UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

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Invesco Ltd.

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INVESCO LTD.

1360 Peachtree Street N.E.

Atlanta, Georgia 30309

April 1, 2008

 

Dear Fellow Shareholder,

 

You are cordially invited to attend the 2008 Annual General Meeting of Shareholders of Invesco Ltd., which will be held on Wednesday, May 14, 2008 at 1:00 p.m., Eastern Time, in the Walter C. Hill Auditorium, at the High Museum of Art, located at 1280 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 Annual General Meeting and Proxy Statement.

 

We are pleased to be making use this year of new Securities and Exchange Commission rules allowing companies to furnish proxy materials to their shareholders over the Internet. We believe that this new e-proxy process will expedite shareholders’ receipt of proxy materials and lower the costs and reduce the environmental impact of our Annual General Meeting. On April 1, 2008, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials (“Notice”). The Notice contained instructions on how to access our 2008 Proxy Statement, Annual Report on Form 10-K and other soliciting materials and how to vote. The Proxy Statement 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 in person, please follow the instructions contained in the Notice on how to 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.

 

On behalf of the Board of Directors and the management of Invesco, I extend our appreciation for your continued support.

 

Yours sincerely,

 

 

Rex D. Adams
Chairman

NOTICE OF 2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS

To Be Held May 14, 2008

 

 

NOTICE IS HEREBY GIVEN that the 2008 Annual General Meeting of Shareholders of Invesco Ltd. will be held on Wednesday, May 14, 2008 at 1:00 p.m., Eastern Time, in the Walter C. Hill Auditorium, at the High Museum of Art, located at 1280 Peachtree Street N.E., Atlanta, Georgia 30309, for the following purposes:

 

1. To elect three (3) directors to the Board of Directors to hold office until the annual general meeting of shareholders in 2011;

 

2. To approve and ratify the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2008;

 

3. To approve the company’s 2008 Global Equity Incentive Plan;

 

4. To approve the company’s Executive Incentive Bonus Plan; and

 

5. To consider and act on such other business as may properly come before the meeting or any adjournment thereof.

 

During the Annual General Meeting, management also will present Invesco’s audited consolidated financial statements for the fiscal year ended December 31, 2007.

 

Only holders of record of Invesco common shares on March 14, 2008 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 personally, even though they have sent in proxies.

 

By Order of the Board of Directors,

 

Kevin M. Carome, Secretary

 

April 1, 2008

ADMISSION TO THE 2008 ANNUAL GENERAL MEETING

 

 

An admission ticket (or other proof 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 14, 2008, will be entitled to attend the meeting. An admission ticket will serve as verification of your ownership.

 

 

No cameras, recording devices or large packages will be permitted in the meeting room.

TABLE OF CONTENTS

 

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 Wednesday, May 14, 2008, 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.”

 

 

 

 

 

GENERAL

 

Our Board of Directors currently has nine directors. The Board of Directors is divided into three classes. The Class I directors are initially serving a term of office expiring at the annual general meeting of shareholders in 2008, the Class II directors are initially serving a term of office expiring at the annual general meeting of shareholders in 2009, and the Class III directors are initially serving a term of office expiring at the annual general meeting of shareholders in 2010. At the Annual General Meeting and each succeeding 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. 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.

 

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. Invesco Ltd.’s Nominating and Corporate Governance Committee would then recommend to the full Board 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.

 

The Board has nominated Messrs. Rex D. Adams, Sir John Banham and Denis Kessler for election as directors of the company for a term ending at the 2011 annual general meeting. Messrs. Adams, Banham and Kessler are current directors of the company. Each nominee has indicated to the company that he would serve if elected. We do not anticipate that Messrs. Adams, Banham or Kessler 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.

 

For a director to be considered independent, the Board must determine affirmatively that the director does not have material relationships 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 pursuant to applicable NYSE or other applicable 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, Jerome P. Kenney, Denis Kessler, Edward Lawrence, and J. Thomas Presby.

 

RECOMMENDATION OF THE BOARD

 

THE BOARD 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.

 

Listed below are the names, ages as of April 1, 2008 and principal occupations for the past five years of the director nominees and directors continuing in office. Country listed denotes citizenship.

 

Nominees for re-election to the Board of Directors for a three-year term expiring in 2011

 

Rex D. Adams (67) Chairman and Non-Executive Director (U.S.A.)

 

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 received a B.A. magna cum laude 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 (67) Non-Executive Director (U.K.)

 

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 and chairman of Geest plc from 2002 to 2005. He is currently the chairman of Johnson Matthey plc and Spacelabs Healthcare Inc. Sir John is a graduate of Cambridge University and has been awarded honorary doctorates by four leading U.K. universities.

 

Denis Kessler (55) Non-Executive Director (France)

 

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, SCOR GLOBAL P&C SE, SCOR Global Life US Re Insurance Company, SCOR HOLDING (SWITZERLAND) AG, SCOR Reinsurance Company, SCOR US Corporation and serves as a member of the Boards of Directors of Dexia SA, BNP Paribas SA, Bollore, Dassault Aviation and SCOR Canada Reinsurance Company. Mr. Kessler received a diplôme from the Paris Business School (HEC) and Doctorat d’Etat in economics from the University of Paris.

 

Directors Continuing in Office — Terms Expiring in 2009

 

Martin L. Flanagan, CFA, CPA (47) President and Chief Executive Officer of Invesco Ltd. (U.S.A.)

 

Martin L. Flanagan is president and chief executive officer of Invesco, a position he has held since August 2005. He is also a member of the Board of Directors of Invesco and a trustee of the AIM 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 charter holder and a certified public accountant. He is vice chairman of the Investment Company Institute. He also serves as a member of the executive board at the SMU Cox School of Business and a member of the Board of Councilors of the Carter Center in Atlanta.

Jerome P. Kenney (66) Non-Executive Director (U.S.A.)

 

Jerome P. Kenney joined Invesco’s Board of Directors in January 2008 after his retirement from Merrill Lynch & Co., Inc. where he served as vice chairman and member of the Executive Client Coverage Group. Mr. Kenney was a member of Merrill Lynch’s Executive Management Committee for 20 years. From 1990 until February 2002, he served as head of Merrill Lynch’s Corporate Strategy and Research and for several years also oversaw Corporate Credit, Marketing and Government Relations. Previously, he served as president and chief executive officer of the Merrill Lynch Capital Markets Group from 1984, and as a member of the board of directors from 1985 to 1991. He also served earlier as director of Securities Research, director of Institutional Sales and Marketing and head of Investment Banking. Mr. Kenney received a B.A. in economics from Yale University and an MBA in finance from Northwestern University.

 

J. Thomas Presby (68) Non-Executive Director (U.S.A.)

 

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. Prior to his retirement in 2002, Mr. Presby was deputy chairman and chief operating officer with Deloitte Touche Tohmatsu. He is presently a director and audit committee chair of Tiffany & Co., TurboChef Technologies, Inc., World Fuel Services, Inc., American Eagle Outfitters, Inc. and First Solar, Inc. He received a B.S. in electrical engineering from Rutgers and an M.S. in industrial administration from Carnegie Mellon University Graduate School of Business. Mr. Presby is a certified public accountant. Mr. Presby is able to devote his full attention to the boards upon which he serves.

 

Directors Continuing in Office — Terms Expiring in 2010

 

Joseph R. Canion (63) Non-Executive Director (U.S.A.)

 

Joseph Canion has served as a non-executive director of our company since 1997 and was a director of AIM Investments from 1993 to 1997, when AIM merged with Invesco. 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 chairman of Questia Media, Inc. and is on the board of directors of Physicians Capital Group, ChaCha Search, Inc. and the Houston Technology Center.

 

Edward P. Lawrence (66) Non-Executive Director (U.S.A.)

 

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 senior counsel at Ropes & Gray, where he also co-heads 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 serves on the Board of the Attorneys’ Liability Assurance Society, Ltd., is chairman of the Board of the Massachusetts General Hospital and is a trustee of Partners Healthcare System, Inc. in Boston and McLean Hospital in Belmont, MA.

 

James I. Robertson (50) Senior Managing Director and Head of Global Operations/IT; Director (U.K.)

 

James Robertson has served as a member of the Board of Directors of our company since April 2004. 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’s Global division 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.

 

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 and serve at the discretion of the company’s Board of Directors or Chief Executive Officer.

 

Note: Country listed denotes citizenship.

 

G. Mark Armour (54) Senior Managing Director and Head of Worldwide Institutional (Australia)

 

Mark Armour has served as senior managing director and head of Invesco’s Worldwide Institutional business since January 2007. Previously, Mr. Armour served as head of sales and service for the institutional business. 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 (honors) from La Trobe University in Melbourne, Australia.

 

Kevin M. Carome (51) Senior Managing Director and General Counsel (U.S.A.)

 

Kevin Carome has served as general counsel of our company since January 2006. Previously, he was senior vice president and general counsel of A I M Management Group Inc. from 2003 to 2005. Prior to joining AIM, 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 a B.S. in political science and a J.D. from Boston College.

 

Andrew T. S. Lo (44) Senior Managing Director and Chief Executive Officer of Invesco Asia Pacific (China)

 

Andrew Lo has served as chief executive officer 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 the U.S.

