on a case-by-case basis and that they have not had any issues with Invesco’s compensation in prior years, some noting in particular that they believe appropriate decisions have been made for NEO compensation. Our largest shareholders do not share a consistent philosophy regarding the structure of compensation. That said, all shareholders affirmed the importance of clear disclosure and transparency regarding the decision making process undertaken by the committee. Based on this feedback the committee determined to continue our current compensation practices as described in this Compensation Discussion and Analysis.
Matters For Shareholder Voting
At this year’s Annual General Meeting, we are asking our shareholders to vote on the following matters:
Proposal 1: Amendment to our Bye-Laws to Declassify our Board of Directors |
The Board recommends a voteFOR this proposal. See further below in this summary and page 5 for details.
Proposal 2: Election of Directors |
The Board recommends a voteFOR the election of the director nominees named in this Proxy Statement. See further below in this summary and pages 6 through 12 for further information on the nominees.
Proposal 3: Advisory Vote on Executive Compensation |
The Board recommends a voteFOR this proposal. See page 53 for details.
Proposal 4: Appointment of PricewaterhouseCoopers LLP for 2014 |
The Board recommends a voteFOR this proposal. See page 54 for details.
Amendment to Our Bye-Laws to Declassify Our Board Of Directors
Currently, our Board of Directors is divided into three classes and members of our Board are elected for staggered terms of three years. Our Board has adopted an amendment to the Invesco Ltd. Amended and Restated Bye-Laws (the “Bye-Laws”) that, if approved by the shareholders at this year’s Annual General Meeting, will provide for annual elections of our directors as follows. Commencing with the class of directors standing for election at the 2015 Annual General Meeting, directors will stand for election for one-year terms, expiring at the next succeeding Annual General Meeting. The directors who were elected at the 2013 Annual General Meeting, whose terms will expire in 2016, and the directors who are elected at the 2014 Annual General Meeting under Proposal No. 2, whose terms will expire in 2017, will continue to hold office until the end of the terms for which they were elected. Therefore, if this proposal is approved, all directors will be elected on an annual basis beginning with the 2017 Annual General Meeting. In all cases, each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal. If the amendment to the Bye-Laws is not approved by our shareholders, our Board will remain classified. This proposal requires the affirmative vote of at least 75% of the issued and outstanding shares of the company.
Proxy Statement Summary (cont’d)
Election Of Directors
You are being asked to cast votes for two directors, Messrs. Denis Kessler and G. Richard Wagoner, Jr., each for a three year term expiring in 2017. As previously announced, neither Mr. Rex Adams nor Sir John Banham has been nominated for re-election to the Board because each has reached the mandatory retirement age. This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting. Immediately below is information regarding the directors standing for election and Board members continuing in office.
Name | Age | Director Since | Occupation | Independent | Other Public Boards | Committee Memberships | ||||||||||||
A | C | NCG | ||||||||||||||||
Directors standing for election
| Denis Kessler | 62 | 2002 | Chairman and CEO, SCOR SE | X | 2(a) | M | M | M | |||||||||
G. Richard Wagoner, Jr. | 61 | 2013 | Former Chairman and CEO, General Motors Corporation | X | 1 | M | M | M | ||||||||||
Directors continuing in office | Joseph R. Canion | 69 | 1997 | Former CEO, Compaq Computer Corporation; Former Chairman Insource Technology Group | X | 1 | — | — | Ch(b) | |||||||||
Martin L. Flanagan | 53 | 2005 | President and CEO, Invesco Ltd. | — | 0 | — | — | — | ||||||||||
C. Robert Henrikson | 66 | 2012 | Former President and CEO, MetLife, Inc. and Metropolitan Life Insurance Company | X | 1 | M | Ch(b) | M | ||||||||||
Ben F. Johnson III | 70 | 2009 | Former Managing Partner, Alston & Bird LLP | X | 0 | M | M | M | ||||||||||
Edward P. Lawrence | 72 | 2004 | Former Partner, Ropes & Gray LLP | X | 0 | M | M | M | ||||||||||
J. Thomas Presby | 74 | 2005 | Former Partner, Deloitte & Touche LLP | X | 3 | Ch | — | M | ||||||||||
Phoebe A. Wood | 60 | 2010 | Principal, CompaniesWood, Former Vice Chairman and CFO, Brown-Forman Corporation | X | 3 | M | M | M | ||||||||||
Retiring Directors | Rex D. Adams | 73 | 2001 | Former Vice President of Administration, Mobil Corporation | X | 1 | — | M | Ch | |||||||||
Sir John Banham | 73 | 1999 | Former Chairman of Johnson Mathey plc | X | 1 | M | Ch | M |
(a) Mr. Kessler currently serves on the board of directors of SCOR SE, BNP Paribas SA and Dassault Aviation. Effective as of the date of the 2014 Annual General Meeting, Mr. Kessler’s service on the Dassault Aviation board will end. (b) As of the conclusion of the 2014 Annual General Meeting. | A – Audit | |||||||||
C – Compensation | ||||||||||
NCG– Nomination and Corporate | ||||||||||
Governance | ||||||||||
M – Member | ||||||||||
Ch – Chairman |
Proxy Statement Summary (cont’d)
Governance Highlights
Independence | • 10 out of our 11 current directors are independent. • Our CEO is the only management director. • All of our Board committees are composed exclusively of independent directors. | |
Independent Chairman | • We have an independent Chairman of our Board of Directors, selected by the independent directors. • The Chairman serves as liaison between management and the other independent directors. | |
Executive Sessions | • The independent directors regularly meet in private without management. • The Chairman presides at these executive sessions. | |
Board Oversight of Risk Management | • Our Board has principal responsibility for oversight of the company’s risk management process and understanding of the overall risk profile of the company. | |
Share Ownership Requirements | • Our non-executive directors must hold at least 18,000 shares of Invesco common stock within seven years of joining the Board. • Our CEO must hold at least 250,000 shares of Invesco common stock. • All other executive officers must hold at least 100,000 shares of Invesco common stock. | |
Board Practices | • Our Board annually reviews its effectiveness as a group. • Nomination policies are adjusted as needed to ensure that our Board as a whole continues to reflect the appropriate mix of skills and experience. • Directors may not stand for election after age 73. | |
Accountability | • Directors must be elected by a majority of votes cast. • The Board is presenting for shareholder approval a resolution to declassify the Board of Directors. |
Additional Information Regarding the Annual General Meeting
Please see “General Information Regarding the Annual General Meeting” beginning on page 57 for important additional information regarding the Annual General Meeting.
Proxy Statement
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Invesco Ltd. (“Board” or “Board of Directors”) for the Annual General Meeting to be held on Thursday, May 17, 2012,15, 2014, at 1:00 p.m. Eastern Time. In this Proxy Statement, we may refer to Invesco Ltd. as the “company,” “Invesco,” “we,” “us” or “our.”
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ELECTION OF DIRECTORSAmendment to the Company’s Amended and RestatedBye-Laws to Declassify our Board
GENERAL
Our
The Board of Directors currently has elevenunanimously adopted and is submitting for shareholder approval an amendment (the “Amendment”) to the Bye-Laws that would phase in the declassification of our Board of Directors and provide instead for the annual election of directors.
The Board believes that its classified structure has helped assure continuity of the company’s business strategies and has reinforced a commitment to long-term shareholder value. Although these are important benefits, the Board recognized the growing sentiment among shareholders and the investment community in favor of annual elections. After careful consideration, the Board determined that it is appropriate to propose declassifying the Board.
Currently, our Board of Directors is divided into three classes.classes and members of the Board are elected for staggered terms of three years. If the Amendment is approved, commencing with the class of directors standing for election at the 2015 Annual General Meeting, directors will stand for election for a one-year term, expiring at the next succeeding annual general meeting. The directors who were elected at the 2013 Annual General Meeting, whose terms will expire in 2016, and the directors who are elected at the 2014 Annual General Meeting under Proposal No. 2, whose terms will expire in 2017, will continue to hold office until the end of the terms for which they were recently elected. Therefore, if the Amendment is approved all directors will be elected on an annual basis beginning with the 2017 Annual General Meeting. The shaded blocks in the table below illustrates the years in which members of our Board would stand for annual elections if the proposal is approved by our shareholders.
Election Year | |||||||||
Director | 2015 | 2016 | 2017 | ||||||
Flanagan, Henrikson, Johnson | |||||||||
Canion, Wood | |||||||||
Kessler, Wagoner |
In all cases, each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal. If the Amendment is not approved, the Board of Directors will remain classified. Appendix A shows the proposed changes to Bye-Laws 8, 11 and 12, with deletions indicated by strikeouts and additions indicated by underlining.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDMENT TO THE BYE-LAWS. This proposal requires the affirmative vote of at least 75% of the issued and outstanding shares of the company. Abstentions will have the same effect as votes “against” the proposal.
Election of Directors
The Board is divided into three classes, and our Class I directors are serving a term of office expiring at the annual general meeting of shareholders in 2014 the Class II directors are serving a term of office expiring at the annual general meeting of shareholders in 2012, and the Class III directors are serving a term of office expiring at the annual general meeting of shareholders in 2013. At each annual general meeting of shareholders, successors to the class of directors whose term expires at such annual general meeting will be elected for a three-year term.Annual General Meeting. A director holds office until the annual general meeting of shareholders for the year in which his or her term expires, and until such director’s successor has been duly elected and qualified or until such director is removed from office under our Bye-Laws or such director’s office is otherwise earlier vacated. At each annual general meeting, successors to the class of directors whose term expires at such annual general meeting will be elected for a three-year term. However, if shareholders approve Proposal No. 1 providing for annual election of directors, beginning with the 2015 Annual General Meeting, successors to the class of directors whose term expires at such annual general meeting will be elected for a one-year term.
As previously announced, neither Mr. Rex Adams nor Sir John Banham has been nominated for re-election at the 2014 Annual General Meeting because each has reached the mandatory retirement age. Following the completion of the terms of Mr. Adams and Sir John Banham at the conclusion of the 2014 Annual General Meeting, the Board intends to reduce its size to nine (9) members.
The Board has nominated Martin L. Flanagan, C. Robert Henrikson, Ben F. Johnson, IIIMessrs. Denis Kessler and J. Thomas PresbyG. Richard Wagoner, Jr. for election as directors of the company for a term ending at the 2015 annual general meeting.2017 Annual General Meeting. Messrs. Flanagan, Henrikson, Johnson,Kessler and PresbyWagoner are current directors of the company.company and further information regarding each of them is shown on the following page. Each nominee has indicated to the company that he would serve if elected. We do not anticipate that Messrs. Flanagan, Henrikson, JohnsonKessler or PresbyWagoner would be unable to stand for election, but if that were to happen, the Board may reduce the size of the Board, designate a substitute or leave a vacancy unfilled. If a substitute is designated, proxies voting on the original director candidate will be cast for the substituted candidate.
Under our Bye-Laws, at any general meeting held for the purpose of electing directors at which a quorum is present, each director nominee receiving a majority of the votes cast at the meeting will be elected as a director. If a nominee for director who is an incumbent director is not elected and no successor has been elected at the meeting, the director is required under our Bye-Laws to submit his or her resignation as a director. Our Nomination and Corporate Governance Committee would then make a recommendation to the full Board on whether to accept or reject the resignation. If the resignation is not accepted by the Board, the director will continue to serve until the next annual general meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If the director’s resignation is accepted by the Board, then the Board may fill the vacancy. However, if the number of nominees exceeds the number of positions available for the election of directors, the directors so elected shall be those nominees who have received the greatest number of votes and at least a majority of the votes cast in person or by proxy.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION TO THE BOARD OF EACH OF THE DIRECTOR NOMINEES. This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting.
Information about Director Nominees
and Directors Continuing in Office
Director Nominees
Listed below are the names, ages as of March 31, 2014, and principal occupations for the past five years of the director nominees and directors continuing in office.
Non-Executive Director Director since 2002 Committees: Audit, Compensation, Nomination and Corporate Governance | Denis Kessler (62) has served as a non-executive director of our company since March 2002. Mr. Kessler is chairman and chief executive officer of SCOR SE, and he also serves as a member of the board of directors of BNP Paribas SA. Mr. Kessler previously served on the boards of directors of Bollore from 1999 until 2013, Fonds Strategique d’Investissement from 2008 until 2013 and Dassault Aviation from 2003 until 2014. He is member of the supervisory board of Yam Invest N.V., a privately-held company, and a global counsellor of The Conference Board. Prior to joining the SCOR group, Mr. Kessler was chairman of the French Insurance Federation, senior executive vice president of the AXA Group and executive vice chairman of the French Business Confederation. Mr. Kessler is a graduate of École des Hautes Études Commerciales (HEC Paris). He holds a Doctorat d’Etat of the University of Paris. He is a Doctor Honoris Causa from the Moscow Academy of Finance and the University of Montreal. Skills and Expertise Denis Kessler’s experience as an economist and chief executive of a major global reinsurance company have combined to give him valuable insight into both the investment management industry’s macro-economic positioning over the long term as well as our company’s particular challenges within that industry. Further, his experience as a director of a variety of international public companies in several industries has enabled him to provide effective counsel to our Board on many issues of concern to our management. | |
Non-Executive Director Director since 2013 Committees: Audit, Compensation, Nomination and Corporate Governance | G. Richard (“Rick”) Wagoner, Jr. (61) has served as a non-executive director of our company since October 2013. Mr. Wagoner served as chairman and chief executive officer of General Motors Corporation (“GM”) from May 2003 through March 2009, and had been president and chief executive officer since June 2000. Prior positions held at GM during his 32-year career with that company include executive vice president and president of North American operations, executive vice president, chief financial officer and head of worldwide purchasing, and president and managing director of General Motors do Brasil. On June 1, 2009, GM and its affiliates filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York, seeking relief under Chapter 11 of the U.S. Bankruptcy Code. Mr. Wagoner was not an executive officer or director of GM at the time of that filing. Mr. Wagoner is a member of the board of directors of Graham Holdings Company and several privately-held companies. In addition, he is a member of the advisory boards of AEA Investors and Jefferies Investment Banking and Capital Markets Group, and he advises a number of start-up and early-stage ventures. Mr. Wagoner is a member of the board of visitors of Virginia Commonwealth University, chair of the Duke Kunshan University Advisory Board and a member of Duke’s Fuqua School of Business Advisory Board. He is a member of the mayor of Shanghai, China’s International Business Leaders Advisory Council. Mr. Wagoner received his B.A. from Duke University and his M.B.A. from Harvard University. Skills and Expertise Rick Wagoner brings to the Board valuable business, leadership and management insights into driving strategic direction and international operations gained from his32-year career with GM. Mr. Wagoner also brings significant experience in public company financial reporting and corporate governance matters gained through his service with other public companies. |
Directors Continuing in Office – Term Expiring in 2015
Director, President and Chief Executive Officer Director since 2005 | Martin Flanagan (53) has been a director and President and Chief Executive Officer of Invesco since August 2005. He is also a trustee and vice-chairman of the Invesco Family of Funds. Mr. Flanagan joined Invesco from Franklin Resources, Inc., where he was president and co-chief executive officer from January 2004 to July 2005. Previously he had been Franklin’s co-president from May 2003 to January 2004, chief operating officer and chief financial officer from November 1999 to May 2003, and senior vice president and chief financial officer from 1993 until November 1999. Mr. Flanagan served as director, executive vice president and chief operating officer of Templeton, Galbraith & Hansberger, Ltd. before its acquisition by Franklin in 1992. Before joining Templeton in 1983, he worked with Arthur Andersen & Co. Mr. Flanagan received a B.A. and BBA from Southern Methodist University (SMU). He is a CFA charterholder and a certified public accountant. He serves on the Board of Governors and as a member of the Executive Committee for the Investment Company Institute, and is a former chairman. He also serves as a member of the executive board at the SMU Cox School of Business and a member of various civic organizations in Atlanta. Skills and Expertise Martin Flanagan has spent nearly 30 years in the investment management industry, including roles as an investment professional and a series of executive management positions in business integration, strategic planning, investment operations, shareholder services and finance, with over eight years spent as a CEO. Mr. Flanagan also obtained extensive financial accounting experience with a major international accounting firm. He also is a Chartered Financial Analyst. Through his decades of involvement, including as past chairman of our industry’s principal trade association, the Investment Company Institute, he has amassed a broad understanding of the larger context of investment management that has guided the Board during many critical junctures. | |
Non-Executive Director Director since 2012 Committees: Audit, Compensation, and Nomination and Corporate Governance | Robert Henrikson (66) has served as a non-executive director of our company since January 2012. Mr. Henrikson was president and chief executive officer of MetLife, Inc. and Metropolitan Life Insurance Company from March 2006 through May 2011, and he served as a director of MetLife, Inc. from April 2005, and as chairman from April 2006, through December 31, 2011. During his more than 39-year career with MetLife, Inc., Mr. Henrikson held a number of senior positions in that company’s individual, group and pension businesses. Mr. Henrikson is a former chairman of the American Council of Life Insurers, a former chairman of the Financial Services Forum, a director emeritus of the American Benefits Council, and a former member of the President’s Export Council. In 2012, Mr. Henrikson was elected to the board of directors of Swiss Re, where he serves as chairman of the compensation committee and is a member of the chairman’s and governance committee and the finance and risk committee. Mr. Henrikson also serves as chairman of the board of the S.S. Huebner Foundation for Insurance Education, as a member of the boards of trustees of Emory University and Indian Springs School and a member of the boards of directors of The New York Philharmonic and Americares. Mr. Henrikson earned a bachelor’s degree from the University of Pennsylvania and a law degree from Emory University School of Law. In addition, he is a graduate of the Wharton School’s Advanced Management Program. Skills and Expertise Robert Henrikson’s nearly 40 years of experience in the financial services industry, which includes diverse positions of increasing responsibility leading to his role as chief executive officer of MetLife, Inc., have provided him with an in-depth understanding of our industry. |
