Annual Meeting: May 14

Invesco CEO Martin Flanagan had total disclosed compensation of $11,518,949 in 2019. His cash bonus increased this year, even though the company’s stock price declined more than 50% over the course of 2019. Indeed, a Financial Times article that chronicled the company was titled: Invesco is worst-selling fund manager in a year to forget. The article noted that “The group’s funds have bled more than $1bn a week over the past 12 months.” The challenge of integrating Oppenheimer Funds after its recent acquisition and the general trend toward low-fee index investing are just two of the headwinds the company faces.

Almost all S&P 500 companies set annual bonus as a multiple of salary, typically with a target of 150% or 200% of target if metrics are achieved. By contrast, Invesco set an incentive target of $13.5 million, more than 10 times Flanagan’s salary. According to the proxy statement, “For 2019, the committee decided that Mr. Flanagan’s total incentive compensation should be $11.46 million, which is 84.9% of his 2019 incentive target of $13.5 million.”

The company has faced shareholder pressure on its compensation packages before, with a 37.9% vote against pay in 2018. In response, the company engaged with its largest shareholders and redesigned its equity incentive program. In 2019, all ten of the company’s largest shareholders voted in favor of the package, including five who had previously opposed. A significant number of shareholders with small holdings opposed the 2019 package, considering the changes incremental. 

Invesco is one of a handful of S&P 500 companies that votes on pay proxies that shareholders also vote on. Last year, Invesco Advisors voted against only 7% of S&P 500 pay packages, and 24% of those companies were featured in the 100 Most Overpaid CEOs covered in As You Sow’s report. The most recent copy of the proxy voting guidelines that I was able to find was from 2016. They are therefore quite dated and provide no information on how advisory votes on executive compensation are analyzed. In fact, when they were published, such proposals were not required by management under Dodd-Frank, but shareholders had begun to ask for them. According to the guidelines, “Invesco generally supports proposals requesting that companies subject each year’s compensation record to an advisory shareholder vote, or so-called ‘say on pay’ proposals.” The entire section on “Compensation and Incentives” is little more than a page long, with headings for Executive Compensation, Equity-based Compensation Plans, Employee stock-purchase plans, and Severance agreements. The guidelines do indicate that the fund subscribes to research from both ISS and Glass Lewis and votes independently.