 

John “Jack” S. Markwalter Jr. (48) Senior Managing Director and Head of Sales, Marketing and Client Service for U.S. Institutional

 

Jack Markwalter has served as head of Sales, Marketing and Client Service for our U.S. Institutional business since March 2008. He also serves as chief executive officer of Atlantic Trust, Invesco’s private wealth management business, a position he has held since January 2004. In June 2007, Mr. Markwalter assumed additional responsibility leading Invesco’s private equity fund of funds business. He joined Atlantic Trust as head of business development in 2002 and has more than 20 years of experience in private wealth management, having previously worked at Morgan Stanley since 1986. Mr. Markwalter received a B.S. with highest honors from Georgia Institute of Technology and an MBA from Harvard Business School. Among numerous areas of community involvement, Mr. Markwalter serves on the Board of Trustees for the Georgia Tech Foundation, the Board of Trustees for Pace Academy and the Board of Directors for St. Joseph’s Hospital Mercy Foundation.

 

Colin D. Meadows (37) Senior Managing Director and Chief Administrative Officer (U.S.A.)

 

Colin Meadows joined our company as chief administrative officer in May 2006, with responsibility for business strategy, human resources, communications, facilities and internal audit. 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. cum laude in economics and English literature from Andrews University and a J.D. from Harvard Law School.

 

Loren M. Starr (46) Senior Managing Director and Chief Financial Officer (U.S.A.)

 

Loren Starr has served as senior vice president and chief financial officer of our company since October 2005. 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, summa cum laude, from Columbia University, as well as an MBA, also from Columbia, and M.S. in operations research from Carnegie Mellon University. Mr. Starr is a certified treasury professional and serves as chairman of the Association for Financial Professionals.

 

Philip A. Taylor (53) Senior Managing Director and Head of North American Retail (Canada)

 

Philip Taylor became head of Invesco’s North American Retail business in April 2006. He had previously served as chief executive officer of AIM Trimark Investments since January 2002. He joined AIM Trimark 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 from 1994 to 1997 and managing partner of Meridian Securities, an execution and clearing broker, from 1989 to 1994. He held various management positions with Royal Trust, now part of Royal Bank of Canada, from 1982 to 1989. 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 (honors) 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 and past chair of the Toronto Symphony Orchestra.

 

Robert J. Yerbury (61) Senior Managing Director and Head of UK Retail (U.K.)

 

Bob Yerbury has served as head of UK Retail since September 2004 and as chief investment officer since October 1997. He began his investment career in 1969, initially as an analyst and later fund manager for Equity & Law Life Assurance Society, and joined our company in 1983. Mr. Yerbury has over 36 years of investment experience, holds an M.A. in mathematics from Cambridge University and is a Fellow of the Institute of Actuaries.

 

The company regularly monitors regulatory developments and reviews its policies, processes and procedures in the area of corporate governance to respond to such developments. As part of those efforts, we review various applicable laws affecting corporate governance, including the Companies Act 1981 of Bermuda, the Sarbanes-Oxley Act of 2002, as well as corporate governance-related rules adopted by the SEC and the NYSE.

 

Corporate Governance Guidelines.  The Board has adopted Corporate Governance Guidelines (“Guidelines”) and Terms of Reference for our chairman and chief executive officer, each of which is available in the corporate governance section of the company’s Web site at www.invesco.com (the “company’s Web site”). They are also available in print to shareholders who request a copy from our Secretary at: company.secretary@invesco.com or by writing Invesco Ltd., Attn: Office of the Secretary, 1360 Peachtree Street N.E., Atlanta, Georgia 30309. The Corporate Governance Guidelines set forth the practices the Board follows with respect to, among other things, the composition of the Board, director responsibilities, Board committees, director access to officers, employees and independent advisors, director compensation, performance evaluation of the Board and various other matters.

Code of Conduct and Directors’ Code of Conduct.  We have adopted 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 Web site at www.invesco.com and is available in print free of charge to any shareholder who requests a copy. Interested parties may make a request for a printed copy of the Code of Conduct to our Secretary at: company.secretary@invesco.com or by writing Invesco Ltd., Attn: Office of the Secretary, 1360 Peachtree Street N.E., Atlanta, Georgia 30309. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Conduct for our principal executive officer, principal financial officer and principal accounting officer 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 also maintains a compliance reporting line, where employees can anonymously submit a complaint concerning compliance with applicable laws, rules or regulations, as well as ethical or other concerns.

 

During the fiscal year ended December 31, 2007 (“fiscal year 2007”), the Board held 11 meetings (not including committee meetings). For fiscal year 2007, each director other than James I. Robertson 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 served. The Board does not have a formal policy regarding Board member attendance at Shareholder meetings. Seven directors attended the 2007 annual general meeting. To promote open discussion among the non-executive directors (those directors who are not officers or employees of the company), the non-executive directors meet in executive session at least once per year after a regularly scheduled Board meeting without management. Rex D. Adams, a non-executive and independent director, has been appointed to preside at the executive sessions of the non-executive directors.

 

The current standing 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.

 

 

 

M — Member

 

C — Chairman

 

Below is a description of each standing committee of the Board. The Board has affirmatively determined that each standing committee consists entirely of independent directors pursuant to rules established by the NYSE and rules promulgated under the Securities Exchange Act of 1934, as amended.

 

The Audit Committee is chaired by Mr. Presby and consists additionally of Messrs. Banham, Kenney, Kessler and Lawrence. 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 and is also “financially literate.” Committee members are appointed and removed by the Board. The committee is required to meet at least quarterly, and also periodically meets with the Director of Internal Audit and the independent auditor in separate executive sessions without members of senior management present. The committee has the authority to retain independent advisors, at the company’s expense, wherever it deems appropriate to fulfill its duties. It reports to the Board regularly and annually reviews its own performance and the terms of its charter and recommends any proposed changes to the Board. The committee met ten times in 2007.

 

The committee has a charter which is available on the company’s Web site and which sets forth its responsibilities. These responsibilities include 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, the independent auditor’s qualifications and independence and the performance of the company’s internal audit function and independent auditor. The committee is directly responsible for the appointment of the independent auditor and pre-approval of its engagement to provide any audit or permitted non-audit services under agreed policies and procedures. The committee is also responsible for establishing hiring policies for current or former employees of its independent auditor. It annually reviews the independent auditor’s report and evaluates its qualifications, performance and independence. The committee is also responsible for monitoring and reviewing the effectiveness of the company’s internal audit function. In connection with financial reporting, the committee is responsible for 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. Finally, the committee is responsible for assisting the Board in overseeing the company’s legal and regulatory compliance. The committee also prepares the report the Audit Committee is required to present in the company’s annual proxy statement.

 

The committee approves all non-audit services rendered by the independent auditors only after concluding that performance of such service by the auditor will not impair the auditor’s independence and will serve the company’s interests better than performance of such service by other providers. The committee ensures that such services are consistent with applicable national rules on auditor independence.

 

The Board has determined that all committee members are financially literate under the NYSE listing standards. The Board has further determined that Mr. Presby is an “audit committee financial expert” (as defined under the SEC’s rules and regulations), that he has “accounting or related financial management expertise” and that he is “independent” of the company under SEC rules and the NYSE listing rules. The Board has 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 Committee is chaired by Sir John Banham and consists additionally of Messrs. Adams, Kenney, Kessler and Lawrence. 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. Committee members are appointed and removed by the Board. The committee is required to meet at least quarterly. It also 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 met six times during fiscal year 2007.

 

The committee has a charter which is available on the company’s Web site and which sets forth its responsibilities. These responsibilities include annually evaluating the performance of the chief executive officer and approving the corporate goals relevant to, and determining the amount of, his compensation. The committee also reviews and makes recommendations to the Board concerning the company’s overall

compensation philosophy. It further annually approves the compensation structure for, and the compensation of, senior officers, and it oversees management’s decisions concerning their performance. It further oversees the administration of the company’s equity-based and other incentive compensation plans, assists the Board with executive succession planning, and determines the compensation, including deferred compensation arrangements, for the company’s non-executive directors.

 

The committee oversees the establishment of goals and objectives related to Chief Executive Officer’s compensation, determines the compensation level of the Chief Executive Officer, oversees management’s annual process for evaluating the performance of the senior officers of the company, reviews and approves the compensation of the company’s senior officers and prepares the annual report on executive officer compensation for the company’s proxy statement. The committee also reviews and discusses with management proposed Compensation Discussion and Analysis disclosure and determines whether to recommend it 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. In general, the outside consultant provides an objective assessment of executive compensation including the market competitiveness of base, bonus and equity compensation. The outside consultant is asked to compare and review compensation of the company’s peer group of other publicly traded investment management companies. The committee currently engages Johnson Associates, Inc. (“Johnson Associates”) as its third-party consultant for this review. For a more detailed discussion of the determination of executive compensation, please see the “Compensation Discussion and Analysis” section of this Proxy Statement.

 

The committee meets at least annually to review and make recommendations to the Board on the compensation (including equity-based compensation) of the company’s directors. In reviewing and making recommendations on director compensation, the Committee considers, among other things, the following policies and principles:

 

 

As a part of its review, the committee periodically engages Johnson Associates as a third-party consultant to report on comparable director compensation practices and levels. No executive officer of the company is involved in determining or recommending director compensation levels. See the section of this Proxy Statement entitled “Director Fees” below, for a more detailed discussion of compensation paid to the company’s directors during fiscal year 2007.

 

The Nomination and Corporate Governance Committee is chaired by Mr. Adams and consists additionally of Messrs. Banham, Canion, Kenney, Kessler, Lawrence and Presby. The committee met five times during fiscal year 2007. The committee has a charter which is available on the company’s Web site and which sets forth its responsibilities. These responsibilities 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 shall 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. The committee is responsible for establishing procedures for identifying and evaluating potential nominees for directors 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. The candidates proposed for election in Proposal No. 1 of this Proxy Statement were unanimously recommended by the committee to the Board. The committee is also required to periodically review and reassess the adequacy of the Guidelines to determine whether any changes are appropriate and recommend any such changes to the Board for its approval.