Non-Executive Director Director since 2009 Committees: Audit, Compensation, and Nomination and Corporate Governance | Ben Johnson (70) has served as a non-executive director of our company since January 2009. Mr. Johnson served as the managing partner at Alston & Bird LLP from 1997 to 2008. He was named a partner at Alston & Bird in 1976, having joined the firm in 1971. He received his B.A. degree from Emory University and his J.D. degree from Harvard Law School. He serves as chair of the board of trustees of Atlanta’s Woodward Academy and is the immediate past chair of the board of trustees of Emory University, a position he held from 2000-2013. Mr. Johnson also serves as a trustee of The Carter Center and the Charles Loridans Foundation. He is chair and a non-executive director of Summit Industries, Inc. Skills and Expertise Ben Johnson brings to the Board more than a decade of experience leading one of the largest law firms in Atlanta, Georgia, where Invesco was founded and grew to prominence. His career as one of the region’s leading business litigators has given Mr. Johnson deep experience of the types of business and legal issues that are regularly faced by large public companies such as Invesco. | |
Non-Executive Director Director since 2005 Committees: Audit, and Nomination and Corporate Governance | Thomas Presby (74) has served as a non-executive director of our company since November 2005 and as chairman of the Audit Committee since April 2006. Over a period of thirty years as a partner at Deloitte LLP, he held many positions in the U.S. and abroad, including global deputy chairman and chief operating officer. Currently he is a director of the following other public companies where he also chairs the audit committees: First Solar, Inc., World Fuel Services Corp. and ExamWorks Group Inc. From 2003 to 2009, Mr. Presby was a director of Turbochef Technologies, Inc., from 2005 to 2011 he was a director of American Eagle Outfitters, Inc., and from 2003 to 2012 he was a director of Tiffany & Co. He is a board member of the New York chapter of the National Association of Corporate Directors and a trustee of Montclair State University (N.J.). He previously served as a trustee of Rutgers University and as a director and chairman of the audit committee of The German Marshall Fund of the USA. He received a B.S. in electrical engineering from Rutgers University and an MBA degree from the Carnegie Mellon University Graduate School of Business. Mr. Presby is a certified public accountant in New York and Ohio and a holder of the NACD Certificate of Director Education. He was named by the National Association of Corporate Directors as one of the “Top 100” directors of 2011. Skills and Expertise Thomas Presby has amassed considerable experience at the highest levels of finance and accounting, having served for three decades as a partner, as well as in positions of senior management (including chief operating officer), at one of the world’s largest accounting firms. In keeping with his experience, Mr. Presby has been sought by leading companies in a variety of industries to chair the audit committee, a role which he also fulfills for Invesco, where he is additionally recognized by the Board as one of our audit committee financial experts as defined under rules of the Securities and Exchange Commission. |
Directors Continuing in Office – Term Expiring in 2016 | ||
Non-Executive Director Director since 1997 Committees: Nomination and Corporate Governance | Joseph Canion (69) has served as a non-executive director of our company since 1997 and was a director of a predecessor constituent company (AIM Investments) from 1993 to 1997, when Invesco acquired that entity. Mr. Canion has been a leading figure in the technology industry after co-founding Compaq Computer Corporation in 1982 and serving as its chief executive officer from 1982 to 1991. He also founded Insource Technology Group in 1992 and served as its chairman until September 2006. Mr. Canion received a B.S. and M.S. in electrical engineering from the University of Houston. He is on the board of directors of ChaCha Search, Inc. and is an advisory director of Encore Health Resources and Dynamics, Inc. and Houston Methodist Research Institute. From 2008 to 2011 he was a member of the board of Auditude. Skills and Expertise Joseph Canion has extensive service as a board member within the investment management industry, having also served as a director of AIM Investments, a leading U.S. mutual fund manager, from 1991 through 1997 when Invesco acquired AIM. Mr. Canion additionally has notable experience as an entrepreneur, havingco-founded a business that grew into a major international technology company. We believe that his experience guiding a company throughout the entirety of its business lifecycle has given him a wide-ranging understanding of the types of issues faced by private and public companies. | |
Non-Executive Director Director since 2004 Committees: Audit Compensation and Nomination and Corporate Governance | Edward Lawrence (72) has served as a non-executive director of our company since October 2004. He was a partner of Ropes & Gray, a Boston law firm, from 1976 to December 2007. He currently is a retired partner of Ropes & Gray and a member of the investment committee of the firm’s trust department. Mr. Lawrence is a graduate of Harvard College and earned a J.D. from Columbia University Law School. He is chairman of Partners Health Care System, Inc. and chairman of Dana-Farber Partners Cancer Center. From 1995 to 2011 he was a trustee (and chairman from 1999 to 2008) of the Board of the Massachusetts General Hospital and was a trustee of McLean Hospital in Belmont, Massachusetts from 2000 to 2011. Skills and Expertise Edward Lawrence has over thirty years’ experience as a corporate and business lawyer in a major Boston law firm, which has given him a very substantial understanding of the business issues facing large financial services companies such as Invesco. In particular, Mr. Lawrence specialized in issues arising under the Investment Company Act of 1940 and the Investment Advisers Act of 1940 which provide the Federal legal framework for the company’s U.S. investment management business. This background gives Mr. Lawrence an understanding of the potential legal ramifications of Board decisions which is particularly valuable to the Board’s functioning on many of the decisions it is called upon to take. As a member of his law firm’s trust investment practice and as member of investment committees of numerous entities, he also has had frequent interaction with investment advisers located throughout the country, giving him an opportunity to view a wide range of investment styles and practices. |
Non-Executive Director Director since 2010 Committees: Audit, Compensation, and Nomination and Corporate Governance | Phoebe Wood (60) has served as a non-executive director of our company since January 2010. She is currently a principal at CompaniesWood and served as vice chairman, chief financial officer and in other capacities at Brown-Forman Corporation from 2001 until her retirement in 2008. Prior to Brown-Forman, Ms. Wood was vice president, chief financial officer and a director of Propel Corporation (a subsidiary of Motorola) from 2000 to 2001. Previously, Ms. Wood served in various capacities during her tenure at Atlantic Richfield Company (ARCO) from 1976 to 2000. Ms. Wood currently serves on the boards of directors of Leggett & Platt, Incorporated (compensation committee), Coca-Cola Enterprises Inc. (audit, corporate responsibility and sustainability and affiliated transaction committees) and Pioneer Natural Resources Company (audit and nominating and corporate governance committees), as well as on the boards of trustees for the University of Louisville, the Gheens Foundation and the American Printing House for the Blind. From 2001 to 2011 Ms. Wood was a member of the board of trustees for Smith College. Ms. Wood received her A.B. degree from Smith College and her M.B.A. from University of California Los Angeles. Skills and Expertise Phoebe Wood has extensive experience as both a director and a member of senior financial management of public companies in a variety of industries. Her significant accounting, financial, and business expertise have made her a particularly valuable addition to our directors’ mix of skills, and she has been designated as one of our audit committee’s financial experts, as defined under rules of the Securities and Exchange Commission. | |
Retiring Directors | ||
Non-Executive Director Director since 2001 Committees: Compensation, and Nomination and Corporate Governance | Rex Adams (73) became chairman of the company in April 2006. He has served as a non-executive director of our company since November 2001 and as chairman of the Nomination and Corporate Governance Committee since January 2007. Mr. Adams was dean of the Fuqua School of Business at Duke University from 1996 to 2001 following a 30-year career with Mobil Corporation. He joined Mobil International in London in 1965 and served as vice president of administration for Mobil Corporation from 1988 to 1996. Mr. Adams was previously a director and member of the audit committee at Vintage Petroleum. Mr. Adams earned a B.A. from Duke University. He was selected as a Rhodes Scholar in 1962 and studied at Merton College, Oxford University. Mr. Adams serves on the Board of Directors of Alleghany Corporation and formerly served as chairman of the Public Broadcasting Service. Skills and Expertise Rex Adams has broad international experience in senior management of one of the world’s largest public companies, as well as substantial insight on a variety of business management issues from an academic perspective. His nearly decade of service on our Board has given him a deep understanding of the variety of issues encountered by investment management companies throughout the business cycle. |
Non-Executive Director Director since 1999 Committees: Audit, Compensation, and Nomination and Corporate Governance | Sir John Banham (73) has served as a non-executive director of our company since 1999 and as chairman of the Compensation Committee since January 2007. Sir John was director general of the Confederation of British Industry from 1987 to 1992, a director of National Power and National Westminster Bank from 1992 to 1998, chairman of Tarmac PLC from 1994 to 2000, chairman of Kingfisher PLC from 1995 to 2001, chairman of Whitbread PLC from 2000 to 2005, chairman of Geest plc from 2002 to 2005 and chairman of Spacelabs Healthcare Inc. from 2005 to 2008. He was the chairman of Johnson Matthey plc from 2006 to 2011. He is currently chairman of Sultan Scientific Limited and of the UK Future Homes Commission, and an independent director of Cyclacel Pharmaceuticals Inc. Sir John is a graduate of Cambridge University and has been awarded honorary doctorates by four leading U.K. universities. Skills and Expertise Sir John Banham brings to the Board a very broad appreciation for international business issues garnered over an extraordinary career in a variety of industries, including financial services. From 2006 to 2011 he was chairman of a successful global manufacturing company. As past director general of the Confederation of British Industry, he represented the views of British business to relevant governments and regulators. Sir John’s experience across a substantial spectrum of industries and companies within the United Kingdom gives him unique insight into the needs of our business in one of Invesco’s most significant and successful markets. |
For a director to be considered independent, the Board must affirmatively determine that the director does not have any material relationship with the company either directly or as a partner, shareholder or officer of an organization that has a relationship with the company. Such determinations are made and disclosed pursuantaccording to applicable NYSErules established by the New York Stock Exchange (“NYSE”) or other rules. A material relationship can include, but is not limited to, commercial, industrial, banking, consulting, legal, accounting, charitable and family relationships. In accordance with the rules of the NYSE, the Board has affirmatively determined that it is currently composed of a majority of independent directors, and that the following directors are independent and do not have a material relationship with the company: Rex D. Adams, Sir John Banham, Joseph R. Canion, C. Robert Henrikson, Ben F. Johnson III, Denis Kessler, Edward P. Lawrence, J. Thomas Presby, G. Richard Wagoner, Jr. and Phoebe A. Wood.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION TO THE BOARD OF EACH OF THE DIRECTOR NOMINEES. The voting requirements for this proposal are described above and in the “Questions and Answers About Voting Your Common Shares” section.
INFORMATION ABOUT DIRECTOR NOMINEES AND DIRECTORS CONTINUING IN OFFICECorporate Governance
Listed below are the names, ages as of March 30, 2012, and principal occupations for the past five years of the director nominees and directors continuing in office.
Nominees for re-election to the Board of Directors for a three year term expiring in 2015
Martin L. Flanagan, CFA, CPA (51) President and Chief Executive Officer of Invesco Ltd.
Martin L. Flanagan has been a director and president and chief executive officer of Invesco since August 2005. He is also a trustee and vice-chairman of the Invesco Family of Funds. Mr. Flanagan joined Invesco from Franklin Resources, Inc., where he was president and co-chief executive officer from January 2004 to July 2005. Previously he had been Franklin’s co-president from May 2003 to January 2004, chief operating officer and chief financial officer from November 1999 to May 2003, and senior vice president and chief financial officer from 1993 until November 1999. Mr. Flanagan served as director, executive vice president and chief operating officer of Templeton, Galbraith & Hansberger, Ltd. before its acquisition by Franklin in 1992. Before joining Templeton in 1983, he worked with Arthur Andersen & Co. Mr. Flanagan received a B.A. and BBA from Southern Methodist University (SMU). He is a CFA charterholder and a certified public accountant. He serves on the Board of Governors and as a member of the Executive Committee for the Investment Company Institute, and is a former chairman. He also serves as a member of the executive board at the SMU Cox School of Business and a member of various civic organizations in Atlanta.
C. Robert Henrikson(64) Non-Executive Director
Mr. Henrikson has served as a non-executive director of our company since January 2012. Mr. Henrikson was president and chief executive officer of MetLife, Inc. and Metropolitan Life Insurance Company from March 2006 through May 2011, and he served as a director of MetLife, Inc. from April 2005, and as chairman from April 2006, through December 31, 2011. During his more than 39-year career with MetLife, Inc., Mr. Henrikson held a number of senior positions in that company’s individual, group and pension businesses. In July 2010, Mr. Henrikson was appointed by President Barack Obama to the President’s Export Council, the principal national advisory committee on international trade. Mr. Henrikson is a former chairman of the American Council of Life Insurers, a former chairman of the Financial Services Forum, a director emeritus of the American Benefits Council, chairman of the board of the Wharton School’s S.S. Huebner Foundation for Insurance Education, and a trustee of the American Museum of Natural History. He also serves on the Board of Trustees of Emory University and the boards of directors of The New York Philharmonic, The New York Botanical Garden, and the Partnership for New York City. Mr. Henrikson received a bachelor’s degree from the University of Pennsylvania and a law degree from Emory University School of Law. In addition, he is a graduate of the Wharton School’s Advanced Management Program.
Ben F. Johnson, III(68) Non-Executive Director
Ben Johnson has served as a non-executive director of our company since January 2009. Mr. Johnson served as the managing partner at Alston & Bird LLP from 1997 to 2008. He was named a partner at Alston & Bird in 1976, having joined the firm in 1971. He received his B.A. degree from Emory University and his J.D. degree from Harvard Law School. He serves as Chair of the Board of Trustees of Emory University and Atlanta’s Woodward Academy and immediate past chair and board member of the Atlanta Symphony Orchestra. Mr. Johnson also serves as a Trustee of The Carter Center and the Charles Loridans Foundation. He is chair and a non-executive director of Summit Industries, Inc., a privately-held company.
J. Thomas Presby, CPA (72) Non-Executive Director
Thomas Presby has served as a non-executive director of our company since November 2005 and as chairman of the Audit Committee since April 2006. Over a period of thirty years as a partner in Deloitte, he held
many positions in the United States and abroad, including Global Deputy Chairman and Chief Operating Officer. Currently he is a director of the following other public companies where he also chairs the audit committees: First Solar, Inc., Tiffany & Co., World Fuel Services Corp. and ExamWorks Group Inc. From 2003 to 2009, Mr. Presby was a director of Turbochef Technologies, Inc., where he chaired the audit committee, and from 2005 to 2011 he was a director of American Eagle Outfitters, Inc., where he also served as audit committee chairman. He is a board member of the New York chapter of the National Association of Corporate Directors. He previously served as a trustee of Rutgers University and as a director and chairman of the audit committee of The German Marshall Fund of the USA. He received a B.S. in electrical engineering from Rutgers University and an MBA degree from the Carnegie Mellon University Graduate School of Business. Mr. Presby is a certified public accountant in New York and Ohio and a holder of the NACD Certificate of Director Education.
Directors Continuing in Office — Terms Expiring in 2013
Joseph R. Canion(67) Non-Executive Director
Joseph Canion has served as a non-executive director of our company since 1997 and was a director of a predecessor constituent company (AIM Investments) from 1993 to 1997, when Invesco acquired that entity. Mr. Canion has been a leading figure in the technology industry after co-founding Compaq Computer Corporation in 1982 and serving as its chief executive officer from 1982 to 1991. He also founded Insource Technology Group in 1992 and served as its chairman until September 2006. Mr. Canion received a B.S. and M.S. in electrical engineering from the University of Houston. He is on the board of directors of ChaCha Search, Inc. and is an advisory director of Encore Health Resources and Dynamics, Inc. From 2008 to 2011 he was a member of the board of Auditude.
Edward P. Lawrence(70) Non-Executive Director
Edward Lawrence has served as a non-executive director of our company since October 2004. He was a partner of Ropes & Gray, a Boston law firm, from 1976 to December 2007. He currently is a retired partner of Ropes & Gray and a member of the investment committee of the firm’s trust department. Mr. Lawrence is a graduate of Harvard College and earned a J.D. from Columbia University Law School. He is vice chairman of Partners Health Care System, Inc. From 1995 to 2011 he was a trustee (and chairman from 1999 to 2008) of the Board of the Massachusetts General Hospital and was a trustee of McLean Hospital in Belmont, Massachusetts from 2000 to 2011.
James I. Robertson(54) Senior Managing Director and Head of UK and Continental Europe; Director
James Robertson has served as a member of the Board of Directors of our company since April 2004. He is currently Invesco’s head of UK and Continental Europe. He was head of Operations and Technology from October 2005 to September 2008. He was chief financial officer from April 2004 to October 2005. Mr. Robertson joined our company as director of finance and corporate development for Invesco Global in 1993 and repeated this role for the Pacific division in 1995. Mr. Robertson became managing director of global strategic planning in 1996 and served as chief executive officer of AMVESCAP Group Services, Inc. from 2001 to 2005. He holds an M.A. from Cambridge University and is a Chartered Accountant.