 

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. Bermuda law provides that only Invesco shareholders holding (individually or together) at least 5% of the total voting rights or constituting 100 or more registered Invesco shareholders together may require that a proposal, including a director nomination proposal, be submitted to an annual general meeting. 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 “Shareholder Proposals for the 2009 Annual General Meeting.” The manner in which the committee evaluates candidates recommended by shareholders is generally the same as any other candidate. However, the committee will 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 will 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:

 

 

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. 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.

 

Directors who are Invesco employees do not receive compensation for their services as directors. The Compensation Committee regularly reviews the compensation paid to non-executive directors and recommends changes to Invesco’s Board of Directors as appropriate. Directors do not receive any meeting or attendance fees.

Directors’ Fees

 

Directors’ Fees for 2007.  The following is a description of Invesco’s compensation program for non-executive directors in 2007.

 

Basic Fee — Each non-executive director (other than the Chairman of the Board) received an annual basic fee in the amount of $120,000.

 

Committee Chairman Fee — Each non-executive director who chaired a committee of the Board (other than the Chairman of the Board) received an additional fee of $15,000.

 

Chairman Fee — In lieu of the above, the Chairman of the Board received an annual fee of $400,000.

 

Director Fees Paid in Shares — Each non-executive director also received an award of shares in the amount of $50,000, with the number of shares awarded computed as of the closing price for the common shares on the New York Stock Exchange on December 31, 2007. Such shares may not be sold or otherwise disposed of during the period of the recipient’s service on the Board.

 

Ad Hoc Committee Fee — Messrs. Lawrence and Presby also received a fee of $25,000 each for serving on an ad hoc committee of the Board that oversaw the process of Invesco’s re-listing from the London Stock Exchange to the New York Stock Exchange and the related redomicile from the U.K. to Bermuda, which was completed in December 2007.

 

Directors’ Fees for 2008.  The Compensation Committee has approved the following fee arrangements for non-executive directors who serve during 2008.

 

Basic Fee — For 2008, non-executive directors (other than the Chairman of the Board) will receive an annual basic fee in the amount of $120,000.

 

Chairman Fee — In lieu of the above, the Chairman of the Board will receive an annual fee of $400,000.

 

Audit Committee Chairman — The chairman of the Audit Committee will receive an additional fee of $25,000.

 

Compensation and Nomination and Corporate Governance Committees — The chairman of the Compensation Committee and the chairman of the Nomination and Corporate Governance Committee will each receive an additional fee of $15,000.

 

Director Fees Paid in Shares — Each non-executive director will also receive an award of shares in the aggregate amount of $70,000. Such shares will be paid in four quarterly installments of $17,500, each of which will be paid on the second business day following the public announcement of the company’s quarterly earnings results for the year. The number of shares awarded each quarter will be computed based on the New York Stock Exchange closing price of Invesco common shares on such date. Such shares may not be sold or otherwise disposed of during the period of the recipient’s service on the Board.

 

Director Compensation Table

 

The following table sets forth the compensation paid to our non-executive directors for services during fiscal year 2007.

 

 

 

The aggregate number of stock awards outstanding at December 31, 2007 for each of our non-executive directors was as follows:

 

 

The following table sets forth the common shares beneficially owned as of March 14, 2008 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 416,986,897 common shares outstanding as of March 14, 2008.

 

 

 

 

The following table lists the common shares beneficially owned as of March 14, 2008 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 416,986,897 shares of the company’s common stock outstanding on March 14, 2008.

 

 

 

 

Overview of our Executive Compensation Program

 

Invesco has over the last three years, concurrently with the transformation of its operating model, sought to enhance its compensation practices to increase the alignment of employee incentives with the interests of clients and shareholders. The committee of Invesco’s Board of Directors reviews and determines all components of the compensation for our executive officers. The committee also agrees and oversees the philosophy and objectives of non-executive employee compensation programs. The following discussion provides an overview and analysis of the committee’s philosophy and objectives in designing compensation programs for the company’s executive officers. In this discussion we will address the compensation rationale and determinations relating to our chief executive officer, chief financial officer, and the next three most highly compensated executive officers, whom we refer to collectively as our “named executive officers.”

 

This discussion should be read together with the compensation tables and related narrative for the named executive officers that can be found in this Proxy Statement following this discussion.

Our Compensation Philosophy and Objectives

 

Invesco’s compensation programs are designed to attract, motivate and retain highly qualified executives, senior investment management professionals, sales and marketing professionals and other key employees who are critical to our long-term success in the global marketplace. Invesco seeks to align the design, structure and operation of its compensation programs with its long-term strategic goals that we believe will determine our long- term success. These goals include:

 

 

To support these long-term strategic goals, Invesco’s compensation programs are structured to achieve the following objectives:

 

 

The philosophy and objectives of the Compensation Committee in structuring and administering executive officer compensation are consistent with the design, structure and operation of Invesco’s compensation programs generally, and can be summarized as follows:

 

 

 

 

 

The committee has retained Johnson Associates, Inc. (“Johnson Associates”), a compensation consulting firm, to provide certain information and to advise the Committee in making various compensation decisions, including decisions regarding compensation of executive officers.

 

Benchmarking Performance and Market Compensation

 

Management provides the members of the committee with various reports and information regarding the company’s performance during the fiscal year. These include progress reports on the pursuit of long-term strategic objectives and various financial reports regarding the company and certain of its competitors. Information on the company has included assets under management and flows, investment performance, net revenues, net operating income, net operating margin and earnings per share. Information regarding competitors has included net revenue yield, the ratio of operating income to average assets under management, net operating margin, earnings-per-share (EPS) and relative stock price performance. Competitor financial performance data has been drawn from a peer group of publicly-held investment managers. For 2007, this peer group consisted of the following companies:

 

 

Johnson Associates provides the Committee certain information comparing the compensation of the company’s executive officers to comparable positions at industry peer companies selected by Johnson Associates. The peer group consists of investment management companies considered generally comparable to Invesco and is representative of companies with which Invesco competes for talent. For 2007, this peer group consisted of the following companies:

 

 

Many of these companies participate along with Invesco in the same independent compensation surveys (including the McLagan Study referred to below under “Determination of Company-wide Annual Incentive Pool”). The survey data assists the committee in comparing compensation levels for individual executives as well as the aggregate funding of incentive awards. The group above is used for comparisons of base salaries, cash bonuses and equity pay components. When analyzing this comparable compensation data, Johnson Associates applies various techniques to adjust the data for differences in company size and the scope of executive roles. Johnson Associates uses this data to prepare a benchmarking analysis for each executive officer. This analysis includes information for each of base salary, bonus, short- and long-term incentive compensation, and total compensation. The committee has not established specific market targets for any named executive officer’s pay. The data is used as a reference point and pay for the named executive officers may be any place along the continuum of competitive pay for any of the compensation elements.

Components of Executive Compensation

 

The main elements of executive officer compensation are base salary and variable incentive compensation, consisting of a combination of cash and equity awards based upon the performance-based factors described above. The components are summarized briefly in the table below. A more detailed description of each component follows.

 

 

Base Salary.  The committee believes that executive officer base salaries should be limited to a reasonable base compensation for the day-to-day performance of their job responsibilities. Base salary is designed to provide competitive levels of fixed compensation based upon experience, duties and scope of responsibility. The committee receives data on base salaries of comparable positions at competitor firms as described above. While base salaries are evaluated annually for all named executive officers, in general they remain static unless the individual is promoted or the committee determines that an adjustment is necessary due to compensation trends in the industry.

 

Incentive Compensation.  The committee believes the dominant portion of an executive officer’s compensation should be incentive compensation elements that can vary based on the performance-based factors described above. The committee also believes that executive officers should have a significant ownership position in the company, thereby increasing the alignment of interests between management and our shareholders. As a consequence, the company has emphasized incentive compensation in the form of share awards.

 

Incentive compensation elements generally consist of a combination of an annual cash bonus and share incentive awards. The committee believes that as an executive’s compensation increases, the percentage of that compensation received in the form of share incentive awards should increase. Share incentive awards currently consist of restricted stock awards (“RSAs”). RSAs may be either short-term or long-term. Short-term share awards typically vest in equal increments over three years following grant. Long-term awards typically cliff vest on the third anniversary of grant.

 

Incentive compensation awards to executive officers have been funded from a company-wide annual incentive pool. See “Determination of Company-wide Annual Incentive Pool” below.

 

Benefits.  All executive officers are entitled to receive medical, life and disability insurance coverage and other corporate benefits available to most employees of the company. In addition, U.S.-based executive officers

may also participate in the Invesco 401(k) Plan (“401(k) Plan”) and the Invesco Money Purchase Plan (“MPP”). Similar to the company’s other employees, an executive officer’s eligible compensation contributed to the 401(k) Plan is matched by the company at a specified level. The MPP is a retirement plan for all employees, including executive officers, with tax deferral characteristics similar to the 401(k) Plan. The MPP is funded solely by company contributions that are made annually and are computed on a percentage of the employee’s annual total compensation, subject to a cap. Executive officers residing outside the U.S. may also participate in retirement plans available to all regular employees in their countries.

 

Perquisites.  The company provides certain perquisites to executive officers which assist them in their execution of company business. In the aggregate, perquisites and other benefits represent a small part of the company’s overall compensation package. The committee believes they are reasonable and consistent with its overall compensation plan. For additional information on perquisites and other benefits, please see the Summary Compensation Table and related All Other Compensation Table below.

 

Determination of Company-wide Annual Incentive Pool

 

The committee, as part of its oversight of overall compensation within the company, has a practice of establishing a company-wide annual incentive pool. The pool includes components for funding cash bonuses and share awards to all employees. Incentive awards to executive officers are currently funded from this pool. The size of the award pool is set by the committee as a percentage of the company’s operating income before cash bonus, which represents the company’s operating income, exclusive of extraordinary or unusual charges and restructuring charges and before the accrual of cash bonuses (referred to as pre-cash bonus operating income, or “PCBOI”).

 

Management presents the committee with data showing ranges in percentage terms of PCBOI used for incentive compensation by a peer group of competitors that participate in an industry compensation survey. For 2007, management utilized the McLagan Partners Asset Management Pay & Business Benchmarking Study (“McLagan Study”) to obtain this information. The companies reviewed and reported on by McLagan for this survey included:

 

 

Management derives ranges based on the competitor data and proposes a level of funding that it believes is appropriate. In so doing, management takes into account various factors, most importantly the company’s progress in achieving its long-term strategic goals described above and performance against annual objectives, financial and otherwise, embodied in the annual operating plan, including net operating income, net operating margins and earnings per share.

 

Determination of 2007 Award Pool.  In March 2007 the committee approved a target range for cash bonuses and for equity awards as a percentage of PCBOI that was generally consistent with the median for companies that participated in the McLagan Study. In February 2008, the committee approved a definitive award pool based on 2007 results, which funded 2007 annual cash bonuses and 2008 annual share awards. The 2007 award pool was larger than the 2006 pool and was conservatively in the range obtained from the data in the McLagan Study. In approving the increase, the committee noted the company’s strong operating results for 2007, in particular the following measures: net income for the year was $673.6 million (compared to $482.7 million in 2006); assets under management (AUM) at December 31, 2007 were $500.1 billion, compared with $462.6 billion at the end of 2006. Further, the company’s diluted earnings per share were $1.64 for 2007 (2006: $1.19). Operating income increased 31.0% to $994.3 million, from $759.2 million in 2006. Finally, total dividends for 2007 were $0.372 per share, an increase of 4.2% over the prior year. As a result of the foregoing, 2007 Incentive awards to executive officers increased year over year broadly in line with the increase in the company-wide annual incentive pool.

Role of Individual Objectives

 

The committee believes that in addition to company-wide objectives, individual objectives should be set for executives that are linked to the performance of their respective areas of responsibility. Such goals reflect the role and responsibilities of each position and include performance against relevant aspects of the company’s annual operating plan, including progress against key initiatives designed to support the company’s long-term strategic goals (many of which have aspects cutting across multiple areas or functions) and financial objectives.

 

Effect of 2007 Re-Listing and Redomicile and Reverse-Split Transactions

 

Prior to our re-listing from the London Stock Exchange to the New York Stock Exchange and the related redomicile of the company from the United Kingdom (“U.K.”) to Bermuda on December 4, 2007, Invesco (then known as INVESCO PLC) was organized under U.K. laws. Further, Invesco maintained the status of a “foreign private issuer” under the SEC’s rules and regulations until July 2007. As such, the company was subject to different disclosure and corporate governance standards, including the corporate governance provisions of the U.K. Combined Code. As part of this regime, the committee (then called the Remuneration Committee) was subject to U.K. rules concerning its operations and reporting. The committee published a Remuneration Report for 2006 in accordance with U.K. laws and listing rules, and such report was included in our Annual Report to Shareholders on Form 20-F with respect to the fiscal year ended December 31, 2006, filed with the SEC. The company announced on July 18, 2007 that it had lost its foreign private issuer status

 

In the redomicile, the shareholders of our predecessor company, INVESCO PLC, received common shares in Invesco Ltd., the new Bermuda parent company, in exchange for their Ordinary Shares. Holders of our American Depositary Shares and our Canadian Exchangeable Shares also received Invesco Ltd. common shares in exchange for their holdings. Immediately following the redomicile, Invesco also effected a one-for-two reverse stock split (the “Reverse Split”). All equity compensation awards granted prior to the date of the redomicile were made with respect to Ordinary Shares of INVESCO PLC. Information presented in this Proxy Statement regarding such awards has been adjusted to take into account both the redomicile and the Reverse Split.

 

Thus, 2007 was a transitional year for the company with respect to applicable corporate governance and disclosure standards. In this Proxy Statement, Invesco is complying for the first time with SEC requirements regarding executive compensation disclosure. Similarly, the company remains in a transition period regarding the applicability of NYSE governance standards.

 

Chief Executive Officer’s Compensation

 

Employment Agreement.  The committee’s determination of the CEO’s compensation takes into account the parameters established by his employment agreement with the company. Mr. Flanagan is party to a Master Employment Agreement with Invesco. Under this employment agreement, Mr. Flanagan is employed as the President and Chief Executive Officer of the company for an initial four-year term commencing on August 1, 2005. At the end of the initial term, the employment agreement automatically extends for successive one-year periods unless either party gives 90 days’ prior written notice.

 

Mr. Flanagan’s employment agreement provides for an annual base salary of $790,000 per year and the opportunity to receive cash compensation awards of up to $4,750,000 per year (pro-rated for any periods of less than a full year) based on the achievement of certain performance criteria to be mutually determined by the committee and Mr. Flanagan.

 

The employment agreement further provides that Mr. Flanagan will be eligible to participate in all incentive, savings and retirement plans, all aspects of the deferred compensation program, all welfare benefit plans, practices, policies and programs, fringe benefits and perquisites, and paid vacation and reimbursement of business expenses, all as provided generally to other U.S.-based senior executives of the company. In addition, the employment agreement contains provisions regarding termination of employment that are

described below in the narrative accompanying the “Potential Payments Upon Termination or Change in Control Table.”

 

Award Determinations.  Every year the committee reviews (i) the company’s performance (assessed as described above), (ii) compensation reports regarding the amounts paid to the CEO in prior years as salary, bonus, and short-term and long-term equity (including a sensitivity analysis regarding the CEO’s vested and unvested stock), and (iii) analysis from the committee’s consultant, Johnson Associates, that includes market survey information. Based upon these reviews, the committee determines the CEO’s incentive compensation for the most recently completed fiscal year and reviews his salary for the current fiscal year.

 

Consistent with its stated philosophy, the committee limits the CEO’s base salary opportunity and has structured the majority of the CEO’s potential compensation around incentive grants. In February 2007 the committee determined to maintain Mr. Flanagan’s salary at its pre-existing level of $790,000 per annum. At that time, the Committee also awarded to Mr. Flanagan equity grants detailed in the “Grants of Plan-Based Awards” table below.

 

In February 2008, the committee met to review Mr. Flanagan’s salary and to determine Mr. Flanagan’s incentive compensation for 2007. The Committee again determined to hold Mr. Flanagan’s base salary at $790,000, unchanged since he joined the company in August 2005. The Committee also awarded Mr. Flanagan a cash bonus of $4,750,000 (the maximum annual cash bonus under his employment agreement) and deferred equity awards in the form of RSAs in the aggregate amount of $4,750,000. The Committee based these determinations on the company’s strong operating results for 2007, as described above in “Determination of Company-wide Annual Incentive Pool” and in the company’s Annual Report on Form 10-K for 2007, and the company’s progress in all areas of its strategic objectives.

 

Since the RSA grants described above were not made during fiscal 2007, they are not included in the Summary Compensation Table or the Grants of Plan-Based Awards Table below but will rather be included in such table in next year’s proxy statement, in accordance with SEC rules. $1,500,000 of the total value was granted in the form of restricted shares that vest ratably over three years (“short-term” award) and $3,250,000 of the total was granted in the form of restricted shares that vest three years from the date of grant (“long-term award”).

 

Review by Consultant.  All of the components described above were reviewed by Johnson Associates, who advised the committee that they were reasonable, consistent with market practices, significantly performance based and aligned with company objectives.

 

Compensation of Other Named Executive Officers

 

Throughout 2007, the CEO met in person with the non-executive directors (including the members of the committee) in executive session to discuss a variety of matters, including the development and performance of the other executive officers. In these sessions the CEO would highlight certain goals and objectives he has established for the executive officers, many of which were designed to support the company’s long-term strategic goals. During the February 2008 committee meeting, the CEO summarized his overall evaluation of the 2007 performance of each executive officer (including the other named executive officers), highlighting key accomplishments and professional developments. The CEO also presented a recommendation of incentive compensation awards for each executive officer. The recommendations reflected the company’s strong operating results for 2007, as described above, and the company’s progress in all areas of its strategic objectives, as well as key individual accomplishments (including those noted below for the other named executive officers). Johnson Associates also presented the Committee with data from the benchmarking analysis described above pertaining to base salaries, cash bonuses and equity pay components. In addition, the CEO provided compensation reports which summarize cash and equity paid to each executive officer in prior periods as well as an analysis of the executive’s current unvested equity awards and their associated roll-off schedules. Johnson Associates also reviewed the CEO’s recommendations and provided advice regarding whether they were reasonable and appropriate.

Key individual accomplishments for the other named executive officers reviewed with the Committee included the following:

 

Loren M. Starr, Senior Managing Director and Chief Financial Officer

 

Mr. Starr directs the finance department on a global basis and oversees the financial performance of the organization. Key 2007 accomplishments included (1) enhancing the company’s capital management program; (2) playing a lead role in the company’s re-listing and redomicile; and (3) developing a financial and operating plan for 2007 that would provide for earnings growth while allowing for important reinvestment in the business.

 

Robert J. Yerbury, Senior Managing Director and Chief Executive Officer and Chief Investment Officer of Invesco Perpetual

 

Mr. Yerbury is responsible for Invesco Perpetual and plays a significant role in global initiatives and reviews pertaining to investment matters. Key 2007 accomplishments included (1) the very strong performance of Invesco Perpetual, as reflected in its overall investment results, strong net flows and significant contribution to the company’s overall investment results; (2) his leadership role on the company’s Investors Forum (which brings together senior investment professionals from across the company), and (3) related work on various investment-related cross company initiatives.