Phoebe A. Wood (58) Non-Executive Director
Ms. Wood has served as a non-executive director of our company since January 2010. She is currently a principal at CompaniesWood and served as Vice Chairman, Chief Financial Officer and in other capacities at Brown-Forman Corporation from 2001 until her retirement in 2008. Prior to Brown-Forman, Ms. Wood was Vice President, Chief Financial Officer and a Director of Propel Corporation (a subsidiary of Motorola) from 2000 to 2001. Previously, Ms. Wood served in various capacities during her tenure at Atlantic Richfield
Company (ARCO) from 1976 to 2000. Ms. Wood currently serves on the Boards of Directors of Leggett & Platt, Incorporated (audit and compensation committees), Coca-Cola Enterprises Inc. (audit and affiliated transaction committees), as well as on the boards of trustees for the University of Louisville, the Gheens Foundation and the American Printing House for the Blind. From 2001 to 2011 Ms. Wood was a member of the board of trustees for Smith College. Ms. Wood received her A.B. degree from Smith College and her M.B.A. from University of California Los Angeles.
Directors Continuing in Office — Terms Expiring in 2014
Rex D. Adams(71) Chairman and Non-Executive Director
Rex Adams became chairman of the company on April 27, 2006. He has served as a non-executive director of our company since November 2001 and as chairman of the Nomination and Corporate Governance Committee since January 2007. Mr. Adams was dean of the Fuqua School of Business at Duke University from 1996 to 2001 following a 30-year career with Mobil Corporation. He joined Mobil International in London in 1965 and served as vice president of administration for Mobil Corporation from 1988 to 1996. Mr. Adams was previously a director and member of the audit committee at Vintage Petroleum. Mr. Adams received a B.A. from Duke University. He was selected as a Rhodes Scholar in 1962 and studied at Merton College, Oxford University. Mr. Adams serves on the Board of Directors of Alleghany Corporation and formerly served as chairman of the Public Broadcasting Service (PBS) and a trustee of Duke University.
Sir John Banham(71) Non-Executive Director
Sir John Banham has served as a non-executive director of our company since 1999 and as chairman of the Compensation Committee since January 2007. Sir John was director general of the Confederation of British Industry from 1987 to 1992, a director of National Power and National Westminster Bank from 1992 to 1998, chairman of Tarmac PLC from 1994 to 2000, chairman of Kingfisher PLC from 1995 to 2001, chairman of Whitbread PLC from 2000 to 2005, chairman of Geest plc from 2002 to 2005 and chairman of Spacelabs Healthcare Inc. from 2005 to 2008. He was the chairman of Johnson Matthey plc from 2006 to 2011. Sir John is a graduate of Cambridge University and has been awarded honorary doctorates by four leading U.K. universities.
Denis Kessler(60) Non-Executive Director
Denis Kessler has served as a non-executive director of our company since March 2002. A noted economist, Mr. Kessler is chairman and chief executive officer of SCOR SE. He is chairman of the Boards of Directors of SCOR GLOBAL LIFE SE and SCOR GLOBAL P&C SE, chairman of the Supervisory Board of SCOR GLOBAL INVESTMENTS SE and serves as a member of the Boards of Directors of BNP Paribas SA, Bollore, Dassault Aviation and Fonds Strategique d’Investissement. He is member of the Supervisory Board of Yam Invest N.V. Mr. Kessler received adiplômefrom the Paris Business School (HEC) andDoctorat d’Etatin economics from the University of Paris.
Director and Nominee Qualifications to Serve on our Board
As described in greater detail below, the Board believes that there are certain minimum qualifications that each director nominee must satisfy in order to be suitable for a position as a director. (See below under the caption “THE NOMINATION AND CORPORATE GOVERNANCE COMMITTEE.”) The Board believes that, consistent with these requirements, each member of our Board displays a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing our company, a willingness to devote the necessary time to Board duties, a commitment to representing the best interests of the company and its shareholders and a dedication to enhancing shareholder value. The Board does not consider individual directors
to be responsible for particular areas of the Board’s focus or specific categories of issues that may come before it. Rather, the Board seeks to assemble a group of directors that, as a whole, represents a mix of experiences and skills that allows appropriate deliberation on all issues that the Board might be likely to consider. Set forth below is a brief description of the particular experience or skills of each director that led the Board to conclude that such person should serve as a director in light of our business and structure.
Rex D. Adams— Mr. Adams has broad international experience in senior management of one of the world’s largest public companies, as well as substantial insight on a variety of business management issues from an academic perspective. His nearly decade of service on our Board has given him a deep understanding of the variety of issues encountered by investment management companies throughout the business cycle.
Sir John Banham— Sir John brings to the Board a very broad appreciation for international business issues garnered over an extraordinary career in a variety of industries, including financial services. Until July 2011 he was chairman of a successful global manufacturing company, one of the most admired public companies in the United Kingdom. As past director general of the Confederation of British Industry, he represented the views of British business to relevant governments and regulators. Sir John’s experience across a substantial spectrum of industries and companies within the United Kingdom gives him unique insight into the needs of our business in one of Invesco’s most significant and successful markets.
Denis Kessler —Mr. Kessler’s experience as an economist and chief executive of a major global reinsurance company have combined to give him valuable insight into both the investment management industry’s macro-economic positioning over the long term as well as our company’s particular challenges within that industry. Further, his experience as a director of a variety of international public companies in several industries has enabled him to provide effective counsel to our board on many issues of concern to our management.
Martin L. Flanagan — Mr. Flanagan has spent over 26 years in the investment management industry, including roles as an investment professional and a series of executive management positions in business integration, strategic planning, investment operations, shareholder services and finance, with over six years spent as a CEO. Mr. Flanagan also obtained extensive financial accounting experience with a major international accounting firm. He also is a Chartered Financial Analyst. Through his decades of involvement, including as past chairman of our industry’s principal trade association, the Investment Company Institute, he has amassed a broad understanding of the larger context of investment management that has guided the Board during many critical junctures.
C. Robert Henrikson — Mr. Henrikson’s nearly 40 years of experience in the financial services industry, which includes diverse positions of increasing responsibility leading to his role as chief executive officer of MetLife, Inc., have provided him with an in-depth understanding of our industry.
Ben F. Johnson, III— Mr. Johnson brings to the Board more than a decade of experience leading one of the largest law firms in Atlanta, Georgia, where Invesco was founded and grew to prominence. His career as one of the region’s leading business litigators has given Mr. Johnson deep experience of the types of business and legal issues that are regularly faced by large public companies such as Invesco.
J. Thomas Presby— Mr. Presby has amassed considerable experience at the highest levels of finance and accounting, having served for three decades as a partner, as well as in positions of senior management (including chief operating officer), at one of the world’s largest accounting firms. In keeping with his experience, Mr. Presby has been sought by leading companies in a variety of industries to chair the audit committee, a role which he also fulfills for Invesco, where he is additionally recognized by the Board as one of our audit committee financial experts as defined under SEC rules.
Joseph R. Canion— Mr. Canion has extensive service as a board member within the investment management industry, having also served as a director of AIM Investments, a leading U.S. mutual fund manager,
from 1991 through 1997 when Invesco acquired AIM. Mr. Canion additionally has notable experience as an entrepreneur, having co-founded a business that grew into a major international technology company. We believe that his experience guiding a company throughout the entirety of its business lifecycle has given him a wide-ranging understanding of the types of issues faced by private and public companies.
Edward P. Lawrence— Mr. Lawrence has over thirty years’ experience as a corporate and business lawyer in a major Boston law firm, which has given him a very substantial understanding of the business issues facing large financial services companies such as Invesco. In particular, Mr. Lawrence specialized in issues arising under the Investment Company Act of 1940 and the Investment Advisers Act of 1940 which provide the Federal legal framework for the company’s U.S. investment fund business. This background gives Mr. Lawrence an understanding of the potential legal ramifications of Board decisions which is particularly valuable to the Board’s functioning on many of the decisions it is called upon to take. As a member of his law firm’s trust investment practice and as member of investment committees of numerous entities, he also has had frequent interaction with investment advisers located throughout the country, giving him an opportunity to view a wide range of investment styles and practices.
James I. Robertson — Mr. Robertson has deep experience of the global fund management industry, having been the head of Invesco corporate development (including strategy and mergers and acquisitions) for Europe and Asia Pacific and then for the company worldwide. He also has a considerable understanding of the operational and finance aspects of our business, having served as head of the finance and operations functions for our European and Asia Pacific businesses before becoming chief financial officer and head of operations for our company. Due to his varied roles within Invesco’s management over the past 19 years, Mr. Robertson has an extensive understanding of many different facets of our organization, which give his participation in our Board’s deliberations significant weight.
Phoebe A. Wood — Ms. Wood has extensive experience as both a director and a member of senior financial management of public companies in a variety of industries. Her significant accounting, financial, and business expertise have made her a particularly valuable addition to our directors’ mix of skills, and she has been designated as one of our audit committee’s financial experts, as defined under SEC rules.
INFORMATION ABOUT THE EXECUTIVE OFFICERS OF THE COMPANY
In addition to Messrs. Flanagan and Robertson, whose information is set forth above, the following is a list of individuals serving as executive officers of the company as of the date of this Proxy Statement. All company executive officers are elected annually by the Board and serve at the discretion of the Board or Chief Executive Officer.
G. Mark Armour(58) Senior Managing Director and Head of Invesco Institutional
Mark Armour has served as senior managing director and head of Invesco Institutional since January 2007. Previously, Mr. Armour served as head of sales and service for Invesco’s institutional operations. He was chief executive officer of Invesco Australia from September 2002 to July 2006. Prior to joining Invesco, Mr. Armour held significant leadership roles in the funds management business in both Australia and Hong Kong. He previously served as chief investment officer for ANZ Investments and spent almost 20 years with the National Mutual/AXA Australia Group, where he was chief executive, Funds Management, from 1998 to 2000. Mr. Armour received a bachelor of economics from La Trobe University in Melbourne, Australia.
Kevin M. Carome(55) Senior Managing Director and General Counsel
Kevin Carome has served as general counsel of our company since January 2006. Previously, he was senior vice president and general counsel of Invesco’s U.S. retail business from 2003 to 2005. Prior to joining Invesco,
Mr. Carome worked with Liberty Financial Companies, Inc. (LFC) in Boston where he was senior vice president and general counsel from August 2000 through December 2001. He joined LFC in 1993 as associate general counsel and, from 1998 through 2000, was general counsel of certain of its investment management subsidiaries. Mr. Carome began his career as an associate at Ropes & Gray in Boston. He received two degrees, a B.S. in political science and a J.D., from Boston College.
Karen Dunn Kelley (51) Senior Managing Director and Head of Invesco Fixed Income, Invesco Global Strategies, Global Equity/FX Trading and Investments
Karen Dunn Kelley is a senior managing director and head of Invesco Fixed Income, Invesco Global Strategies, Global Equity/FX Trading and Investments. Ms. Dunn Kelley joined Invesco in 1989 as a money market portfolio manager. In 1992, she was named chief money market and government officer. In April 2007, she was named head of Invesco’s newly combined fixed income and cash management teams. Ms. Dunn Kelley has been in the investment business since 1982 and began her career at Drexel Burnham Lambert on the Fixed Income High Grade Retail Desk. Ms. Dunn Kelley graduated with a B.S. from Villanova University College of Commerce and Finance.
Andrew T. S. Lo(50) Senior Managing Director and Head of Invesco Asia Pacific
Andrew Lo has served as head of Invesco Asia Pacific since February 2001. He joined our company as managing director for Invesco Asia in 1994. Mr. Lo began his career as a credit analyst at Chase Manhattan Bank in 1984. He became vice president of the investment management group at Citicorp in 1988 and was managing director of Capital House Asia from 1990 to 1994. Mr. Lo was chairman of the Hong Kong Investment Funds Association from 1996 to 1997 and a member of the Council to the Stock Exchange of Hong Kong and the Advisory Committee to the Securities and Futures Commission in Hong Kong from 1997 to 2001. He received a B.S. and an MBA from Babson College in Wellesley, Massachusetts.
Colin D. Meadows(41) Senior Managing Director and Chief Administrative Officer
Colin Meadows has served as chief administrative officer of Invesco since May 2006 with responsibility for business strategy, human resources, and communications. In September 2008 he expanded his role with responsibilities for operations and technology. Mr. Meadows came to Invesco from GE Consumer Finance where he was senior vice president of business development and mergers and acquisitions. Prior to that role, he served as senior vice president of strategic planning and technology at Wells Fargo Bank. From 1996 to 2003, Mr. Meadows was an associate principal with McKinsey & Company, focusing on the financial services and venture capital industries, with an emphasis in the banking and asset management sectors. Mr. Meadows received a B.A. in economics and English literature from Andrews University and a J.D. from Harvard Law School.
Loren M. Starr (50) Senior Managing Director and Chief Financial Officer
Loren Starr has served as senior managing director and chief financial officer of our company since October 2005. His current responsibilities include finance, accounting, investor relations and corporate services. Previously, he served from 2001 to 2005 as senior vice president and chief financial officer of Janus Capital Group Inc., after working as head of corporate finance from 1998 to 2001 at Putnam Investments. Prior to these positions, Mr. Starr held senior corporate finance roles with Lehman Brothers and Morgan Stanley & Co. He received a B.A. in chemistry and B.S. in industrial engineering, from Columbia University, as well as an MBA, also from Columbia, and an M.S. in operations research from Carnegie Mellon University. Mr. Starr is a certified treasury professional. He is a past chairman of the Association for Financial Professionals, and he currently serves on the boards of Georgia Leadership Institute for School Improvement (GLISI) and the Georgia Council for Economic Education (GCEE).
Philip A. Taylor(57) Senior Managing Director and Head of North American Retail
Philip Taylor became head of Invesco’s North American retail business in 2006. He had previously served as chief executive officer of Invesco Canada since 2002. He joined Invesco Canada in 1999 as senior vice president of operations and client services and later became executive vice president and chief operating officer. Mr. Taylor was president of Canadian retail broker Investors Group Securities and co-founder and managing partner of Meridian Securities, an execution and clearing broker. He held various management positions with Royal Trust, now part of Royal Bank of Canada. Mr. Taylor began his career in consumer brand management in the U.S. and Canada with Richardson-Vicks, now part of Procter & Gamble. He received a Bachelor of Commerce (honours) degree from Carleton University and an MBA from the Schulich School of Business at York University. Mr. Taylor is a member of the Dean’s Advisory council of the Schulich School of Business. He has been chair of the Toronto Symphony Orchestra and is currently on the board of the Royal Conservatory of Music.
Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines (“Guidelines”) and Terms of Reference for our chairmanChairman and chief executive officer,for our Chief Executive Officer, each of which is available in the corporate governance section of the company’s Web site atwww.invesco.com(the “company’s Web site”). The Corporate Governance Guidelines set forth the practices the Board follows with respect to, among other matters, the composition of the Board, director responsibilities, Board committees, director access to officers, employees and independent advisors, director compensation and performance evaluation of the Board.
Board Leadership Structure. As described in the Guidelines, the company’s business is conducted day-to-day by its officers, managers and employees, under the direction of the chief executive officerChief Executive Officer and the oversight of the Board, to enhance the long-term value of the company for its shareholders. The Board is elected by the shareholders to oversee our management team and to assure that the long-term interests of the shareholders are being served. In light of these differences in the fundamental roles of the Board and management, the company has chosen to separate the chief executive officerChief Executive Officer and Board chairman positions. The separation of these roles: (i) allows the Board to more effectively monitor and objectively evaluate the performance of the chief executive officer,Chief Executive Officer, such that the chief executive officerChief Executive Officer is more likely to be held accountable for his performance, (ii) allows the non-executive chairman to control the Board’s agenda and information flow, and (iii) creates an atmosphere in which other directors are more likely to challenge the chief executive officerChief Executive Officer and other members of our senior management team. For these reasons, the company believes that this board leadership structure is currently the most appropriate structure for the company. Nevertheless, the Board may reassess the appropriateness of the existing structure at any time, including following changes in board composition, in management, or in the character of the company’s business and operations.
Code of Conduct and Directors’Directors Code of Conduct. As part of our ethics and compliance program, our Board has approved a code of ethics (the “Code of Conduct”) that applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions, as well as to our other officers and employees. The Code of Conduct is posted on our company’s Web site. In addition, we have adopted a separate Directors’ Code of Conduct that applies to all members of the Board. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Conduct for our principaldirectors and executive officer, principal financial officer and principal accounting officerofficers by posting such information on our Web site. In addition, we have adopted a separate Directors’ Code of Conduct that applies to all members of the Board. The company maintains a compliance reporting line, where employees and individuals outside the company can anonymously submit a complaint or concern regarding compliance with applicable laws, rules or regulations, the Code of Conduct, as well as accounting, auditing, ethical or other concerns.
Board’s Role in Risk Oversight.The Board has principal responsibility for oversight of the company’s risk management processes and for understanding the overall risk profile of the company. Though Board committees
routinely address specific risks and risk processes within their purview, the Board has not delegated primary risk oversight responsibility to a committee.
Our risk management framework provides the basis for consistent and meaningful risk dialogue up, down and across the company. Our Global Performance Measurement and Risk group assesses core investment risks. Our Corporate Risk Management Committee assesses strategic, operational and all other business risks. A network of business unit, functional and geographic risk management committees under the auspices of the Corporate Risk Management Committee maintains an ongoing risk assessment process that provides a bottom-up perspective on the specific risk areas existing in various domains of our business.