 

Philip A. Taylor, Senior Managing Director and Head of North American Retail

 

Mr. Taylor is responsible for the company’s North American retail operations. Key 2007 accomplishments included: (1) delivering operating results that exceeded levels established in the 2007 Operating Plan for the North American retail business; (2) progress in leading the transformation of the company’s AIM operations into a more competitive position; (3) his leadership role in developing a new and unified internal and external brand identity for the company; and (4) success in promoting the cross distribution of additional Invesco capabilities on the North American retail platform.

 

Andrew T.S. Lo, Senior Managing Director & Head of Asia-Pacific

 

Mr. Lo is responsible for Invesco’s Asia-Pacific region. Key 2007 accomplishments included: (1) continued strong growth in the region, reflected in strong asset flows, particularly in the Greater China region; (2) success in promoting the cross distribution of additional Invesco capabilities in the region; and (3) success in assuming a role as a member of the company’s primary senior management team.

 

Award Determinations.  The committee discusses the evaluations, competitive compensation information, individual compensation reports and the CEO’s compensation recommendations for each other named executive officer. Based upon this review, the committee assesses the reasonableness of the compensation recommendations and sets each such person’s incentive compensation for the fiscal year. In February 2007, the committee approved the base salaries that would be in effect commencing March 1, 2007 for the other named executive officers. Consistent with the principles outlined above, the committee elected not to increase the base salaries of any of the named executive officers. At the same time, the committee also approved equity grants for the named executive officers as detailed in the “Grants of Plan-Based Awards” table below.

 

In February 2008, the committee again reviewed base salaries for the other named executive officers and determined to maintain them at pre-existing levels. The committee also approved the bonus payments for the other named executive officers for fiscal year 2007. The cash bonus amounts appear in the compensation tables set forth below. In addition, the committee approved 2008 equity awards in the form of RSAs for the other named executive officers. In accordance with SEC rules, these awards do not appear in the Summary Compensation Table or the Grants of Plan-Based Awards Table below, which sets forth awards made during the year ended December 31, 2007. Messrs. Starr, Yerbury, Taylor and Lo each received a “short-term” equity grant on February 28, 2008, which award will vest ratably over three years. The awards were in the following amounts: Starr: $600,000; Yerbury: $800,000; Taylor: $700,000; and Lo: $700,000. The committee also approved “long-term” equity grants for the Senior Executives, which grants will vest three years from the grant date. The awards were in the following amounts: Starr: $750,000; Yerbury: $1,250,000; Taylor: $1,250,000 and Lo: $1,000,000. The committee based these determinations on the company’s strong operating

results for 2007, as described above, and the company’s progress in all areas of its strategic objectives, as well as key individual accomplishments noted above for the Senior Executives.

 

Tax Considerations

 

The committee will consider the potential impact on the company of Section 162(m) of the Code when designing its compensation programs. Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation greater than $1 million paid for any fiscal year to each of the corporation’s “covered employees” (generally, the chief executive officer and the three most highly compensated executive officers other than the chief executive officer and the chief financial officer 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.

 

While Invesco was a “foreign private issuer” under the SEC’s rules, the company was not subject to the deduction limitations of Section 162(m). Now that Invesco no longer qualifies as a foreign private issuer, the committee has reviewed Invesco’s approaches to incentive and performance-based compensation in light of the impact of Section 162(m). To maximize the deductibility of such compensation, Invesco has included proposals in this Proxy Statement for shareholders to approve the Equity Plan and the Bonus Plan, both of which are structured so that future compensation may satisfy the performance-based compensation exception under Section 162(m) and therefore be deductible.

 

The company expects that performance-based awards granted under the Equity Plan and the Bonus Plan (assuming each such plan is approved by the company’s shareholders) in the form of annual cash bonuses, stock options, restricted stock units or restricted shares should qualify for the performance-based compensation exception to Section 162(m). Nonetheless, the committee believes that shareholder interests are best served by preserving the committee’s discretion and flexibility in crafting compensation programs, even though such programs may result in the payment of certain non-deductible compensation expenses from time to time. Therefore, the committee, while considering tax deductibility as a factor in determining compensation, will not limit compensation to those levels or types of compensation that will be deductible if it believes that the compensation is commensurate with performance.

 

Other Considerations

 

Timing of Awards.  The committee’s general practice is to make award decisions for the previous fiscal year and review salaries of the company’s executive officers in February. This time frame allows the committee to review a full year of the executives’ performance as well as a full year of the company’s performance. In 2008, the committee met to set the level of award on February 1, 2008. The committee determined at that time that share awards would be issued and valued as of February 28, 2008 and that cash bonuses would be paid as part of the final pay cycle in February 2008.

 

COMPENSATION COMMITTEE REPORT

 

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 on Form 10-K for the fiscal year ended December 31, 2007.

 

Respectfully Submitted by the Compensation Committee:

 

Sir John Banham (Chairman), Rex D. Adams, Jerome P. Kenney,¹ Denis Kessler and Edward P. Lawrence

 

 

¹ Jerome P. Kenney was recently elected as a member of the Compensation Committee and was not a member of the committee during and did not participate in the relevant committee determinations that are the subject of this report.

Summary Compensation Table and Narrative Disclosure

 

The narrative, table and footnotes below describe the total compensation paid for fiscal year 2007 to the “named executive officers,” who are Martin L. Flanagan (Invesco’s principal executive officer), Loren M. Starr (Invesco’s principal financial officer), the next three most highly compensated individuals who were serving as executive officers of Invesco on December 31, 2007, together with John D. Rogers (who terminated employment effective February 28, 2007, but who would have otherwise been among the top three most highly compensated executive officers).

 

Each component of total compensation reported in the 2007 Summary Compensation Table is described below. For information on the role of each component within the total compensation package, see the description under the heading “Compensation Discussion and Analysis” beginning on page 19.

 

Salary — This column represents the base salary earned during the fiscal year, including any amounts invested by the named executives in Invesco’s 401(k) Plan.

 

Bonus — This column represents cash bonuses earned by the named executive officers for fiscal 2007 and paid in February 2008.

 

Stock Awards — This column represents compensation expense recognized by Invesco for financial statement reporting purposes in fiscal 2007, computed in accordance with Financial Accounting Standard (FAS) 123R, with respect to the fair value of RSA granted under the Invesco Global Stock Plan in fiscal 2007, as well as compensation expense recognized for RSAs granted in prior years that continue to be expensed under FAS 123R; however, the amounts exclude any forfeiture assumptions related to service-based vesting conditions, as prescribed by SEC rules. Under FAS 123R, compensation expense is calculated using the closing price of Invesco common shares on the date of grant and spread over the vesting period of the RSAs. The amounts in the table reflect Invesco’s accounting expense for the RSAs for fiscal 2007 and do not reflect the value actually realized by the named executive officers.

 

Option Awards — This column represents compensation expense recognized by Invesco in fiscal 2007, in accordance with FAS 123R, with respect to the fair value of options granted in prior years that continue to be expensed under FAS 123R. Pursuant to SEC rules, these amounts exclude any forfeiture assumptions related to service-based vesting conditions. Options are the right to purchase common shares of Invesco at a specified price, over a specified term (usually ten years) following the grant date. The amounts in the table reflect Invesco’s accounting expense in fiscal 2007 for the options and do not reflect the value, if any, that ultimately may be realized by the named executive officers. For additional information on the valuation assumptions relating to the options, see the note on “Share-Based Compensation” to Invesco’s consolidated financial statements contained in its Annual Report on Form 20-F for the fiscal year in which the option was granted.

 

All Other Compensation — This column represents all other compensation for fiscal 2007 not reported in the previous columns, such as Invesco’s contributions to 401(k) plans, payment of insurance premiums, reimbursement of certain tax expenses and the costs to Invesco of providing certain perquisites and benefits.

2007 Summary Compensation Table

 

 

 

 

All Other Compensation Table

 

The following table provides details of the elements that comprise “All Other Compensation” included in the Summary Compensation Table above.

 

 

 

 

Grants of Plan-Based Awards Table and Narrative Disclosure

 

During 2007, the named executive officers received plan-based awards in the form of RSAs. RSAs represent the right to receive a specified number of common shares of Invesco if and to the extent the RSAs vest. All RSAs were granted under the terms of the Invesco Global Stock Plan. The RSAs were of the following two types.

 

Restricted Share Awards — Time-Based Vesting — This type of RSA vests in three equal increments over a three-year period based solely on continued employment with Invesco. These RSAs are generally granted in recognition of the previous year’s performance. Grants received in February 2007 were thus in recognition of achievements during fiscal year 2006.

 

Restricted Share Awards — Performance-Based Vesting — This type of RSA vests on the third anniversary of the grant date if and to the extent a predetermined performance target has been achieved. The performance target is Invesco’s cumulative EPS growth over a three-year performance period. Based upon Invesco’s EPS growth performance, participants may earn none, 50%, 100% or a pro-rata amount between 50% and 100% of the total number of RSAs originally granted. Achievement of compounded three-year EPS growth of 15% or more will result in the maximum payment, achievement of compounded three-year EPS growth of 10% will result in payment of 50% of the shares covered by the award, achievement of compound three-year EPS growth between 10% and 15% will result in a pro rata payment between 50% and 100% of the shares covered by the award and achievement of compounded three-year EPS growth below 10% will result in no shares vesting. These RSAs are generally granted to key employees based on their expected future potential to affect Invesco’s financial performance.

2007 Grants of Plan-Based Awards Table

 

 

 

 

Outstanding Equity Awards at 2007 Fiscal Year-End Table and Narrative Disclosures

 

The table below provides information on the named executive officers’ outstanding equity awards as of December 31, 2007. The equity awards in the table consist of options, and also RSAs, which are reported in the “Stock Award” columns. In connection with the redomicile and the Reverse Split on December 4, 2007, the number of shares of all outstanding awards and the exercise price of all outstanding options were adjusted so that the economic value of each outstanding award after the redomicile and Reverse Split was equivalent to the economic value of the award before such transactions. The information in the table below reflects these adjustments. Following are descriptions of several columns in the table below:

 

Option Awards:

 

Number of Securities Underlying Unexercised Options — Unexercisable  — Represents performance-based options that will vest if and to the extent predetermined performance targets are achieved. Amount represents the value that would be earned if performance targets were achieved.

 

Stock Awards:

 

Market Value of Shares Or Units of Stock That Have Not Vested — This column represents the market value of the unvested RSAs with time-based vesting based on the price per share of $31.38, the closing price of Invesco’s common shares on the NYSE on December 31, 2007.

 

Equity Incentive Plan Awards:  Number of Unearned Shares, Units or Other Rights That Have Not Vested — Represents RSAs that will vest if and to the extent predetermined performance targets are achieved. Amount represents the value that would be earned if “threshold” performance targets were achieved.

 

Equity Incentive Plan Awards:  Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested — This column represents the market value of the unvested and unearned RSAs with performance-based vesting based on the price per share of $31.38, the closing price of Invesco’s common shares on the NYSE on December 31, 2007.

2007 Outstanding Equity Awards at Fiscal Year-End Table

 

The following table provides information as of December 31, 2007 about the outstanding equity awards held by our named executive officers.

 

 

 

 

2007 Option Exercises and Stock Vested Table

 

The following table provides information about exercises of stock options and vesting of Restricted Share Awards during fiscal year 2007 for our named executive officers.

 

 

 

 

Potential Post-Employment Payments

 

Invesco may have certain obligations for payments upon termination of employment of any of the named executive officers. These payments will vary based on agreements in place and the reason for the termination.

 

Chief Executive Officer

 

Mr. Flanagan has a Master Employment agreement with the company which stipulates that 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):

 

 

“Good Reason” is defined in the Master Employment Agreement to include certain diminutions of position, authority, duties or responsibilities, certain reductions in compensation as the same may have been increased from time to time during the employment period, certain involuntary geographic relocations without Mr. Flanagan’s consent, and any failure of a successor entity to expressly assume the obligations of the company under the agreement. In the event that any payments under the agreement are subject to an excise tax under the U.S. Internal Revenue Code, the company will pay Mr. Flanagan a “gross-up” payment that will fully reimburse him for the amount of any associated tax liability.

Other Named Executive Officers

 

The other named executive officers are each parties to agreements that create salary continuation periods ranging from four to twelve months, but do not have any other employment agreements. Pay and benefits in the event of involuntary termination for the other named executive officers are covered by severance plans in each country and the terms of such severance plans are available to regular employees. The majority of Invesco’s obligations in the event of termination of employment are related to equity that has been granted to the named executive officers.

 

Stock Options.  Under our share option plans (unless otherwise provided at the time of grant), an option holder that terminates employment (other than by reason of death, disability or retirement) cannot exercise any unvested options after the termination date. The option holder may exercise the option within a period of six months after termination due to disability. In the event of death, the option holder’s estate may exercise the option within 12 months of such death. Upon retirement, the option holder may exercise options at any time from the date of retirement until the option shall lapse in accordance with the rules and the terms on which the option was granted.

 

Share Awards.  Upon termination of a participant’s employment with the company and its subsidiaries during the applicable vesting or restriction period, unless otherwise provided at the time of grant, any share awards granted to such participant which are not vested shall be forfeited. In the event of a participant’s termination of employment by reason of his death or disability or involuntary termination following a Change in Control (as defined in the Global Stock Plan), any share awards shall immediately vest and any restrictions thereon shall lapse. In the event of retirement, any time-vested shares will vest immediately, while performance-vested shares will be forfeited.

 

Potential Payments Upon Termination or Change in Control Table

 

The following table summarizes the estimated payments to be made under each agreement, plan or arrangement which provides for payments to a named executive officer at, following or in connection with any termination of employment including by resignation, retirement, disability or a Change in Control. However, in accordance with SEC regulations, we do not report any amount to be provided to a named executive officer under any arrangement which does not discriminate in scope, terms or operation in favor of our named executive officers and which is available generally to all salaried employees.

 

 

 

 

 

During fiscal year 2007, the following directors served as members of the Compensation Committee: Rex D. Adams, Sir John Banham, Denis Kessler and Edward P. Lawrence. No member of the Compensation Committee was an officer or employee of the company or any of its subsidiaries during fiscal year 2007, and no member of the Compensation Committee was formerly an officer of the company or any of its subsidiaries or was a party to any disclosable related party transaction involving the company. During fiscal year 2007, none of the executive officers of the company has served on the board of directors or on the compensation committee of any other entity that has or had executive officers serving as a member of the Board of Directors or Compensation Committee of the company.

 

* * *

 

MEMBERSHIP AND ROLE OF THE AUDIT COMMITTEE

 

The Audit Committee of the Board of Directors of Invesco Ltd. consists of J. Thomas Presby (Chairman), and Messrs. Rex D. Adams, Sir John Banham, Jerome P. Kenney, Denis Kessler and Edward P. Lawrence. Each of the members of the Audit Committee is independent as defined under the New York Stock Exchange listing standards and applicable law. The primary purpose of the Audit Committee is to assist the Board of Directors in fulfilling its responsibility to oversee (i) the company’s financial reporting, auditing and internal control activities, including the integrity of the company’s financial statements, (ii) the company’s compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, and (iv) the performance of the company’s internal audit function and independent auditor. The Audit Committee’s function is more fully described in the written charter, which is which is available on the company’s Web site.

 

REVIEW OF THE COMPANY’S AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007

 

The Audit Committee has reviewed and discussed the audited financial statements of the company for the fiscal year ended December 31, 2007 with the company’s management.

The Audit Committee has discussed with Ernst & Young LLP (“E&Y”), the company’s independent registered public accounting firm, the matters required to be discussed by the Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended.

 

The Audit Committee has also received the written disclosures and the letter from E&Y required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and has discussed the independence of E&Y with that firm.

 

Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the Board of Directors that the company’s audited financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 for filing with the Securities and Exchange Commission.

 

Respectfully Submitted by the Members of the Audit Committee:

 

J. Thomas Presby (Chairman)
Rex D. Adams
Sir John Banham
Jerome P. Kenney²

Denis Kessler
Edward P. Lawrence

 

The Audit Committee of the Board, with the ratification of the shareholders, engaged E&Y to perform an annual audit of the Company’s consolidated financial statements for fiscal year 2007.

 

The following table sets forth the approximate aggregate fees billed or expected to be billed to the Company by E&Y for fiscal years 2007 and 2006 for the audit of the Company’s annual consolidated financial statements and for other services rendered by E&Y.

 

 

 

 

 

² Jerome P. Kenney was recently elected as a member of the Audit Committee and was not a member of the committee during and did not participate in the relevant committee determinations that are the subject of this report.

 

PRE-APPROVAL PROCESS AND POLICY

 

The audit and non-audit services provided to the company and its subsidiaries by E&Y during fiscal year 2007 were pre-approved by the Audit Committee. The Audit Committee has adopted policies and procedures for pre-approving all audit and non-audit services provided by E&Y. This policy describes the permitted audit, audit-related, tax and other services that the independent auditors may perform. A copy of the policy is included in this Proxy Statement as Appendix A.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Share Repurchases.  Under a share repurchase program authorized by the Board, the company can repurchase its common shares from time to time on the open market and in private transactions in accordance with applicable securities laws. Pursuant to this repurchase program, the company repurchased its common shares from, among others, certain directors and executive officers since the beginning of 2007. These transactions included repurchases in connection with the payment of taxes on vesting of share awards under the Invesco Global Stock Plan. The price per share paid by the company for repurchases is generally the closing price of the company’s common shares on the NYSE on the day immediately prior to the repurchase date. Since January 1, 2007 and March 12, 2008, the company repurchased common shares from the persons listed for the aggregate consideration shown in the following table:

 

 

In order to pay taxes due in connection with the vesting of RSAs under the Invesco Global Stock Plan, the company uses a net stock issuance method, equivalent to a stock repurchase program, to pay such taxes.

 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires officers, directors and persons who beneficially own more than 10% of the company’s common shares to file reports of ownership on Form 3 and changes in ownership on Forms 4 or 5 with the SEC. The reporting officers, directors and 10% shareholders are also required by SEC rules to furnish the company with copies of all Section 16(a) reports they file.

 

Based solely on its review of copies of such reports received from such executive officers, directors and 10% shareholders, the company believes that all Section 16(a) filing requirements applicable to its directors, executive officers and 10% shareholders were complied with during fiscal year 2007, except that, inadvertently, untimely filings were made by each of Kevin M. Carome, David A. Hartley, John S. Markwalter, Jr. and James I. Robertson, with respect to one report by each of Messrs. Carome and Robertson covering a single transaction, and with respect to two reports covering a single transaction each by each of Messrs. Hartley and Markwalter, in each case related to withholding of shares for the payment of taxes upon the vesting of certain equity awards.