At each Board meeting, the Board reviews and discusses with senior management information pertaining to risk provided by the Global Performance Measurement and Risk group and the Corporate Risk Management Committee. In these sessions senior management reviews and discusses with the Board the salientmost significant risks facing the company. The Board has also reviewed and approved risk tolerance
guidelines. By receiving these regular reports, the Board maintains a practical understanding of the risk philosophy and risk tolerance of the company. Through this regular and consistent risk communication, the Board has reasonable assurance that all material risks of the company are being addressed and that the company is propagating a risk-aware culture in which effective risk management is built into the fabric of the business.
The Board, with the assistance of the Compensation Committee has evaluated our compensation policies and practices for all employees and has concluded that such policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company. In reaching this conclusion, we undertook the following process to evaluate our compensation policies and practices:
• | A working group comprised of representatives from our |
Members of the group then reviewed each of Invesco’s compensation plans (formulaic bonus payment plans for investment professionals, equity-based plans, and sales commission plans), applying the established framework. Each item was assessed and classified as “low risk potential,” “medium risk potential” or “high risk potential.”
After reviewing each item and the cumulative assessment for each plan, the working group determined to recommendreported to Invesco’s Compensation Committee its conclusionfindings that none of our compensation policies or practices were reasonably likely to have a material adverse effect on the Company.
These results were summarized and presented to theThe Compensation Committee which in turn recommended this finding to the Board.
The Board reviewed the recommendation of the Compensation Committeethese findings and concluded that none of Invesco’s compensation policies or practices were reasonably likely to have a material adverse effect on the Company.
The Audit Committee routinely receives reports from the control functions of finance, legal and compliance and internal audit. The Head of Internal Audit reports to the Chairman of the Audit Committee. The Audit Committee oversees the internal audit function’s planning and resource allocation in a manner designed to ensure testing of controls and other Internal Audit activities are appropriately prioritized in a risk-based manner. The Audit Committee also seeks to assure that appropriate risk-based inputs from management and internal audit are communicated to the company’s independent public auditors.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEESInformation about the Board and Its Committees
BOARD MEETINGS AND ANNUAL GENERAL MEETING OF SHAREHOLDERSBoard Meetings and Annual General Meeting of Shareholders
During the calendar year ended December 31, 2011,2013, the Board held ten meetings (not including committee meetings). Each director attended at least seventy-five percent (75%) of the aggregate of the total number of meetings held by the Board and the total number of meetings held by all committees of the Board on which he or she served during 2011.2013. The Board does not have a formal policy regarding Board member attendance at shareholder meetings. AllEight of our ten directors then in office attended the 2011 annual general meeting.2013 Annual General Meeting. Those not attending the meeting were unable to be present due to travel schedules. The non-executive directors (those directors who are not officers or employees of the company) meet in executive session at least once per year during a regularly scheduled Board meeting without management. Rex D. Adams, a non-executive and independent director, presides at the executive sessions of the non-executive directors. As previously announced, the Board has elected Ben F. Johnson III to serve as Chairman of the Board following the expiration of the term of Mr. Adams at the conclusion of this year’s Annual General Meeting.
COMMITTEE MEMBERSHIP AND MEETINGSCommittee Membership and Meetings
The current committees of the Board are the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee. The table below provides current membership information.
Name | Audit | Compensation | Nomination and Corporate Governance | |||||||||
Rex D. Adams (1) | — | M | C | |||||||||
Sir John Banham (1) | M | C | ||||||||||
| M | |||||||||||
Joseph R. | — | — | M | |||||||||
Martin L. Flanagan | — | — | — | |||||||||
C. Robert | M | M | M | |||||||||
Ben F. Johnson III(2) | M | M | M | |||||||||
| ||||||||||||
Denis Kessler | M | M | M | |||||||||
Edward P. Lawrence | M | M | M | |||||||||
J. Thomas Presby | C | — | M | |||||||||
G. Richard Wagoner, Jr. | M | |||||||||||
| M | |||||||||||
Phoebe A. Wood | M | M | M |
M — Member
C — Chairman
(1) | Neither Mr. Adams nor Sir John Banham has been nominated for re-election at the 2014 Annual General Meeting because each has reached the mandatory retirement age. The Board has appointed Mr. Canion to serve as Chairman of the Nomination and Corporate Governance Committee and Mr. Henrikson to serve as Chairman of the Compensation Committee following the expiration of the terms of Mr. Adams and Sir John Banham at the conclusion of this year’s Annual General Meeting. |
(2) | The Board has appointed Mr. Johnson to serve as Chairman of the Board following the expiration of the term of Mr. Adams at the conclusion of this year’s Annual General Meeting. |
Below is a description of each committee of the Board. The Board has affirmatively determined that each committee consists entirely of independent directors pursuantaccording to applicable NYSE rules established by the NYSE and rules promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
THE AUDIT COMMITTEEThe Audit Committee
The Audit Committee is chaired by Mr. Presby and consists additionally of Messrs. Banham, Henrikson, Johnson, Kessler, and Lawrence, Wagoner and Ms. Wood. The committee met eleventwelve times during 2011.2013. (The frequency of the committee’s meetings is due to its practice of separately considering certain matters, such as pre-filing review of quarterly reports, among others, in order to devote ample time for discussion and consideration.) Under its charter, the committee:
is comprised of at least three members of the Board, each of whom is “independent” of the company under the NYSE and SEC rules of the Securities and Exchange Commission (“SEC”) and is also “financially literate,” as defined under NYSE rules,
members are appointed and removed by the Board,
is required to meet at least quarterly,
periodically meets with the head of Internal Audit and the independent auditor in separate executive sessions without members of senior management present,present;
has the authority to retain independent advisors, at the company’s expense, wherever it deems appropriate to fulfill its duties,duties; and
reports to the Board regularly.
The committee’s charter is available on the company’s Web site. The charter sets forth the committee’s responsibilities, which include:
include, among other items, assisting the Board in fulfilling its responsibility to oversee the company’s financial reporting, auditing and internal control activities, including the integrity of the company’s financial statements
compliance with legal and regulatory requirements,
evaluating the independent auditor’s qualifications and independence and the performance of the company’s internal audit function and independent auditor,
making recommendations to the shareholders regarding the appointment of the independent auditor and for pre-approval of its engagement to provide any audit or permitted non-audit services under agreed policies and procedures,
establishing hiring policies for current or former employees of its independent auditor,
annually reviewing the independent auditor’s report and evaluating its qualifications, performance and independence,
monitoring and reviewing the effectiveness of the company’s internal audit function,
reviewing and discussing with management and the independent auditor (i) the company’s audited financial statements and related disclosures, (ii) its earnings press releases and periodic filings, (iii) its critical accounting policies, (iv) the quality and adequacy of its internal controls over financial reporting, disclosure controls and procedures, and accounting procedures, and (v) any audit problems or difficulties,
assisting the Board in overseeing the company’s legal and regulatory compliance, andcompliance.
preparing the annual report of the Audit Committee presented in the company’s proxy statement.
The committee has adopted policies and procedures for pre-approving all audit and non-audit services provided by our independent auditors. The policy is designed to ensure that the auditor’s independence is not impaired. The policy provides that, before the company engages the independent auditor to render any service, the engagement must either be specifically approved by the Audit Committee or fall into one of the defined categories that have been pre-approved. (See the section of this Proxy Statement below entitled “PRE-APPROVAL PROCESS AND POLICY.“Pre-Approval Process and Policy” below.)
The Board has determined that all committee members are financially literate under the NYSE listing standards. The Board has further determined that each of Mr. Presby and Ms. Wood qualifies as an “audit committee financial expert” (as defined under the SEC’s rules and regulations), that each has “accounting or related financial management expertise” and that each is “independent” of the company under SEC rules and the NYSE listing rules. The Board has also determined that Mr. Presby’s service on the audit committees of more than three public companies does not impair his ability to effectively serve on the Audit Committee.
THE COMPENSATION COMMITTEEThe Compensation Committee
The Compensation Committee is chaired by Sir John Banham and consists additionally of Messrs. Adams, Henrikson, Johnson, Kessler, Lawrence, Wagoner and Ms. Wood. The committee met six times during 2011.2013. As previously discussed, Mr. Henrikson has been appointed as chairman of the committee effective upon the close of the 2014 Annual General Meeting. Under its charter, the committee:
is comprised of at least three members of the Board, each of whom is “independent” of the company under the NYSE and SEC rules,rules;
members are appointed and removed by the Board,
is required to meet at least quarterly,four times annually; and
has the authority to retain independent advisors, at the company’s expense, wherever it deems appropriate to fulfill its duties, including any compensation consulting firm.
The committee’s charter is available on the company’s Web site. The charter sets forth the committee’s responsibilities, which include:
annually overseeing the establishment of goals and objectives related to the chief executive officer’s compensation, evaluating the performance of the chief executive officer and determining the amount of his compensation,
reviewing and making recommendations to the Board concerning the company’s overall compensation philosophy,
include, among other items, annually approving the compensation structure for, and reviewing and approving the compensation of, senior officers and non-executive directors, and overseeing the annual process for evaluating theirsenior officer performance,
overseeing the administration of the company’s equity-based and other incentive compensation plans,
and assisting the Board with executive succession planning,planning.
determining the compensation, including deferred compensation arrangements, for the company’s non-executive directors,
preparing the annual report on executive officer compensation for the company’s proxy statement,
reviewing and discussing with management the proposed Compensation Discussion and Analysis disclosure, and
determining whether to recommend the Compensation Discussion and Analysis disclosure to the Board for inclusion in the company’s proxy statement.
Each year the committee engages a third-party compensation consultant to provide an analysis of, and counsel on, the company’s executive compensation program and practices. The nature and scope of the consultant’s assignment is set by the committee. The committee currently engages Johnson Associates, Inc. (“Johnson Associates”) as its third-party consultant for this review. The committee has considered various factors as required by NYSE rules as to whether the work of Johnson Associates with respect to executive and director compensation-related matters raised any conflict of interest. The committee has determined no conflict of interest was raised by the engagement of Johnson Associates. For a more detailed discussion of the determination of executive compensation and the role of the third-party compensation consultant, please see the section of this Proxy Statement below entitled “EXECUTIVE COMPENSATION“Executive Compensation — Compensation Discussion and Analysis.Analysis” below.
The committee meets at least annually to review and determine the compensation of the company’s non-executive directors. In reviewing and determining non-executive director compensation, the Committeecommittee considers, among other things, the following policies and principles:
that the compensation should fairly pay the non-executive directors for the work, time commitment and efforts required by directors of an organization of the company’s size and scope of business activities, including service on Board committees;
that a component of the compensation should be designed to align the non-executive directors’ interests with the long-term interests of the company’s shareholders; and
that non-executive directors’ independence may be compromised or impaired for Board or committee purposes if director compensation exceeds customary levels.
As a part of its review, the committee periodically engages Johnson Associates as a third-party consultant to report on comparable non-executive director compensation practices and levels. No executive officer of the company is
involved in determining or recommending non-executive director compensation levels. See the section of this Proxy Statement entitled “DIRECTOR COMPENSATION”“Director Compensation” below, for a more detailed discussion of compensation paid to the company’s directors during 2011.2013.
THE NOMINATION AND CORPORATE GOVERNANCE COMMITTEEThe Nomination and Corporate Governance Committee
The Nomination and Corporate Governance Committee is chaired by Mr. Adams and consists additionally of Messrs. Banham, Canion, Henrikson, Johnson, Kessler, Lawrence, Presby, Wagoner and Ms. Wood. As previously discussed, Mr. Canion has been appointed as chairman of the committee effective upon the close of the 2014 Annual General Meeting. The committee met five times during 2011.2013. Under its charter, the committee:
is comprised of at least three members of the Board, each of whom is “independent” of the company under the NYSE and SEC rules,
members are appointed and removed by the Board,
is required to meet at least quarterly,quarterly; and
has the authority to retain independent advisors, at the company’s expense, whenever it deems appropriate to fulfill its duties.
The committee’s charter is available on the company’s Web site. The charter sets forth the committee’s responsibilities, which include:
establishing a policy setting forth the specific, minimum qualifications that the committee believes must be met by a nominee recommended for a position on the Board, and describing any specific qualities or skills that the committee believes are necessary for one or more of the directors to possess. Such qualifications include, the requirements under NYSE and SEC rules, as well as consideration of the individual skills, experience and perspectives that will help create an effective Board,
among other items, establishing procedures for identifying and evaluating potential nominees for director and for recommending to the Board potential nominees for election. Candidates for election to the Board are considered in light of their background and experience using the extensive personal knowledge of current directors or through the recommendations of various advisors to the company, and
periodically reviewing and reassessing the adequacy of the Guidelines to determine whether any changes are appropriate and recommending any such changes to the Board for its approval.
The candidates proposed for election in Proposal No. 12 of this Proxy Statement were unanimously recommended by the committee to the Board.
The committee believes there are certain minimum qualifications that each director nominee must satisfy in order to be suitable for a position on the Board, including that such nominee:
In considering candidates for director nominee, the committee generally assembles all information regarding a candidate’s background and qualifications, evaluates a candidate’s mix of skills and qualifications
and determines the contribution that the candidate could be expected to make to the overall functioning of the Board, giving due consideration to the Board balance of diversity of perspectives, backgrounds and experiences. While the committee routinely considers diversity as a part of its deliberations, it has no formal policy regarding diversity. With respect to current directors, the committee considers past participation in and contributions to the activities of the Board. The committee recommends director nominees to the Board based on its assessment of overall suitability to serve in accordance with the company’s policy regarding nominations and qualifications of directors.
The committee will consider candidates recommended for nomination to the Board by shareholders of the company. Shareholders may nominate candidates for election to the Board under Bermuda law and our Bye-Laws. Under our Bye-Laws, notice of such a proposal must generally be provided to the Company Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual general meeting. In addition, our Bye-Laws contain additional requirements applicable to any shareholder nomination, including a description of the information that must be included with any such proposal. For further information regarding deadlines for shareholder proposals, please see the section of this proxy statement below entitled “ADDITIONAL INFORMATION — Shareholder Proposals for the 2013 Annual General Meeting.” The manner in which the committee evaluates candidates recommended by shareholders would be generally the same as any other candidate. However, the committee would also seek and consider information concerning any relationship between a shareholder recommending a candidate and the candidate to determine if the candidate can represent the interests of all of the shareholders. The committee would not evaluate a candidate recommended by a shareholder unless the shareholder’s proposal provides that the potential candidate has indicated a willingness to serve as a director, to comply with the expectations and requirements for Board service as publicly disclosed by the company and to provide all of the information necessary to conduct an evaluation.
The committee believes there are certain minimum qualifications that each director nominee must satisfy in order to be suitable for a position on the Board, including:
a high degree of personal and professional integrity;
the ability to exercise sound business judgment on a broad range of issues;
sufficient experience and professional or educational background to have an appreciation of the significant issues facing public companies that are comparable to the company;
a willingness to devote the necessary time to Board duties, including preparing for and attending meetings of the Board and its committees; and
being prepared to represent the best interests of the company and its shareholders and being committed to enhancing shareholder value generally.
In considering candidates for director nominee, the committee generally assembles all For further information regarding a candidate’s background and qualifications, evaluates a candidate’s mix of skills and qualifications and determinessuch deadlines for shareholder proposals, see “Important Additional Information — Shareholder Proposals for the contribution that the candidate could be expected to make to the overall functioning of the Board, giving due consideration to the Board balance of diversity of perspectives, backgrounds and experiences. While the committee routinely considers diversity as a part of its deliberations, it has no formal policy regarding diversity. With respect to current directors, the committee considers past participation in and contributions to the activities of the Board. The committee recommends director nominees to the Board based on its assessment of overall suitability to serve in accordance with the company’s policy regarding nominations and qualifications of directors.2015 Annual General Meeting” below.
DIRECTOR COMPENSATIONDirector Compensation
Directors who are Invesco employees do not receive compensation for their services as directors. TheUnder the terms of its charter, the Compensation Committee annually reviews and determines the compensation paid to non-executive directors. Directors do not receive any meeting or attendance fees.
The Compensation Committee approved the following fee arrangements for non-executive directors for 2011:2013, with each fee component to be paid in quarterly installments in arrears:
Basic Cash Fee |
|
Chairman Fee | In lieu of the above basic cash fee, the Chairman of the Board receives an annual cash fee of $400,000. |
Basic Shares Fee | Non-executive directors also receive an annual award of shares in the aggregate amount of $95,000. Such shares are paid in arrears in four quarterly installments of $23,750. Each installment is issued on the second business day following the public announcement of the company’s quarterly earnings results. (By way of example, the installment for the fourth quarter is issued in the first quarter of the following year after publication of the earnings release for the fourth quarter.) | |||
Audit Committee Chairman | The chairman of the Audit Committee receives an additional annual cash fee of $50,000. |
Compensation and Nomination and Corporate Governance Committee Chairmen | The chairman of the Compensation Committee and the chairman of the Nomination and Corporate Governance Committee each receive an additional annual cash fee of $15,000. |
Director Fees PaidWe also reimburse each of our non-executive directors for their travel expenses incurred in Shares — Eachconnection with attendance at Board of Directors and committee meetings.