 

RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

GENERAL

 

The Audit Committee of the Board has appointed Ernst & Young LLP as the independent registered public accounting firm to audit the company’s consolidated financial statements for the fiscal year ending December 31, 2008 and to audit the company’s internal control over financial reporting as of December 31, 2008. During and for the fiscal year ended December 31, 2007, Ernst & Young LLP audited and rendered opinions on the financial statements of the company and certain of its subsidiaries. Ernst & Young LLP also rendered an opinion on the company’s internal control over financial reporting as of December 31, 2007. In addition, Ernst & Young LLP provides the company with tax consulting and compliance services, accounting and financial reporting advice on transactions and regulatory filings and certain other services not prohibited by applicable auditor independence requirements. See “Fees Paid to Independent Registered Public Accounting Firm” above. Representatives of Ernst & Young LLP are expected to be present at the Annual General Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions.

 

RECOMMENDATION OF THE BOARD

 

THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2008. The voting requirements for this proposal are described in the “Questions and Answers About Voting Your Common Shares” section above. If the appointment is not ratified, the Audit Committee may reconsider the selection of Ernst & Young LLP as the company’s independent registered public accounting firm.

 

General

 

Our Board of Directors adopted as of March 31, 2008, subject to shareholder approval, the 2008 Global Equity Incentive Plan (the “Equity Plan”). In this proposal the Board of Directors is recommending that the shareholders approve the material terms of the Equity Plan as described below.

 

Summary of the Global Equity Incentive Plan

 

The following description of the Equity Plan is only a summary of certain provisions thereof and is qualified in its entirety by reference to its full text, a copy of which is included as Appendix B to this Proxy Statement.

 

Purpose

 

The purpose of the Equity Plan is to give us a competitive advantage in attracting, retaining and motivating officers, employees, directors and/or consultants and to provide us with an equity plan providing incentives directly linked to shareholder value. If approved by our shareholders at the Annual General Meeting, the Equity Plan will become effective on the date of approval. Following adoption of the Equity Plan, no additional grants will be made under our existing equity incentive plans.

Administration

 

The Equity Plan will be administered by a committee appointed by our Board of Directors consisting of two or more “outside directors” within the meaning of Section 162(m) of the Code who are “non-employee directors” as defined in Rule 16b-3 under the Securities Exchange Act of 1934. It is intended that the Compensation Committee of the Board of Directors will serve as the committee administering the Equity Plan. The committee can make rules and regulations and establish such procedures for the administration of the Equity Plan as it deems appropriate, and may delegate its authority to administer the Equity Plan to one or more persons, subject to applicable law, including the limitations of Section 162(m) of the Code and Section 16 of the Exchange Act. Any determination made by the committee under the Equity Plan will be made in the sole discretion of the committee, and such determinations will be final and binding on all persons.

 

Shares and Other Limits

 

The aggregate number of common shares that may be issued pursuant to awards under the Equity Plan cannot exceed 20,000,000, plus up to 10,000,000 additional shares subject to outstanding awards pursuant to our existing equity plans that are forfeited under such existing equity plans. No participant may be granted, during any calendar year, awards covering in excess of 2,000,000 shares. The maximum number of shares that may be granted pursuant to incentive stock options under the Equity Plan is 6,000,000 shares. These share limits are subject to adjustment in certain circumstances (such as stock splits, mergers and other transactions as the Board of Directors or the committee deems appropriate and equitable). Common shares underlying awards that expire, lapse or are forfeited or terminated without being exercised or awards that are settled in cash, and shares withheld by or delivered to us to satisfy the exercise price or tax withholding obligations related to an award, will not be counted against these share limits.

 

The number of common shares being proposed for reservation for awards under the Equity Plan, and the corresponding individual award limitations, reflect the company’s overall compensation philosophy that is, and is intended to continue to be, greatly weighted on equity compensation for purposes of both annual and long-term incentive compensation. For 2007, approximately 45% percent of our named executive officers’ total compensation consisted of equity-based compensation. The company will continue its established practice of aligning its employees’ interests with those of its shareholders by awarding equity compensation not only to our senior executives but also to non-management employees.

 

Eligibility

 

The Equity Plan provides for awards to the directors, officers, employees and consultants of the company and its affiliates and prospective officers, employees and consultants who have accepted offers of employment or consultancy from the company or its affiliates, except that incentive stock options may only be granted to employees of the company and its subsidiaries. Our current executive officers and each of our directors are among the individuals eligible to receive awards under the Equity Plan.

 

Awards

 

Awards granted under the Equity Plan may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards or any combination of those awards.

 

Stock Options.  Options may be granted as incentive stock options, which are intended to qualify for favorable treatment to the recipient under U.S. federal tax law, or as nonqualified stock options, which do not qualify for this favorable tax treatment. Each option grant will be evidenced by a stock option agreement that specifies the option exercise price, whether the options are intended to be incentive stock options or nonqualified stock options, the duration of the options, the number of shares to which the options pertain and such additional limitations, terms and conditions as the committee may determine.

 

The committee determines the exercise price for each option granted, except that the option exercise price may not be less than 100% of the fair market value of a share on the date of grant. All options granted under the Equity Plan will expire no later than ten years from the date of grant. The methods of exercising an option

granted under the Equity Plan are set forth in the Equity Plan. The granting of an option does not accord the recipient the rights of a shareholder; such rights accrue only after the exercise of the option and the registration of the underlying shares in the recipient’s name.

 

Stock Appreciation Rights.  Stock appreciation rights may be “tandem SARs,” which are granted in conjunction with an option, or “free-standing SARs,” which are not granted in conjunction with an option. A stock appreciation right entitles the holder to receive from the company, upon exercise, an amount equal to the excess, if any, of the aggregate fair market value of a specified number of shares over the aggregate exercise price for the underlying shares. The Equity Plan provides that the exercise price of a free-standing SAR may not be less than 100% of the fair market value of a share on the date of grant. Each stock appreciation right will be evidenced by an award agreement that specifies the date, base price, number of shares to which the stock appreciation right pertains and such additional limitations, terms and conditions as the committee may determine. The methods of exercising a stock appreciation right granted under the Equity Plan are set forth in the Equity Plan.

 

A tandem SAR may be granted on the grant date of the related option, will be exercisable only to the extent that the related option is exercisable and will have the same exercise price as the related option. A tandem SAR will terminate or be forfeited upon the exercise or forfeiture of the related option and the related option will terminate or be forfeited upon the exercise or forfeiture of the tandem SAR.

 

Restricted Stock.  Restricted stock may be subject to performance conditions and/or the continued service of the recipient. Except for these restrictions and any others imposed by the committee, upon the grant of restricted stock, the recipient will have rights of a shareholder with respect to the restricted stock, including the right to vote the restricted stock and to receive all dividends and other distributions paid or made with respect to the restricted stock.

 

Restricted Stock Units.  Restricted stock units are not shares and do not entitle recipients to the rights of a shareholder. Restricted stock units granted under the Equity Plan may be subject to performance conditions and/or the continued service of the recipient. Restricted stock units will be settled in cash or shares.

 

Other Stock-Based Awards.  The Equity Plan also provides for the award of common shares and other awards that are valued by reference to our shares, including unrestricted stock, dividend equivalents and convertible debentures. Awards of unrestricted stock may only be granted in lieu of compensation that would otherwise be payable to the participant.

 

Performance Awards.  The committee may establish performance goals in connection with the grant of awards under the Equity Plan. In the case of an award intended to qualify for the performance-based compensation exception of Section 162(m), the performance goals will be based on attainment of specific levels of performance of the company (or a subsidiary, division or other operating unit of the company) with reference to one or more of the following criteria and the outcome must be substantially uncertain at the time the committee establishes those performance goals.: operating revenues, annual revenues, net revenues, clients’ assets under management (“AUM”), gross sales, net sales, net asset flows, revenue weighted net asset flows, cross selling of investment products across regions and distribution channels, investment performance by account or weighted by AUM (relative and absolute performance), investment performance ratings as measured by recognized third parties, risk adjusted investment performance (information ratio, sharpe ratio), expense efficiency ratios, expense management, operating margin and net operating margin, net revenue yield on AUM, client redemption rates and new account wins and size of pipeline, market share, customer service measures or indices, success of new product launches as measured by revenues, asset flows, AUM, investment performance, profit margin, operating profit margin, earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization), earnings per share, diluted earnings per share growth, operating income, pre- or after-tax income, net income, free cash flow (operating cash flow less capital expenditures), cash flow per share, return on equity (or return on equity adjusted for goodwill), return on capital (including return on total capital or return on invested capital), return on investment, share price appreciation, total shareholder return (measured in terms of stock price appreciation and dividend growth), cost control, business expansion or consolidation, diversification of AUM by investment objectives, growth in global position (AUM domiciled outside of United States), diversified distribution

channels, successful integration of acquisitions, market value of a business or group based on independent third-party valuation or change in working capital.

 

Performance goals will be set by the committee in the manner prescribed by Section 162(m). The committee may adjust performance goals in the event of unusual or non-recurring events and other extraordinary items, except to the extent that doing so would cause an award intended to be exempt from Section 162(m) to fail to be exempt.

 

Change in Control.  Unless otherwise provided in an award agreement, upon a participant’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 participant for Good Reason, awards granted under the Equity Plan will vest in full and no longer be subject to forfeiture. Following such termination, any options or stock appreciation rights that remain outstanding as of the date of such termination of employment may be exercised during the periods set forth in the Equity Plan.

 

In addition, in the case of events affecting the capital structure of the company or certain corporate events such as a merger, the committee will make adjustments and substitutions to awards as it deems appropriate, including in the case of certain corporate events such as a merger, the cancellation of outstanding awards for cash, the substitution of awards or arranging for the assumption of awards, except to the extent doing so would cause an award intended to be exempt from Section 162(m) to fail to be exempt.