Following a review of current market practices for directors of peer public companies, the Compensation Committee determined in December 2013 that the basic shares fee for non-executive director also receivesdirectors will increase to an annual award of shares in the aggregate amount of $95,000. Such$145,000, with such shares are paidto be issued in arrears in four quarterly installments of $23,750. Each installment is paid on the second business day following the public announcement of the company’s quarterly earnings results. (By way of example, the payment for the fourth quarter is paid in the first quarter of the following year after publication of the earnings release for the fourth quarter.)
The Compensation Committee determined in December 2011 that directorsan amount equal to $36,250. All other fees will remain the same for 2012.
Stock Ownership Policy for Non-Executive Directors— All shares awardedgranted to our non-executive directors are subject to the Non-Executive Director Stock Ownership Policy, which was adopted by the Board of Directors in December 2010.Policy. The policy generally requires each non-executive director to achieve an ownership level of at least 18,000 shares within seven years of the later of the effective date of the policy and the date of such director’s first appointment as a non-executive director. Until such ownership level is achieved, each non-executive director is generally required to continue to hold 100% of the shares received as compensation from the company prior to the policy’s effective date and to retain at least 50% of all shares received as compensation from the company following such date.enactment of the ownership policy.
AsThe following table shows as of December 31, 2011, all2013 the status of our non-executive directors other than Mr. Johnson and Ms. Wood had exceededmeeting the share ownership requirement. It is anticipated that Mr. Johnson and Ms. Wood will attainrequirements of the share ownership goal in two and three years, respectively. Mr. Henrikson became a non-executive director effective January 1, 2012, and it is anticipated that he will attain the required share ownership level within seven years of his appointment.policy.
Name | Year Service Commenced | Total Shares Held (#) | Share Ownership Goal Met (1) | |||
Rex D. Adams | 2001 | 65,821 | ü | |||
Sir John Banham | 1999 | 18,390 | ü | |||
Joseph R. Canion | 1997 | 36,393 | ü | |||
C. Robert Henrikson | 2012 | 6,349 | ||||
Ben F. Johnson III | 2009 | 18,371 | ü | |||
Denis Kessler | 2002 | 30,615 | ü | |||
Edward P. Lawrence | 2004 | 28,868 | ü | |||
J. Thomas Presby | 2005 | 22,091 | ü | |||
G. Richard Wagoner, Jr. | 2013 | 5,000 | ||||
Phoebe A. Wood | 2010 | 15,433 |
(1) | Based on current compensation levels, it is anticipated that Messrs. Henrikson and Wagoner and Ms. Wood will attain their share ownership goal within the time period prescribed by the policy. |
Director Compensation Table for 20112013
The following table sets forth the compensation paid to our non-executive directors for services during 2011.2013.
Name | Fees Earned or Paid in Cash ($)(1) | Share Awards ($)(2) | Total ($) | Fees Earned or Paid in Cash ($)(1) | Share Awards ($)(2) | Total ($) | ||||||||||||
Rex D. Adams | 415,000 | 94,968 | 509,968 | 415,000 | 94,925 | 509,925 | ||||||||||||
Sir John Banham | 135,000 | 94,968 | 229,968 | 135,000 | 94,925 | 229,925 | ||||||||||||
Joseph R. Canion | 120,000 | 94,968 | 214,968 | 120,000 | 94,925 | 214,925 | ||||||||||||
Ben F. Johnson, III | 120,000 | 94,968 | 214,968 | |||||||||||||||
C. Robert Henrikson | 120,000 | 94,925 | 214,925 | |||||||||||||||
Ben F. Johnson III | 120,000 | 94,925 | 214,925 | |||||||||||||||
Denis Kessler | 120,000 | 94,968 | 214,968 | 120,000 | 94,925 | 214,925 | ||||||||||||
Edward P. Lawrence | 120,000 | 94,968 | 214,968 | 120,000 | 94,925 | 214,925 | ||||||||||||
J. Thomas Presby | 170,000 | 94,968 | 264,968 | 170,000 | 94,925 | 264,925 | ||||||||||||
G. Richard Wagoner, Jr. (3) | - | - | - | |||||||||||||||
Phoebe A. Wood | 120,000 | 94,968 | 214,968 | 120,000 | 94,925 | 214,925 |
(1) | Includes the annual basic fee and, as applicable, Chairman of the Board fee and committee chairman fees. |
(2) | Reflects the grant date fair value for each share award. Share awards are 100% vested as of the date of grant. |
(3) | Mr. Wagoner joined our Board in October 2013 and did not receive any compensation in 2013. |
The following table presents the grant date fair value for each share award made to each non-executive director during 2011.2013.
Name | Date of Grant 1/28/11 ($) | Date of Grant 4/28/11 ($) | Date of Grant 7/27/11 ($) | Date of Grant 10/25/11 ($) | Total Grant ($) | Date of Grant 2/1/13 ($) | Date of Grant 5/1/13 ($) | Date of Grant 8/1/13 ($) | Date of Grant 11/1/13 ($) | Total Grant ($) | ||||||||||||||||||||
Rex D. Adams | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | ||||||||||||||||||||
Sir John Banham | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | ||||||||||||||||||||
Joseph R. Canion | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | ||||||||||||||||||||
Ben F. Johnson, III | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | |||||||||||||||||||||||||
C. Robert Henrikson | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | |||||||||||||||||||||||||
Ben F. Johnson III | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | |||||||||||||||||||||||||
Denis Kessler | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | ||||||||||||||||||||
Edward P. Lawrence | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | ||||||||||||||||||||
J. Thomas Presby | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 | ||||||||||||||||||||
G. Richard Wagoner, Jr. (1) | - | - | - | - | - | |||||||||||||||||||||||||
Phoebe A. Wood | 23,749 | 23,746 | 23,729 | 23,744 | 94,968 | 23,743 | 23,737 | 23,723 | 23,722 | 94,925 |
(1) | Mr. Wagoner joined our Board in October 2013 and did not receive any compensation in 2013. |
The aggregate number of share awards outstanding atas of December 31, 20112013 for each of our non-executive directors was as follows:
Name | Shares Outstanding | Deferred Shares Outstanding | Total Share Awards Outstanding | Shares Outstanding (#) | Deferred Shares Outstanding (#) |
Total Share Awards | ||||||||||||
Rex D. Adams | 22,482 | 22,482 | 29,536 | 29,536 | ||||||||||||||
Sir John Banham | 22,414 | 22,414 | 16,993 | 16,993 | ||||||||||||||
Joseph R. Canion | 22,414 | 5,925 | (1) | 28,339 | 29,468 | 5,925 | 35,393 | |||||||||||
Ben F. Johnson, III | 11,317 | 11,317 | ||||||||||||||||
C. Robert Henrikson | 6,021 | 6,021 | ||||||||||||||||
Ben F. Johnson III | 18,371 | 18,371 | ||||||||||||||||
Denis Kessler | 22,461 | 22,461 | 29,515 | 29,515 | ||||||||||||||
Edward P. Lawrence | 22,414 | 22,414 | 28,868 | 28,868 | ||||||||||||||
J. Thomas Presby | 19,537 | 19,537 | 22,091 | 22,091 | ||||||||||||||
G. Richard Wagoner, Jr. (2) | - | - | ||||||||||||||||
Phoebe A. Wood | 7,536 | 7,536 | 14,590 | 14,590 |
(1) | For Mr. Canion, represents deferred shares awarded under our legacy Deferred Fees Share Plan. |
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
The following table sets forth the common shares beneficially owned as of March 30, 2012 by each shareholder known to us to beneficially own more than five percent of the company’s outstanding common shares. The percentage of ownership indicated in the following table is based on 445,969,597 common shares outstanding as of December 31, 2011.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class | ||||||
T. Rowe Price Associates, Inc., 100 E. Pratt Street, Baltimore, Maryland 21202 | 31,598,121 | (2) | 7.1 | % | ||||
Viking Global Investors LP, 55 Railroad Avenue, Greenwich, CT 06830 | 26,292,742 | (3) | 5.9 | % | ||||
Wellington Management Company, LLP, 280 Congress Street, Boston, MA 02210 | 23,479,968 | (4) | 5.3 | % |
(2) |
SECURITY OWNERSHIP OF MANAGEMENT
The following table lists the common shares beneficially owned as of December 31, 2011 by (1) each director and director nominee, (2) each executive officer named in the Summary Compensation Table below, and (3) all current directors, director nominees and executive officers as a group. The percentage of ownership indicated in the following table is based on 445,969,597 of the company’s common shares outstanding on December 31, 2011.
Beneficial ownership reported in the below table has been determined according to SEC regulations and includes common shares that may be acquired within 60 days after December 31, 2011, upon the exercise of outstanding share options, but excludes deferred shares which are disclosed in a separate column. Unless otherwise indicated, all directors, director nominees and executive officers have sole voting and investment power with respect to the shares shown. No shares are pledged as security. As of December 31, 2011, no individual director, director nominee or named executive officer owned beneficially 1% or more of our common shares, and our directors, director nominees and executive officers as a group owned approximately 1.95% of our common shares outstanding.
Common Shares Beneficially Owned | ||||||||||||||||
Name | Owned Shares | Share Options | Deferred Share Awards(1) | Total | ||||||||||||
Rex D. Adams | 54,675 | — | — | 54,675 | ||||||||||||
Sir John Banham | 26,164 | — | — | 26,164 | ||||||||||||
Joseph R. Canion | 23,414 | — | 5,925 | 29,339 | ||||||||||||
Martin L. Flanagan(2) | 3,547,142 | — | — | 3,547,142 | ||||||||||||
C. Robert Henrikson(3) | 328 | — | — | 328 | ||||||||||||
Ben F. Johnson, III | 11,317 | — | — | 11,317 | ||||||||||||
Denis Kessler | 23,561 | — | — | 23,561 | ||||||||||||
Edward P. Lawrence | 22,414 | — | — | 22,414 | ||||||||||||
J. Thomas Presby(4) | 19,537 | — | — | 19,537 | ||||||||||||
James I. Robertson(5) | 757,250 | 125,000 | 333,471 | 1,215,721 | ||||||||||||
Phoebe A. Wood(6) | 7,738 | — | — | 7,738 | ||||||||||||
G. Mark Armour | 68,388 | — | 349,719 | 418,107 | ||||||||||||
Loren M. Starr | 427,458 | — | — | 427,428 | ||||||||||||
Philip A. Taylor | 310,818 | 44,700 | 346,472 | 701,990 | ||||||||||||
All Directors and Executive Officers as a Group (18 persons) | 6,961,097 | 407,475 | 1,342,449 | 8,711,021 |
EXECUTIVE COMPENSATIONInformation about
Compensation Discussionthe Executive Officers of the Company
In addition to Martin Flanagan, whose information is set forth above, the following is a list of individuals serving as executive officers of the company as of the date of this Proxy Statement. All company executive officers are elected annually by the Board and Analysis
serve at the discretion of the Board or our Chief Executive SummaryOfficer.
Director and Head of EMEA |
| |
Senior Managing Director and General Counsel | Kevin Carome (57) has served as general counsel of our company since January 2006. Previously, he was senior vice president and general counsel of Invesco’s U.S. retail business from 2003 to 2005. Prior to joining Invesco, Mr. Carome worked with Liberty Financial Companies, Inc. (LFC) in Boston where he was senior vice president and general counsel from August 2000 through December 2001. He joined LFC in 1993 as associate general counsel and, from 1998 through 2000, was general counsel of certain of its investment management subsidiaries. Mr. Carome began his career as an associate at Ropes & Gray in Boston. He earned two degrees, a B.S. in political science and a J.D., from Boston College. He is a trustee of the U.S. Powershares ETFs and a director of ICI Mutual Insurance Company, the investment management industry captive insurer. | |
Senior Managing Director, Investments | Karen Dunn Kelley (53) has served as senior managing director, Investments, since 2011. Ms. Dunn Kelley joined Invesco in 1989 as a money market portfolio manager. In 1992, she was named chief money market and government officer. In April 2007, she was named head of Invesco’s newly combined fixed income and cash management teams. Ms. Dunn Kelley has been in the investment business since 1982 and began her career at Drexel Burnham Lambert on the Fixed Income High Grade Retail Desk. Ms. Dunn Kelley graduated with a B.S. from Villanova University College of Commerce and Finance. |
Senior Managing Director and Head of Invesco Asia Pacific | Andrew T. S. Lo (52) has served as head of Invesco Asia Pacific since February 2001. He joined our company as managing director for Invesco Asia in 1994. Mr. Lo began his career as a credit analyst at Chase Manhattan Bank in 1984. He became vice president of the investment management group at Citicorp in 1988 and was managing director of Capital House Asia from 1990 to 1994. Mr. Lo was chairman of the Hong Kong Investment Funds Association from 1996 to 1997 and a member of the Council to the Stock Exchange of Hong Kong and the Advisory Committee to the Securities and Futures Commission in Hong Kong from 1997 to 2001. He earned a B.S. and an MBA from Babson College in Wellesley, Massachusetts. | |
Senior Managing Director and Chief Administrative Officer | Colin Meadows (43) has served as chief administrative officer of Invesco since May 2006 with responsibility for business strategy, human resources, and communications. In September 2008 he expanded his role with responsibilities for operations and technology. Mr. Meadows came to Invesco from GE Consumer Finance where he was senior vice president of business development and mergers and acquisitions. Prior to that role, he served as senior vice president of strategic planning and technology at Wells Fargo Bank. From 1996 to 2003, Mr. Meadows was an associate principal with McKinsey & Company, focusing on the financial services and venture capital industries, with an emphasis in the banking and asset management sectors. Mr. Meadows earned a B.A. in economics and English literature from Andrews University and a J.D. from Harvard Law School. | |
Senior Managing Director and Chief Financial Officer | Loren Starr (52) has served as senior managing director and chief financial officer of our company since October 2005. His current responsibilities include finance, accounting, investor relations and corporate services. Previously, he served from 2001 to 2005 as senior vice president and chief financial officer of Janus Capital Group Inc., after working as head of corporate finance from 1998 to 2001 at Putnam Investments. Prior to these positions, Mr. Starr held senior corporate finance roles with Lehman Brothers and Morgan Stanley & Co. He earned a B.A. in chemistry and B.S. in industrial engineering, from Columbia University, as well as an MBA from Columbia, and an M.S. in operations research from Carnegie Mellon University. Mr. Starr is a certified treasury professional. He is a past chairman of the Association for Financial Professionals, and he currently serves on the boards of Georgia Leadership Institute for School Improvement (GLISI), the Georgia Council for Economic Education (GCEE) and the | |
Director and Head of the | ||
|
Compensation Discussion and Analysis
In addition to discussions with our shareholders, the committee implemented the following improvements to our compensation programs:
• adopted equity award vesting provisions based on achievement of targeted financial measures for a portion of the 2011 long-term incentive awards to executive officers, as described in detail below;
• greatly enhanced the disclosure of our prudent and longstanding process by which compensation decisions for executive officers are made by the committee; and
• adopted a “clawback” policy applicable to our executive officers’ long-term equity awards subject to achievement of targeted financial results, as described in detail below, which permits the company to recover compensation based on fraudulent or willful misconduct.
This section presents a discussion and analysis of the philosophy and objectives of our Board’s Compensation Committee (the “committee”) in designing and implementing compensation programs for our executive officers. In addition, this section describes and analyzes the 2013 compensation determinations relating to our Chief Executive Officer, Chief Financial Officer, and the next three most highly compensated executive officers (our “named executive officers” or “NEOs”).
30% of each executive officer’s 2011 long-term equity award is subject to vesting only if certain financial measures are achieved during the award’s vesting periods
Executive Summary
2013 Performance Highlights
27.7% Increase in Annual Adjusted Operating Income* | 39.7% Annual Adjusted Operating Margin* | $34.4 billion Assets Under Management Total Net Inflows | 29.1% Increase in Annual Adjusted Diluted EPS* | $850 million Total 2013 Return of Capital to Shareholders |
*Note regarding Non-GAAP Financial Measures: The adjusted financial measures are all non-GAAP financial measures. See the information on page 53 through 58 of our Annual Report on Form 10-K for the fiscal year 2013 for a presentation of, and reconciliation to, the most directly comparable GAAP measures. All current and prior period references to consolidated Invesco Ltd. results, including PCBOI and AUM, exclude the operations of Atlantic Trust. The company closed the sale of Atlantic Trust on December 31, 2013.
2013 was a year of strong performance for Invesco. Invesco continued to provide strong, long-term investment performance to clients, which contributed to robust organic growth throughout the year. We delivered excellent results for our shareholders, continued to make progress against our long-term strategic objectives and continued to expand the company’s investment capabilities globally.
2013 Executive Compensation Highlights
Our compensation programs are tied to the achievement of our financial and strategic results and our success in serving our clients’ and shareholders’ interests. Reflecting our strong financial results and significant achievements related to our long-term strategic objectives, the compensation of our executive officers was positively impacted in 2013 and paid from the aggregate incentive pool approved by the committee (see “Setting Annual Incentive Compensation Pool”). Below we highlight the results of the 2013 compensation decisions for our executive officers.
16% year-over-year increase in aggregate total compensation for our executive officers* | 69% of incentive compensation is deferred incentive compensation for our President & CEO* Deferred Incentive Compensation | 64% of incentive compensation is deferred incentive compensation Deferred Incentive Compensation |
* |
Executive Summary (cont’d)
Named Executive Officer Compensation Over A Five-Year Period
The below chart shows the compensation of our NEOs over a five-year period. The committee believes the chart illustrates the appropriate alignment of NEO compensation with the overall operating results of the company for the past five years. For 2013, total compensation for the NEOs increased 16% while adjusted operating income increased 27.7%.
2013 Chief Executive Officer Compensation
Our President and Chief Executive Officer’s incentive compensation increased for 2013. | ||
Mr. Flanagan led the by 15%. | ||
For more information regarding annual compensation for our Chief Executive Officer and each of the other named executive officers, see “2013 Named Executive Officer Compensation” below.
Executive Summary (cont’d)
Progress Against Our Strategic Objectives
Throughout the year, we continued to make substantial progress against our long-term strategic objectives set forth below. Significant achievements across all areas of our business that further positioned us for growth and long-term success included:
Achieve strong investment performance — Investment performance across the company remained strong throughout 2013. Delivering strong, long-term investment performance to clients contributed to strong organic growth throughout the year. |
Be instrumental in our clients’ success — Further strengthened and deepened client relationships through superior client engagement. The company made solid progress building world-class fixed income capabilities through the creation of a global fixed income capability, which contributed to record AUM levels in Bank Loans, Stable Value and Investment Grade portfolios. The company further expanded its Exchange-Traded Fund (“ETF”) franchise, which contributed to record AUM levels for its ETF portfolio. Additionally, the company continued to anticipate client demand by expanding its global investment strategies through the introduction of new multi-asset capabilities and liquid alternative products that we believe will benefit clients and our business over the long term. |
Harness the power of our global platform— As a demonstration of our ability to leverage our global platform, in 2013 Invesco launched a number of new capabilities globally that support the future growth of the firm. In fact, Invesco launched more funds during the fourth quarter than we did in any full calendar year over the past five years. |
Perpetuate a high-performance organization — Successfully implemented key organizational changes to better align us with future growth opportunities, increased collaboration across regions, and significantly reinvested in employee talent through additional focus on performance leadership and succession planning. Invesco’s employee engagement scores continued to exceed benchmarks set by high performing companies worldwide, as reflected in data from a third-party administered employee survey. |
Our Compensation Practices
Below we highlight certain executive compensation practices that are designed to align executive pay with performance, ensure good governance, and serve our shareholders’ long-term interests.
What We Do
Pay for performance.We tie pay to the performance of the company and the individual. The great majority of executive compensation is not guaranteed and is variable. |
Strong emphasis on deferred compensation.Compensation for our executive |
For more information regarding |
Long vesting periods. Our equity awards generally vest in annual tranches over a four-year period. |
Linkage of incentive compensation pool to PCBOI.We have
|
Executive Summary (cont’d)
aggregate incentive compensation |
• base salaries for our NEOs limited
“Clawback” policy.The company maintains a “clawback” policy applicable to
|
What We Don’t Do Results of 2013 Say-on-Pay Vote and Our Investor Outreach Program At the 2013 Annual General Meeting of Shareholders, 95.8% of the votes cast were in favor of the advisory proposal to approve our NEO compensation, (the “Say-on-Pay” advisory proposal). Although we believe that the 2013 vote conveyed our shareholders’ strong support of the committee’s decisions and the existing executive compensation programs, during the balance of 2013 and early 2014, we continued to actively seek investor feedback concerning our compensation programs by holding meetings with a significant number of our largest shareholders. While all of the shareholders we spoke with agree on the importance of pay and performance alignment, there was no consensus among these shareholders on how alignment should be measured. A number of the shareholders indicated that their Say-on-Pay decisions are made on a case-by-case basis and that they have not had any issues with Invesco’s compensation in prior years, some noting in particular that they believe appropriate decisions have been made for NEO compensation. Our largest shareholders do not share a consistent philosophy regarding the structure of compensation. That said, all shareholders affirmed the importance of clear disclosure and transparency regarding the decision making process undertaken by the committee. Based on this feedback the committee determined to continue our current compensation practices as described in this Compensation Discussion and Analysis.Share ownership guidelines.We have continued our sound governance practices,including:• maintainingmaintain robust share ownership guidelines for our directors and executive officers, thereby creating a clearfurther link between management interests, company performance and shareholder value;• continuing not to provide excise tax “gross ups;“Double triggers.” • maintaining the requirement ofWe maintain a “double triggers”trigger” requirement on the vesting of equity awards in the event of a change in control;control, meaning that an equity award holder must be terminated following the change in control before vesting will be accelerated.Modest perquisites.We provide modest perquisites that provide a sound benefit to the company’s business. Independent compensation committee consultant.Our independent compensation consultant, Johnson Associates, Inc., is retained directly by the committee and performs no other services for the company. • maintainingNo dividends or dividend equivalents on unearned performance-based awards.No dividends or dividend equivalents are paid on performance-based awards during the vesting period. Rather, dividends are deferred and are paid based on performance achieved, with no premiums. No gross ups.We do not generally provide excise tax “gross ups,” other than in the case of certain relocation expenses, consistent with our relocation policy. No short selling or hedging.Our insider trading policy thatstrictly prohibits short selling, dealing in publicly-traded options and hedging or monetization transactions in our common shares; andshares.• including in ourNo option re-pricing.Our equity incentive plans contain certain provisions prohibiting option re-pricingrepricing absent approval of our shareholders.1Adjusted operating margin and adjusted diluted earnings per share are non-GAAP financial measures. Please see pages 56 through 60 of our Annual Report for a presentation of, and reconciliation to, the most directly comparable GAAP measures.
Executive SummaryOur Compensation Philosophy
To support our long-term strategic objectives, we have structured our compensation programs at every level to achieve the following objectives:
2011 Financial Performance | Along with the rest of our industry, Invesco was challenged during 2011 by extremely volatile global markets and a global economy that continues to be under pressure. In spite of the volatility of world financial markets, Invesco remains very well positioned to succeed over the long term:
• our investment performance is solid, as evidenced by positive investment flows in 2011;
• we have built a strong global operating platform; and
• we have a global, diversified client base and a comprehensive range of capabilities and products.
Despite continued global market volatility, our senior management team guided the company to achieve solid improvements during 2011 in key measures of our financial performance, as shown below. | |||||||||||
Measure1 | 2011 Actual Results2 | Change from 20102 | 2010 Actual Results2 | 2009 Actual Results | ||||||||
Assets Under Management (“AUM”) as of December 31 | $625B | +1.3% | $617B | $460B | ||||||||
Adjusted Operating Income | $1,069M | +19.0% | $898M | $566M | ||||||||
Adjusted Operating Margin | 36.9% | +1.3 pts | 35.6% | 29.1% | ||||||||
Adjusted Diluted EPS | $1.68 | +21.7% | $1.38 | $0.89 |
|
Martin L. Flanagan, CEO
2011 Total Compensation*
Change from Prior Year
$12.89M 0%
* Consistsretain top talent by ensuring a meaningful mix of salary, annual cash bonus, annual stock deferral award and long-term equity award earned in 2011 — see note on p.32 regarding differences from the Summarydeferred compensation vehicles.
Determining Compensation Table (“SCT”)of Our Executive Officers
Executive SummaryRole of the Compensation Committee
The committee has, among other duties, responsibility for determining the components and amounts of compensation paid to our executive officers, including our named executive officers. The committee’s responsibilities include:
reviewing and making recommendations to the Board about the company’s overall compensation philosophy; approving company-wide annual compensation; evaluating the performance of, and setting the compensation for, the Chief Executive Officer; and reviewing and overseeing management’s annual process for evaluating the performance of, and approving the compensation for, all other executive officers, including our other named executive officers. The committee’s philosophy in practice delivers a significant portion of total pay through incentive compensation. The majority of incentive compensation is deferred and tied to financial and strategic performance in order to align individual rewards with client and shareholder success. In determining the compensation levels, the committee considers the achievement of strategic objectives, the success in executing annual objectives, year-over-year operating results, operating margin, year-over-year earnings per share and operating results versus peers. In addition, the committee considers the competitive environment and the economic cycle. All incentive compensation is constrained by the range of PCBOI to ensure, at all times, the incentive pool is linked to Invesco’s operating results. The committee makes its compensation decisions based upon the totality of the results without tying such decisions to a specific formula. The committee believes that this holistic approach, which incorporates fact-based qualitative judgments based upon the factors described above, is more effective than purely mechanical formula criteria. Role of the Compensation Consultant The committee’s charter gives it the authority to retain consultants and other advisors to assist it in performing its duties. The committee has engaged Johnson Associates, Inc., an independent consulting firm, to advise it on director and executive compensation matters. Johnson Associates: attends certain meetings of the committee and periodically meets with the committee without members of management present; assists the committee throughout the year in its analysis and evaluation of our overall executive compensation programs, including compensation paid to our directors and executive officers; provides the committee with certain market data and analysis that compares executive compensation paid by the company with that paid by other firms in the financial services industry and certain investment management firms which we consider generally comparable to us; and provides commentary regarding market conditions, market impressions and compensation trends. The committee uses such data as reference material to assist it in gaining a general awareness of industry compensation standards and trends. The market data, including performance and pay practices of the peer group and broader investment management firms, do not directly affect the committee’s compensation determinations for our executive officers, including our named executive officers. Although we seek to offer to our executive officers a level of total compensation that is competitive, the committee does not target a particular percentile of market or the peer group with respect to total pay packages or any individual components thereof. The committee’s consideration of the market data constitutes only one of many factors reviewed and such market data is considered generally and not as a substitute for the committee’s independent judgment in making compensation decisions regarding our executive officers. Under the terms of its engagement with the committee, Johnson Associates does not provide any other services to the company unless the committee has approved such services. No such other services were provided in 2013. The company uses other compensation and benefits consultants to provide market data, actuarial services and/or advice relating to broad management employee programs in which named executive officers may participate. Review of Peer Compensation | ||||
|
In determining executive compensation, the committee reviews the executive compensation programs and levels of our industry peer companies, as well as other comparable investment management reference companies. Our industry peers (see |
Role of Executive Officers in Determining Executive Compensation
Our Chief Executive Officer meets with the non-executive directors (including the members of the committee) throughout the year to discuss executive performance and compensation matters, including proposals relative to compensation for individual executive officers (other than the Chief Executive Officer). Our Chief Executive Officer and Chief Administrative Officer work with the committee to implement our compensation philosophy. They also provide to the committee information regarding financial and investment performance of the company as well as our progress toward our long-term strategic objectives. Our Chief Financial Officer assists as needed in explaining specific aspects of the company’s financial performance.
Setting Annual Incentive Compensation Pool
Based upon the above principles and processes, at regular intervals during the year, the committee examines the company’s progress on multiple operating measures, which include client success and financial measures, including PCBOI, adjusted operating margin, assets under management and adjusted
diluted earnings per share, as well as key measures, such as the company’s progress toward achieving its strategic objectives. While each of these items is considered by the committee, the committee does not attempt to rank or assign relative weight to any factor but rather applies its judgment in considering them in their entirety. The committee is focused on the totality of organizational success without tying compensation decisions to a specific formula.
Following the end of the fiscal year, the committee establishes an overall company-wide incentive pool within established guidelines described below to ensure that compensation is aligned with the financial and strategic results discussed above. The pool is comprised of a cash bonus pool and a deferred compensation pool (consisting of annual stock deferral and long-term equity awards that vest over four years). All 2013 awards, including NEO awards, were paid out of these incentive pools.
For more information regarding annual stock deferral awards and long-term equity awards, see “Components of Executive Compensation and Their Purpose” and “Our Industry Peer CompaniesPerformance-Based Long-Term Equity Awards” below.
Affiliated Managers Group, Inc.The committee annually sets parameters, used consistently for many years, to guide the end-of-year decision-making process regarding the company-wide incentive pool size. These parameters are expressed as a percentage of PCBOI. The committee uses a range of 34-48% of PCBOI, in the aggregate, in setting the company-wide incentive pool, though it maintains the flexibility to go outside either end of this range in circumstances that it deems exceptional. The range includes the cash bonus and deferred compensation pools, as well as the amounts paid under sales commission plans (in which our NEOs do not participate). The range was determined based on historical data concerning the practices of our peer group as analyzed by Johnson Associates and based on data obtained from the McLagan and CaseyQuirk Performance Intelligence Study.
AllianceBernstein L.P.Over the past five years, the aggregate incentive pool has averaged approximately 44% of PCBOI. Utilizing its judgment, and applying discretion based upon the company’s financial results and progress toward strategic objectives during 2013, the committee set the company-wide incentive pool for 2013 at approximately 41% of PCBOI (compared to 44% of PCBOI for 2012). The committee decided:
Ameriprise Financial
For more information regarding the company’s financial results and our achievement of strategic objectives for 2013, see “2013 Performance Highlights”and “Progress Against Our Strategic Objectives” above.
Bank
Components of New York MellonExecutive Compensation and Their Purpose
BlackRock, Inc.The compensation program for our executive officers, including the NEOs, consists primarily of base salary and variable incentive compensation. The committee believes that a majority of our NEOs’ pay should be incentive compensation – consisting of a combination of annual cash bonuses, annual stock deferral awards, and long-term equity awards – all of which are linked to the achievement of the company’s financial and strategic objectives. The following table further describes each component of executive compensation, as well as its purpose and key measures.
Eaton Vance
Federated Investors, Inc.
Franklin Resources
Janus Capital Group
Legg Mason Inc.
Northern Trust Corp.
SEI Investment Company
State Street
T. Rowe Price Group
Type | Pay Element | What It Does | Key Measures | |||
FIXED | Base salary | •Provides competitive fixed pay
• •Evaluated annually, generally remains static unless promotion or adjustment is necessary due to economic trends in industry | •Experience, duties and scope of responsibility •Internal and external market factors •Reviewed annually | |||
VARIABLE | Annual cash bonus |
| •
|
Compensation is closely linked with the Company’s progress against key financial measures with bonus pools determined based on a range of PCBOI
| |||||
Annual stock deferral award (time-based vesting) | •
•
•
| •Based upon company’s annual financial results and progress against long-term strategic objectives | |||
Long-term equity awards (performance-based and time-based vesting) |
•Encourages retention by vesting in annual increments over four years | •Based upon company’s annual financial
•70% time-based vesting |
Our Performance-Based Long-Term Equity Awards
Long-term equity awards are four-year awards which generally vest in 25% increments each year. The committee believes that long-term equity awards should align employee and shareholder interests and that a portion of such awards should be paid only upon achievement of targeted company financial results. Therefore, the executive’s ability to realize 30% of the long-term equity award is tied to the achievement each year of at least one of two financial measures:
Full vesting of the performance-based long-term equity award occurs in the event either target financial measure is achieved. Partial vesting of the award occurs on a pro-rated basis based on straight-line interpolation between a minimum threshold and the target financial measure. The award will vest based upon the higher achieved financial measure for that year. In addition, dividend equivalents are deferred for such performance awards and will only be paid if and to the extent an award vests. The target financial measures and minimum thresholds for the performance-based portion of our long-term equity awards granted in February 2013 are illustrated below.
2013 Compensation Decision Process
The following flowchart depicts the committee’s compensation decision process and related judgments in determining executive officers’ compensation for 2013.
2013 Named Executive Officer Compensation
For 2013, our named executive officers are:
|
2011 Compensation Decision Process
Title | ||
| President and Chief Executive Officer | |
Loren M. Starr | Senior Managing Director and Chief Financial Officer | |
G. Mark Armour | Senior Managing Director and Head of EMEA | |
Andrew T.S. Lo | Senior Managing Director and Head of Asia Pacific | |
Philip A. Taylor | Senior Managing Director and Head of the |
Set forth below is a summary of the 2013 compensation for each named executive officer, as well as the 2013 material goals and accomplishments of each named executive officer that the committee considered in determining each such officer’s compensation for 2013. In addition, the following graphs show for each named executive officer the ratio of 2013 cash incentive compensation (annual cash bonus) to deferred incentive compensation (annual stock deferral award and long-term equity award). The tables set forth the elements of compensation paid to each such officer for 2013.
Note: The graphs and tables below depict how the committee viewed its compensation decisions for our NEOs, but they differ substantially from the Summary Compensation Table (“SCT”) on page 41 required by SEC rules and are not a substitute for the information presented in the SCT. There are two principal differences between the SCT and the presentations below:
Approximately 65% of our CEO’s total annual compensation is deferred, compared to an average CEO-deferral rate of approximately 56% for our industry peers for 2010 (the latest year for which information was available). Likewise, approximately 61% of our other named executive officers’ total annual compensation is deferred, compared to an average other named executive officer-deferral rate of approximately 40% for our industry peers for 2010.
Note: The graphs and tables below depict how the committee viewed its compensation decisions for our NEOs, but they differ substantially from the Summary Compensation Table (“SCT”) on page 42 required by SEC rules and are not a substitute for the information presented in the SCT. There are two principal differences between the SCT and the presentation below:
Martin L. Flanagan — President and Chief Executive Officer Mr. Flanagan has been our President and Chief Executive Officer since August 2005. His achievements in 2013 in respect of the company’s strategic objectives set forth below include: his leadership, the firm made solid progress building world-class fixed income capabilities through the creation of a global fixed income capability, which contributed to record AUM levels in Bank Loans, Stable Value and Investment Grade portfolios. The firm further expanded its ETF franchise, which contributed to record AUM levels for its ETF portfolio. Additionally, the firm continued to anticipate client demand by expanding its global investment strategies through the introduction of new multi-asset capabilities and liquid alternative products that we believe will benefit clients and our Invesco generally is near the median of our peer group in terms of market capitalization and annual revenues. Our CEO’s total compensation earned in 2012 was at approximately the 60th percentile of 2012 CEO total disclosed compensation of our industry peer companies (the latest year for which data was available). When comparing performance on a variety of financial measures, Invesco generally ranges between the 50th and 70th percentiles. Further, our CEO’s total compensation is strongly aligned with shareholders, with approximately 69% of his total incentive compensation deferred into Invesco stock. Therefore, the committee believes that our Chief Executive Officer’s total compensation is well aligned with performance and our shareholder’s interests. For 2013, the Committee determined that Mr. Flanagan should see an increase to total compensation of 20% in recognition of the strong 2013 operating results and Mr. Flanagan’s leadership in continuing to achieve the strategic objectives of the company. The changes to each component of Mr. Flanagan’s compensation are detailed in the table below. 2013 Total Compensation* Change from Prior Year Base Salary 2013 Annual Cash Bonus 2013 Long-Term Equity Award Year-Over-Year Change from 2012 (%) Loren M. Starr — Senior Managing Director and Chief Financial Officer Mr. Starr has been our Chief Financial Officer since October 2005. His achievements in 2013 include: 2013 Total Compensation* Change from Prior Year Base Salary 2013 Annual Cash Bonus 2013 Long-Term Equity Award Year-Over-Year Change from 2012 (%) G. Mark Armour — Senior Managing Director and Head of EMEA In early 2013, Mr. Armour assumed responsibility for Invesco’s EMEA business (which includes Europe, Middle East and Africa). His accomplishments in 2013 include: As discussed in last year’s Proxy Statement, Mr. Armour’s compensation in 2012 was reduced due to a narrowing of the scope of his responsibilities for that year associated with the transition of an investment center to another executive officer, Karen Dunn Kelley, and the consolidation of North America retail and institutional sales under Philip Taylor. Mr. Armour’s total compensation was therefore reduced from $4.7M in 2011 to $3.6M in 2012. Upon assuming the role as the head of Invesco’s EMEA business in early 2013, the scope of Mr. Armour’s responsibilities were greatly expanded. The committee determined that the scope of his role in 2013 warranted an increase in compensation to levels at least as high as 2011 compensation. In addition, the committee agreed to recognize his leadership of the EMEA region in 2013, including the achievements described above. 2013 Total Compensation* Change from Prior Year** 2013 Annual Cash Bonus 2013 Long-Term Equity Award Year-Over-Year Change from 2012 (%) **Changes in components involving cash compensation include the effect of foreign exchange rate differences. Andrew T.S. Lo — Senior Managing Director and Head of Asia Pacific Mr. Lo has been head of the firm’s Asia Pacific business since 2001. His accomplishments in 2013 include: 2013 Total Compensation* Change from Prior Year** Base Salary 2013 Annual Cash Bonus 2013 Long-Term Equity Award Year-Over-Year Change from 2012 (%) **Changes in components involving cash compensation include the effect of foreign exchange rate differences. Philip Taylor — Senior Managing Director and Head of the Americas Mr. Taylor has been head of the firm’s Americas business since 2012. His achievements in 2013 include: 2013 Total Compensation* Change from Prior Year** 2013 Annual Cash Bonus 2013 Long-Term Equity Award Year-Over-Year Change from 2012 (%) **Changes in components involving cash compensation include the effect of foreign exchange rate differences.• The company grants both cash and equitydeferred incentive compensation after our earnings for a performancethe year have been announced. In both the presentationpresentations below and the SCT, cash incentive compensation granted in 20122014 for 20112013 performance is shown as 20112013 compensation. Our presentation below treats equity awardsdeferred incentive compensation similarly, so that equity awards granted in 20122014 are shown as 20112013 compensation. The SCT does not follow this treatment, however, and insteadtreatment. Instead the SCT reports the value of equity awards in the year in which they are granted, rather than the year in which they were earned. As a result, equity awards granted in 20122014 for 20112013 performance are shown in our presentation below as 20112013 compensation, but the SCT reports for 20112013 the value of equity awards granted in 20112013 in respect of 20102012 performance.• The SCT reports “all other compensation.“All Other Compensation.” These amounts are not part of the committee’s current compensation determinations and are not shown in the presentation below.Martin L.• Achieve strong financial performance — Mr. Flanagan — Presidentled the company’s strong financial performance in 2013, which included a 27.7% increase in annual adjusted operating income, 39.7% annual adjusted operating margin (an increase of 4.0 percentage points over 2012), a 29.1% increase in annual adjusted diluted EPS, total net inflows of $34.4 billion and Chief Executive Officer$850 million return of capital to our shareholders.• Achieve strong investment performance — — Mr. Flanagan oversaw the company’s continued solidfocus on delivering investment management which resulted in veryexcellence to clients and further enhanced the firm’s strong investment performance.culture. Investment performance across the company remained strong throughout 2013. Delivering strong, long-term investment performance to clients contributed to strong organic growth throughout the year.• • Deliver the company’s investment capabilitiesBe instrumental to meet client needsour clients’ success — Mr. Flanagan oversawcontinued to oversee the enhancementfirm’s efforts to further strengthen and deepen client relationships through superior client engagement. Underglobal diversified platform of investment opportunities by focusing product offerings and pursuing targeted expansion in areas with strong investor demand. Further, Mr. Flanagan oversawbusiness over the company’s continued successful integration of the retail asset management business of Morgan Stanley, including the Van Kampen funds, which was largely completed in 2011.long term.• Harness the power of our global operating platform — Mr. Flanagan oversaw the successful implementation of major organizational changes which resulted in increased collaboration across regions, newly identified opportunities and greater leveraging of global support capabilities.• Perpetuate a high-performance organization — Mr. Flanagan oversaw the company’s efforts to launch a number of new capabilities globally that support the future growth of the firm. The company launched more funds during the fourth quarter of 2013 than it did in any full calendar year over the past five years.• Perpetuate a high-performance organization — Mr. Flanagan successfully managed changes within the organization to drive increased collaboration across regions and more effectively leverage our investment capabilities globally. As part of efforts to further enhance employee engagement, he oversaw efforts to significantly reinvest in employee talent through focused internal development supportedadditional focus on performance leadership and succession planning. Invesco’s employee engagement scores continued to exceed benchmarks set by strategic external new hires.high-performing companies worldwide, as reflected in data from a third-party administered employee survey. $ 15,000,000 +20% 2013 Annual Stock
Deferral Award $ 790,000 $ 4,475,000 $ 1,845,000 $ 7,890,000 0% +33% +23% +15% *Consists of salary, annual cash bonus, annual stock deferral award and long- term equity award (30% of which is performance based) earned in 2013. See note on p. 33 regarding differences from the SCT. • Generated expense savings and improved margins — Mr. Starr oversaw efforts to expand the company’s operating margin through the course of 2013 by implementing cost saving programs to more effectively deploy existing resources and by allocating capital to high growth areas. 2011 Total Compensation* Change from Prior Year $12,890,000 0% Base Salary 2011 Annual
Cash Bonus 2011 Annual
Stock Deferral
Award 2011 Long-
Term Equity
Award $ 790,000 $ 3,750,000 $ 1,500,000 $ 6,850,000 • Supported the continued investment in the business for future growth —Mr. Starr supported the continued growth of the business by leading the company in financing several important new product launches, with more than $250 million in seed capital. Mr. Starr also led the efforts to improve the firm’s liquidity in part through the issuance of $1 billion of long-term senior debt at favorable rates of interest and paying down the outstanding credit facility debt. • Oversaw financial aspects of acquisitions and divestitures —Mr. Starr led the finance team in supporting the acquisition of an interest in Religare Asset Management, one of the top 15 asset managers in the growing India market, as well as the divestiture of Atlantic Trust, a private wealth unit which was not core to the firm’s asset management business. • Improved leadership, people development and training —Mr. Starr continued to devote significant attention to people development in 2013 within the groups he manages, resulting in continued improvement in employees’ development, training and leadership skills. Employee survey results related to coordination, teamwork and empowerment exceeded high-performing company norms. • Focused on core financial systems —Mr. Starr initiated the upgrade of the company’s general accounting and financial systems to significantly improve the efficiency and effectiveness of our global financial processes. $ 3,730,000 +9% 2013 Annual Stock
Deferral Award $ 450,000 $ 1,030,000 $ 450,000 $ 1,800,000 0% +20% +22% +3% *Consists of salary, annual cash bonus, annual stock deferral award and long- term equity award (30% of which is performance based) earned in 2013. See note on p. 33 regarding differences from the SCT. • Achieved strong investment performance —Mr. Armour further enhanced the robust investment culture in EMEA, which helped deliver strong investment performance to clients. As an example, the Invesco Perpetual investment team continued to build on its excellent long-term performance record. He oversaw the recruitment of additional investment talent, the establishment of a multi-asset team in the UK, and numerous fund launches, including the Global Targeted Returns fund in the UK market, which saw inflows of over $250 million in the first three months. Mr. Armour led the transition for the planned departure of a key investment professional announced in late 2013, while maintaining strong flows in the UK and across Europe. • Improved governance processes in light of changes in European regulations —Mr. Armour oversaw efforts to position the firm ahead of changes in the regulatory environment within the UK and Europe, in part by increasing the frequency of Invesco governing body meetings and creating greater acceptance of the role of control functions across the organization. • Revised the strategy for sales across continental Europe —Mr. Armour led the effort to further enhance our ability to serve clients across Europe. As a result, AUM for EMEA increased $34.6 billion to $171.9 billion, improved gross sales of $49.4 billion, and net sales of $8.6 billion, all significantly ahead of the prior year. $ 5,034,807 +38% Base Salary 2013 Annual Stock
Deferral Award $ 469,790 $ 1,525,017 $ 690,000 $ 2,350,000 7% +74% +20% +34% *Consists of salary, annual cash bonus, annual stock deferral award and long- term equity award (30% of which is performance based) earned in 2013. See note on p. 33 regarding differences from the SCT. • Achieved strong investment performance and brought the best of Invesco to clients —Mr. Lo oversaw the improvement of relative performance of Asia Pacific managed assets, for the one-, three-, and five-year periods. Investment performance in Invesco’s Greater China business and its joint venture in China (Invesco Great Wall) was particularly strong, contributing to a robust growth in AUM. Invesco Great Wall maintained its leadership position and finished the year as the largest active manager overall in Chinese equities among the country’s approximately 90 fund management companies. The joint venture was awarded the “Most Respected Fund Management Company” for 2013 byMoneyweek. Mr. Lo also oversaw the successful launch of new ETFs in Greater China. • Successfully integrated investment team in India — Mr. Lo led the acquisition of an interest in Religare Asset Management, expanding Invesco’s capabilities into the growing India market. • Strengthened sales and marketing in Japan, Australia and Korea —Mr. Lo further enhanced the organizational structure in Japan to place greater emphasis on client engagement, marketing and product management. These efforts, combined with the improving investment performance, helped drive strong gains in retail sales for the business. Mr. Lo hired a new head of the Australian team and combined the market’s retail and institutional sales teams under unified leadership, which then achieved an increase in institutional sales with new and existing clients. Mr. Lo oversaw the implementation of a new sales office in Seoul, South Korea to begin serving this rapidly growing asset management market in 2014. $ 4,417,372 +20% 2013 Annual Stock
Deferral Award $ 462,389 $ 1,324,983 $ 530,000 $ 2,100,000 0% +29% +20% +20% *Consists of salary, annual cash bonus, annual stock deferral award and long-term equity award (30% of which is performance based) earned in 2013. See note on p. 33 regarding differences from the SCT. • Increased overall sales and distribution effectiveness — Mr. Taylor increased overall retail and institutional distribution effectiveness in the U.S., Invesco’s largest market, by further strengthening the sales culture and leadership, including improved objective setting and monitoring, enhanced talent management, and increased collaboration with marketing, product management, product development and investments. This effort, coupled with the strong investment performance of the U.S.-based investment teams, led to an increase in net flows of 18% over the prior year. Independent research showed continued high levels of Invesco brand awareness. Additionally, Mr. Taylor’s leadership resulted in employee survey scores that showed further improved engagement across the sales organization, including customer service orientation and leadership metrics. • Brought the best of Invesco to our clients around the world — Mr. Taylor directed continued growth of Invesco’s ETF franchise to record high asset levels. In the U.S., share of net flows increased to 7% of industry flows, a share that is higher than share of assets. Mr. Taylor also oversaw the expansion of Invesco PowerShares ETFs in Canada and Greater China. • Built on positive momentum in Canada — Mr. Taylor directed efforts to further strengthen the effectiveness of Canada’s investment leadership, culture and reputation in the Canadian marketplace. As a result, investment performance improved versus peers, net sales increased and Invesco Canada was nominated as Morningstar Advisors’ Choice Fund Company of the Year. $ 7,425,174 +9% Base Salary 2013 Annual Stock
Deferral Award $ 616,453 $ 2,463,721 $ 1,045,000 $ 3,300,000 -3% +17% +20% +3% *Consists of salary, annual cash bonus, annual stock deferral award and long-term equity award (30% of which is performance based) earned in 2013. See note on p. 33 regarding differences from the SCT.
Other Compensation Policies and Practices
Share Ownership Guidelines
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2011 Total Compensation* | Change from Prior Year |
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$3,550,000 | 0% | |||||||||||||||
Base Salary | 2011 Annual Cash Bonus | 2011 Annual Stock Deferral Award | 2011 Long- Term Equity Award | |||||||||||||
$ | 450,000 | $ | 945,000 | $ | 405,000 | $ | 1,750,000 |
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2011 Total Compensation* Change from Prior Year $4,743,670 -3.2% Base Salary 2011 Annual
Cash Bonus 2011 Annual
Stock Deferral
Award 2011 Long-
Term Equity
Award $ 443,670 $ 1,350,000 $ 600,000 $ 2,350,000
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$4,868,826 | 1.6% | |||||||||||||||
Base Salary | 2011Annual Cash Bonus | 2011 Annual Stock Deferral Award | 2011 Long- Term Equity Award | |||||||||||||
$ | 563,421 | $ | 1,455,405 | $ | 600,000 | $ | 2,250,000 |
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2011 Total Compensation* | Change from Prior Year** |
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Base Salary | 2011Annual Cash Bonus | 2011 Annual Stock Deferral Award | 2011 Long- Term Equity Award | |||||||||||||
$ | 647,365 | $ | 2,135,409 | $ | 870,000 | $ | 3,200,000 |
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Stock Ownership Policy - Ownership level required
Chief executive officer 250,000 shares
All other executive officers 100,000 shares
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All equity awards made to our executive officers are subject to our Executive Officer | ||||
Stock Ownership Policy.The policy requires executive officers to achieve a certain ownership level within three years. Until such level is | ||||
achieved, each executive officer is required to retain 100% of the shares received from our share incentive plans. All of our executive officers have achieved their respective ownership level requirements. |
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Chief Executive Officer | 250,000 shares | |||
All other executive
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Clawback Policy
Our executive officers’ long-term equity awards subject to achievement of target financial results are also subject to a “clawback” policy. All equity awards that are subject to achievement of target financial results in respect of our executive officers, including our named executive officers, are also subject to forfeiture or “clawback” provisions. The provisions provide that any shares received (whether vested or unvested), any dividends or other earnings thereon, and the proceeds from any sale of such shares, are subject to recovery by the company in the event that:
Benefits and Perquisites
As a general practice, the company provides no material benefits and limited perquisites to executive officers that it does not provide to other employees. All executive officers are entitled to receive medical, life and disability insurance coverage and other corporate benefits available to most of the company’s employees. Executive officers are also eligible to participate in the Employee Stock Purchase Plan on similar terms to the company’s other employees. In addition, all of the executive officers may participate in the 401(k) Plan or similar plans in the executive officer’s home country.
The company provides certain limited perquisites to its executive officers which it believes aid the executives in their execution of company business. For example, personal use of company aircraft may be provided to enable named executive officers to devote additional and efficient time to company business when traveling. The committee believes the value of perquisites and other benefits are reasonable in amount and consistent with its overall compensation plan. For additional information on perquisites and other benefits, see the “Summary Compensation Table” in this Proxy Statement.
Award Maximums for Named Executive Officers
In determining compensation for the named executive officers, the committee considers the potential impact of Section 162(m) of the Internal Revenue Code. Section 162(m) generally disallows a tax deduction to public corporations for compensation greater than $1 million paid per fiscal year to each of the corporation’s “covered employees” (generally, the Chief Executive Officer and the next three most highly compensated executive officers as of the end of any fiscal year). However, compensation which
qualifies as “performance-based” is excluded from the $1 million per executive officer limit if, among other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals under a plan approved by the company’s shareholders.
As part of our compensation program for executive officers, the company maintains the Executive Incentive Bonus Plan (“Bonus Plan”). The Bonus Plan provides for annual performance-based awards to eligible employees. For each executive officer, the committee determines on an annual basis an award maximum under the Bonus Plan. Award maximums are expressed as a percentage of PCBOI – an objectively determined performance criteria that is intended to qualify for the performance-based exemption to the $1 million deduction limit under Section 162(m). Award maximums pertain to the cumulative value of an executive officer’s annual variable compensation – consisting of the annual cash bonus, annual stock deferral award and long-term equity award. In the event the committee determines to grant additional compensation that is not performance-based compensation to an executive subject to the provisions of Section 162(m), the additional compensation will be subject to the $1 million deduction limitation.
In February 2013, the committee established three levels of award maximums in respect of our named executive officers – one each for the Chief Executive Officer, Senior Managing Directors of business components, and Senior Managing Directors of staff functions. The three levels of award maximums were established after consideration of:
Employment Agreements, Post-employment Compensation and Change-in-Control Arrangements
Employment Agreements
Chief Executive Officer — Our Chief Executive Officer has an employment agreement with the company that was amended and restated as of January 1, 2011. Under the amended and restated employment agreement, Mr. Flanagan continues to be employed as President and Chief Executive Officer of the company. The agreement terminates upon the earlier of December 31, 2025 (the year in which Mr. Flanagan reaches age 65) or the occurrence of certain events, including death, disability, termination by the company for “cause” or termination by Mr. Flanagan for “good reason.”
The terms of Mr. Flanagan’s amended employment agreement provide:
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Post-employment Compensation Chief Executive Officer — Pursuant to Mr. Flanagan’s amended and restated employment agreement, in the event of his termination without “cause” or resignation for “good reason” he is entitled to receive the following payments and benefits (provided that he has not breached certain restrictive covenants): his then-effective base salary through the date of termination; a prorated portion of the greater of $4,750,000 or his most recent annual cash bonus; immediate vesting and exercisability of all outstanding share-based awards; any compensation previously deferred under a deferred compensation plan (unless a later payout date is stipulated in his deferral arrangements); a cash severance payment generally equal to the sum of (i) his base salary, (ii) the greater of $4,750,000 or his most recent annual cash bonus, and (iii) his most recently made annual equity grant (unless the value thereof is less than 50% of the previously-made grant, in which case the value of the previously-made grant will be used); continuation of medical benefits for him, his spouse and his covered dependents for a period of up to 36 months following termination; any accrued vacation; and any other vested amounts or benefits under any other plan or program. Other Named Executive Officers — Our other named executive officers are parties to employment arrangements that create salary continuation periods of six or twelve months in the event of involuntary termination of service without Change-In-Control Arrangements
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The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report.
Respectfully submitted by the Compensation Committee
Sir John Banham (Chairman)
Rex D. Adams
C. Robert Henrikson(1)
Ben F. Johnson, III
Denis Kessler
Edward P. Lawrence
Phoebe A. Wood
Summary Compensation Table for 2011
The following table sets forth information about compensation earned by our named executive officers during 2009, 2010 and 2011 in accordance with SEC rules. The information presented below may be different from compensation information presented in this Proxy Statement under the caption “Compensation Discussion and Analysis,” as such section describes compensation decisions made in respect of the indicated fiscal year, regardless of when such compensation was actually paid or granted. For an explanation of the principal differences between the presentation in the Compensation Discussion and Analysis and the table below, please see the note on page 32.
Name and Principal Position | Year | Salary ($) (1) | Share ($) (2) | Non-Equity Incentive Plan Compensation (3) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||||
Martin L. Flanagan | 2011 | 790,000 | 8,349,978 | 3,750,000 | 530,480 | 13,420,458 | ||||||||||||||||||
President and Chief Executive Officer | 2010 | 790,000 | 6,508,494 | 3,750,000 | 459,908 | 11,508,402 | ||||||||||||||||||
2009 | 790,000 | 3,954,997 | 2,558,000 | 461,224 | 7,764,211 | |||||||||||||||||||
Loren M. Starr | 2011 | 450,000 | 2,154,984 | 945,000 | 117,622 | 3,667,606 | ||||||||||||||||||
Senior Managing Director and Chief Financial Officer | 2010 | 450,000 | 1,685,992 | 945,000 | 101,180 | 3,182,172 | ||||||||||||||||||
2009 | 450,000 | 1,129,993 | 650,000 | 93,384 | 2,323,377 | |||||||||||||||||||
G. Mark Armour | 2011 | 443,670 | 3,099,993 | 1,350,000 | 238,918 | 5,132,581 | ||||||||||||||||||
Senior Managing Director and Head of Invesco Institutional | 2010 | 400,000 | 2,919,988 | 1,400,000 | 292,010 | 5,011,998 | ||||||||||||||||||
2009 | 400,000 | 2,799,996 | 1,085,000 | 266,435 | 4,551,431 | |||||||||||||||||||
James I. Robertson | 2011 | 563,421 | 2,849,979 | 1,455,405 | 236,312 | 5,105,117 | ||||||||||||||||||
Senior Managing Director and Head of UK and Continental Europe | 2010 | 540,280 | 2,759,543 | 1,400,000 | 579,663 | 5,279,486 | ||||||||||||||||||
2009 | 549,237 | 3,599,993 | 1,010,620 | 312,896 | 5,472,746 | |||||||||||||||||||
Philip A. Taylor | 2011 | 647,365 | 4,069,964 | 2,135,409 | 257,391 | 7,110,129 | ||||||||||||||||||
Senior Managing Director and Head of North American Retail | 2010 | 616,374 | 4,169,958 | 2,030,000 | 359,404 | 7,175,737 | ||||||||||||||||||
2009 | 562,863 | 1,699,984 | 1,444,138 | 320,035 | 4,027,019 |
Name and Principal Position | Year | Salary ($) (1) | Share ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | ||||||
Martin L. Flanagan | 2013 | 790,000 | 8,349,960 | 4,475,000 | 766,802 | 14,381,762 | ||||||
President and Chief Executive Officer | 2012 | 790,000 | 8,349,969 | 3,375,000 | 728,966 | 13,243,935 | ||||||
2011 | 790,000 | 8,349,978 | 3,750,000 | 530,480 | 13,420,458 | |||||||
Loren M. Starr | 2013 | 450,000 | 2,118,525 | 1,030,000 | 177,329 | 3,775,854 | ||||||
Senior Managing Director and | 2012 | 450,000 | 2,154,972 | 859,950 | 149,516 | 3,614,438 | ||||||
Chief Financial Officer | 2011 | 450,000 | 2,154,984 | 945,000 | 117,622 | 3,667,606 | ||||||
G. Mark Armour | 2013 | 469,790 | 2,324,969 | 1,525,017 | 346,359 | 4,666,135 | ||||||
Senior Managing Director and | 2012 | 440,969 | 2,849,983 | 874,691 | 223,981 | 4,389,624 | ||||||
Head of EMEA | 2011 | 443,670 | 3,099,993 | 1,350,000 | 238,918 | 5,132,581 | ||||||
Andrew T.S. Lo (5) | 2013 | 462,389 | 2,191,742 | 1,324,983 | 219,311 | 4,198,425 | ||||||
Senior Managing Director and | 2012 | — | — | — | — | — | ||||||
Head of Invesco Asia Pacific | 2011 | — | — | — | — | — | ||||||
Philip A. Taylor | 2013 | 616,453 | 4,069,962 | 2,463,721 | 307,706 | 7,457,842 | ||||||
Senior Managing Director and | 2012 | 638,434 | 4,069,953 | 2,105,860 | 311,576 | 7,125,823 | ||||||
Head of Americas | 2011 | 647,365 | 4,069,964 | 2,135,409 | 257,391 | 7,110,129 |
(1) | For each of the named executive officers, includes salary that was eligible for deferral, at the election of the named executive officer, under our 401(k) plan or similar plan in the named executive officer’s country. For Messrs. Armour, Lo and Taylor, base salary is converted to U.S. dollars using an average annual exchange rate. |
(2) | For share awards granted in 2013, includes time-based and performance-based equity awards that generally vest in four equal annual installments on each anniversary of the date of grant. The value of performance-based awards is based on the grant date value and reflects the probable outcome of such conditions and represents the highest level of achievement. See, “Grants of Plan-Based Share Awards for 2013” for information about the number of shares underlying each of the time-based and performance-based equity awards. |
Grant date fair values were calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 “Compensation — Stock Compensation.” The grant date fair value was calculated by multiplying the number of shares granted by the closing price of the company’s common shares on the date of grant. |
The amounts disclosed do not reflect the value actually realized by the named executive officers. For additional information, please see Note 11 — “Share-Based Compensation” to the financial statements in our Annual Report. |
(3) | Reflects annual cash bonus award earned for fiscal year by the named executive officers under the Executive Incentive Bonus Plan and paid in February of the following year. For 2013, for Messrs. Armour, Lo and Taylor, annual cash bonus awards are converted to U.S. dollars using an average annual exchange rate. |
(4) | The following table reflects the items that are included in the All Other Compensation column for 2013. |
(5) | Mr. Lo was not an NEO in 2012 or 2011. |
All Other Compensation Table for 2013
Name | Dividends ($) (1) | Insurance Premiums ($) | Company ($) (2) | Tax Consultation ($) (3) | Perquisites ($) (4) | Total ($) | ||||||
Martin L. Flanagan | 585,288 | 4,680 | 22,050 | — | 154,784 | 766,802 | ||||||
Loren M. Starr | 150,881 | 4,398 | 22,050 | — | — | 177,329 | ||||||
G. Mark Armour | 212,534 | 2,043 | 21,580 | 110,202 | — | 346,359 | ||||||
Andrew T.S. Lo | 159,284 | 6,604 | 53,423 | — | — | 219,311 | ||||||
Philip A. Taylor | 285,329 | 2,003 | 13,043 | 7,331 | — | 307,706 |
(1) | Includes dividends and dividend equivalents paid at the same rate as on our other shares on (i) unvested time-based awards, and (ii) performance-based awards to the extent that the award vested. |
(2) | Amounts of matching contributions paid by the company to our retirement plans are calculated on the same basis for all plan participants, including the named executive officers. |
(3) | With respect to Mr. Armour, includes fees paid in 2013 for services provided in calendar years 2011, 2012 and 2013. |
(4) | Perquisites include the following: |
With respect to Mr. Flanagan, includes $151,207 for his personal use of company-provided aircraft. With respect to the company-provided aircraft, the company pays direct operating expenses, monthly lease payments and management fees, as well as fees of a third-party supplier. We calculate the aggregate incremental cost to the company for personal use based on the average variable costs of operating the aircraft. Variable costs include fuel, repairs, travel expenses for the flight crews, and other miscellaneous expenses. This methodology excludes fixed costs that do not change based on usage, such as depreciation, maintenance, taxes and insurance. |
Mr. Flanagan’s total also includes certain amounts for technology support and amounts paid by the company for the officer’s and his spouse’s incidentals and recreational activities in conjunction with a company-sponsored off-site business meeting. |
Grants of Plan-Based Share Awards for 2013
The Compensation Committee granted share awards to each of the named executive officers includes salary that was eligibleduring 2013. Share awards are subject to transfer restrictions and subject to forfeiture prior to vesting upon a recipient’s termination of employment for deferral, atany reason other than death, disability, involuntary termination other than for cause or unsatisfactory performance, or (in the electioncase of Mr. Flanagan only) voluntary termination for “good reason.” All share awards immediately become vested upon the recipient’s termination of employment during the 24-month period following a change in control (i) by the company other than for cause or disability, or (ii) by the recipient for good reason.
The following table presents information concerning plan-based awards granted to each of the named executive officer, under our 401(k) planofficers during 2013.
Estimated Future Payout Under Equity Incentive Plan Awards (1) | All (#) (2) | Closing Market Price on Date of Grant ($/Share) | Grant Date ($) (3) | |||||||||||||||
Name | Grant Date | Committee Action Date | Vesting | Threshold (#) | Maximum (#) | |||||||||||||
Martin L. Flanagan | 02/28/13 | 02/14/13 | 4-year ratable | - | 76,707 | - | 26.79 | 2,054,980 | ||||||||||
02/28/13 | 02/14/13 | 4-year ratable | - | - | 234,975 | 26.79 | 6,294,980 | |||||||||||
Loren M. Starr | 02/28/13 | 02/14/13 | 4-year ratable | - | 19,596 | - | 26.79 | 524,976 | ||||||||||
02/28/13 | 02/14/13 | 4-year ratable | - | - | 59,483 | 26.79 | 1,593,549 | |||||||||||
G. Mark Armour | 02/28/13 | 02/14/13 | 4-year ratable | - | 19,596 | - | 26.79 | 524,976 | ||||||||||
02/28/13 | 02/14/13 | 4-year ratable | - | - | 67,189 | 26.79 | 1,799,993 | |||||||||||
Andrew T.S. Lo | 02/28/13 | 02/14/13 | 4-year ratable | - | 19,596 | - | 26.79 | 524,976 | ||||||||||
02/28/13 | 02/14/13 | 4-year ratable | - | - | 62,216 | 26.79 | 1,666,766 | |||||||||||
Philip A. Taylor | 02/28/13 | 02/14/13 | 3-year ratable | - | 26,875 | - | 26.79 | 719,981 | ||||||||||
02/28/13 | 02/14/13 | 4-year cliff | - | 8,958 | - | 26.79 | 239,984 | |||||||||||
02/28/13 | 02/14/13 | 3-year ratable | - | - | 87,066 | 26.79 | 2,332,498 | |||||||||||
02/28/13 | 02/14/13 | 4-year cliff | - | - | 29,022 | 26.79 | 777,499 |
(1) | Performance-based Equity Awards. Performance-based equity awards were granted under the 2011 Global Equity Incentive Plan. For each of the named executive officers other than Mr. Taylor, performance-based equity awards are four-year awards that vest 25% each year. With respect to Mr. Taylor, performance-based equity awards are comprised of a 3-year award that vests ratably and a 4-year award that vests 100% on the fourth anniversary of the date of grant. |
Performance-based equity awards are tied to the achievement of specified levels of adjusted operating margin or similar planadjusted diluted earnings per share. Full vesting of the performance-based long-term equity award occurs in the named executive officer’s country. For Messrs. Armour, Robertson and Taylor, base salaryevent that either target financial measure is converted to U.S. dollars using an average annual exchange rate.
Grant date fair values were calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 “Compensation — Stock Compensation.” The grant date fair value was calculated by multiplying the number of shares granted by the closing price of the company’s common shares on the date of grant.
The amounts disclosed do not reflect the value actually realized by the named executive officers. For additional information, please see Note 12 — “Share-Based Compensation” to the financial statements in our Annual Report.
All Other Compensation Table for 2011
Name | Dividends ($) (1) | Insurance Premiums ($) | Company ($) (2) | Tax ($) (3) | Tax Consultation ($) | Perquisites ($) (4) | Total ($) | |||||||||||||||||||||
Martin L. Flanagan | 349,783 | 3,966 | 21,075 | — | — | 155,656 | 530,480 | |||||||||||||||||||||
Loren M. Starr | 92,869 | 3,678 | 21,075 | — | — | — | 117,622 | |||||||||||||||||||||
G. Mark Armour | 177,269 | 7,203 | 6,375 | 43,671 | 4,400 | — | 238,918 | |||||||||||||||||||||
James I. Robertson | 182,196 | 2,877 | 32,211 | — | 19,028 | — | 236,312 | |||||||||||||||||||||
Philip A. Taylor | 176,667 | 4,857 | 13,500 | — | 8,312 | 54,055 | 257,391 |
With respect to Mr. Flanagan, includes $153,195 for his personal use of company-provided aircraft. The company pays certain hourly, monthly and annual fees for its use of a fractionally-owned airplane. The company also leases an airplane for which it pays direct operating expenses, and monthly lease payments and management fees. We calculate the aggregate incremental cost to the company for personal use based on the average variable costs of operating the airplanes. Variable costs include fuel, repairs, travel expenses for the flight crews, and other miscellaneous expenses. This methodology excludes fixed costs that do not change based on usage, such as depreciation, maintenance, taxes and insurance. Mr. Flanagan’s total also includes certain amounts for technology support.
Fees paid by the company for the officer’s and his family’s and/or spouse’s recreational activities in conjunction with a company-sponsored off-site business meeting.
With respect to Mr. Taylor, includes (i) $47,034 for Mr. Taylor’s corporate housing; and (ii) work-related parking costs.
Grants of Plan-Based Share Awards for 2011
The committee granted share awards to each of the named executive officers during 2011. Share awards are subject to time-based vesting according to the terms of the applicable award agreement. Share awards are subject to transfer restrictions and subject to forfeiture prior to vesting upon a recipient’s termination of employment for any reason other than death, disability, involuntary termination without cause, or (in the case of Mr. Flanagan only) voluntary termination for “good reason.” Subject to satisfaction of a holding period requirement, certain share awards continue to vest upon a recipient’s termination of employment in the event of retirement. All share awards immediately become vested upon the recipient’s termination of employment during the 24-month period following a change in control (i) by the company other than for cause or disability, or (ii) by the recipient for good reason.
The following table presents information concerning plan-based awards granted to each of the named executive officers during 2011:
Name | Grant Date | Vesting (1) | All Other Share Awards (#) | Closing Market Price on Date of Grant ($/Share) | Grant Date Value of Share ($) (2) | |||||||||||||
Martin L. Flanagan | 02/28/2011 | 4-year ratable | 311,102 | 26.84 | 8,349,978 | |||||||||||||
Loren M. Starr | 02/28/2011 | 4-year ratable | 80,290 | 26.84 | 2,154,984 | |||||||||||||
G. Mark Armour | 02/28/2011 | 4-year ratable | 115,499 | 26.84 | 3,099,993 | |||||||||||||
James I. Robertson | 02/28/2011 | 4-year ratable | 106,184 | 26.84 | 2,849,979 | |||||||||||||
Philip A. Taylor | 02/28/2011 | 3-year ratable | 113,729 | 26.84 | 3,052,486 | |||||||||||||
Philip A. Taylor | 02/28/2011 | 4-year cliff | 37,909 | 26.84 | 1,017,478 |