 

Termination of Employment/Services.  Unless otherwise provided in an award agreement, options, stock appreciation rights, shares of restricted stock and restricted stock units that are not vested as of a participant’s termination of employment are forfeited. Following such termination, options and stock appreciation rights that are vested as of a participant’s termination may be exercised for the periods set forth in the Equity Plan (but in no event longer than expiration of the original term). Unless otherwise provided in an award agreement, upon a termination of employment by reason of the participant’s death or disability, shares of restricted stock and restricted stock units will fully vest, and upon a participant’s retirement, restricted stock units will vest in accordance with their normal vesting schedule consistent with the terms of the applicable award agreement, provided that the award has been held for at least two years.

 

Upon a participant’s termination for cause, all options, stock appreciation rights, shares of restricted stock and restricted stock units will be forfeited.

 

Transferability.  Awards under the Equity Plan are generally not transferable except by will or the laws of descent and distribution or, with respect to nonqualified stock options and stock appreciation rights that are not tandem SARs, as expressly permitted by the committee.

 

Effective Date; Amendment to Plan

 

The Equity Plan will be effective as of the date it is approved by our shareholders, as requested herein. The Equity Plan will terminate on the tenth anniversary of the effective date.

 

The Board of Directors or the committee may amend, alter or discontinue the Equity Plan, but no amendment, alteration or discontinuation will be made which would materially impair the rights of a participant with respect to a previously granted award without the participant’s consent, except an amendment made to comply with applicable law or stock exchange rules. In addition, no amendment will be made without the approval of the company’s shareholders if such approval is required by applicable law or the listing standards of an applicable exchange, the amendment would materially increase the benefits accruing to participants, the amendment would materially increase the number of securities which may be issued under the Equity Plan or the amendment would materially modify the requirements for participation in the Equity Plan.

 

The committee may unilaterally amend the terms of any award, but no amendment will cause a performance award to cease to qualify for the Section 162(m) exemption or, without the participant’s consent, materially impair the rights of any participant with respect to an award, except such an amendment made to comply with applicable law. In addition, except as provided in the Equity Plan, no option or stock appreciation right may be amended to decrease its exercise price, be cancelled in conjunction with the grant of an option or

stock appreciation right with a lower exercise price, be subject to any action that would constitute a “repricing” for accounting purposes, or, with respect to an option or stock appreciation right with an exercise price less than the then-current fair market value of a share, be cancelled and replaced.

 

U.S. Federal Income Tax Consequences

 

The following is a summary of the material U.S. federal income tax consequences of options that may be granted under the Equity Plan, based upon the U.S. federal tax laws currently in effect. The discussion is general in nature and does not take into account a number of considerations which may apply in light of the circumstances of a particular participant under the Equity Plan. The income tax consequences under applicable foreign, state or local tax laws may not be the same as under U.S. federal income tax laws.

 

Non-Qualified Stock Options.  A participant will not recognize taxable income at the time of a grant of a nonqualified stock option and the company will not be entitled to a tax deduction at such time. A participant will recognize compensation taxable as ordinary income (and be subject to income tax withholding in respect of an employee) upon exercise of a nonqualified stock option equal to the excess of the fair market value of the shares purchased over their exercise price, and the company generally will be entitled to a corresponding deduction.

 

Incentive Stock Options.  A participant will not recognize taxable income at the time of grant of an incentive stock option. A participant will not recognize taxable income (except for purposes of the alternative minimum tax) upon exercise of an incentive stock option. If the shares acquired by exercise of an incentive stock option are held for the longer of two years from the date the option was granted and one year from the date the shares were transferred, any gain or loss arising from a subsequent disposition of such shares will be taxed as a long-term capital gain or loss, and we will not be entitled to any deduction. If, however, the shares are disposed of within such two or one year periods, then in the year of such disposition the participant will recognize compensation taxable as ordinary income equal to the excess of the lesser of the amount realized upon such disposition and the fair market value of such shares on the date of exercise over the exercise price, and the company generally will be entitled to a corresponding deduction. The excess of the amount realized through the disposition date over the fair market value of the shares on the exercise date will be treated as a capital gain.

 

The foregoing general tax discussion is intended for the information of shareholders considering how to vote with respect to this proposal and not as tax guidance to participants in the Equity Plan. Participants are strongly urged to consult their own tax advisors regarding the federal, state, local, foreign and other tax consequences to them of participating in the Equity Plan.

 

New Plan Benefits

 

We currently expect that, if the Equity Plan is approved by our shareholders, the first grants made under the Equity Plan will be to our non-executive directors in July 2008 in respect of non-executive director fees paid in shares. See the section of this Proxy Statement entitled “Director Compensation — Directors’ Fees for 2008” above. The closing price of our shares on the New York Stock Exchange on March 24, 2008 was $24.50 per share.

 

The committee has not yet determined, and we cannot now anticipate, what other grants will be made under the Equity Plan if it is approved. Accordingly, we cannot determine the grants, if any, that the committee may, in its discretion, decide to make to our senior executives under the Equity Plan during the 2008 fiscal year.

 

Required Vote

 

This proposal must receive an affirmative majority of the votes cast at this meeting to approve the 2008 Global Equity Incentive Plan.

 

THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE 2008 GLOBAL EQUITY INCENTIVE PLAN.

 

General

 

Our Board of Directors adopted as of March 31, 2008, and in this proposal is requesting shareholder approval of, the Invesco Ltd. Executive Incentive Bonus Plan (the “Bonus Plan”), as those terms relate to our Covered Employees (as described below).

 

Section 162(m) of the Code generally does not allow publicly held companies to take tax deductions for compensation of more than $1 million paid in any year to any executive officer covered by Section 162(m) of the Code (“Covered Employees”), unless such payments are “performance-based” in accordance with conditions specified under Section 162(m). One of those conditions requires that we obtain shareholder approval of the material terms of the performance goals under which a committee of outside directors will determine the amount of compensation to be paid to Covered Employees.

 

Our Board of Directors recommends that our shareholders approve the material terms of the Executive Incentive Bonus Plan, as those terms relate to our Covered Employees. Subject to such approval, and if the applicable performance goals for the applicable performance period are satisfied, this proposal will enable the company to pay performance-based compensation to our Covered Employees and to take tax deductions for such payments, without regard to the limitations of Section 162(m).

 

Summary of the Bonus Plan

 

The following description of the Executive Incentive Bonus Plan is only a summary of certain provisions thereof and is qualified in its entirety by reference to its full text, a copy of which is included as Appendix C to this Proxy Statement.

 

Purpose

 

The purpose of the Bonus Plan is to establish a program of incentive compensation directly related to the performance of the company. The Bonus Plan provides for annual incentive awards to eligible employees. If approved by our shareholders at the meeting, the Bonus Plan is intended to replace all comparable prior bonus plans with respect to our Covered Employees.

 

Administration

 

The Bonus Plan as applied to our Covered Employees is administered by a committee appointed by our Board of Directors consisting of two or more “outside directors” within the meaning of Section 162(m). It is intended that the Compensation Committee of the Board of Directors will serve as the committee administering the Bonus Plan. Unless determined otherwise by the committee, each bonus to a Covered Employee will be intended to qualify for the performance-based compensation exception to Section 162(m). The committee has all the authority necessary or helpful to enable it to discharge its responsibilities with respect to the Bonus Plan, including authority to determine eligibility for participation, establish goals for each participant, calculate and determine each participant’s level of attainment of such goals, and calculate the bonus for each participant based upon such level of attainment. Except as otherwise specifically limited in the Bonus Plan, the committee has full power and authority to construe, interpret and administer the Bonus Plan.

 

Eligibility

 

The Bonus Plan provides that the committee will designate for each “performance period,” defined as the period during which performance is measured to determine the level of attainment of a bonus, which officers and key employees of the company, if any, will be eligible for bonuses. The performance period will initially be the fiscal year of the company.

Bonus Awards

 

For each performance period, the committee will establish performance goals for each participant, provided that the outcome must be substantially uncertain at the time the committee establishes those performance goals. Participants will earn bonuses based upon the level of attainment of the applicable performance goals during the applicable performance period. The maximum bonus payable to a Covered Employee is $50 million.

 

Performance Goals

 

The performance goals will be based on the attainment of specific levels of performance of the company with reference to one or more of the following criteria provided that the outcome must be substantially uncertain at the time such goals are established: operating revenues, annual revenues, net revenues, clients’ assets under management (“AUM”), gross sales, net sales, net asset flows, revenue weighted net asset flows, cross selling of investment products across regions and distribution channels, investment performance by account or weighted by AUM (relative and absolute performance), investment performance ratings as measured by recognized third parties, risk adjusted investment performance (information ratio, sharpe ratio), expense efficiency ratios, expense management, operating margin, and net operating margin, net revenue yield on AUM, client redemption rates and new account wins and size of pipeline, market share, customer service measures or indices, success of new product launches as measured by revenues, asset flows, AUM, investment performance, profit margin, operating profit margin, earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization), earnings per share, diluted earnings per share growth, operating income, pre- or after-tax income, net income, free cash flow (operating cash flow less capital expenditures), cash flow per share, return on equity (or return on equity adjusted for goodwill), return on capital (including return on total capital or return on invested capital), return on investment, share price appreciation, total shareholder return (measured in terms of share price appreciation and dividend growth), cost control, business expansion or consolidation, diversification of AUM by investment objectives, growth in global position (AUM domiciled outside of United States), diversified distribution channels, successful integration of acquisitions, market value of a business or group based on independent third-party valuation or change in working capital.

 

The committee may adjust performance goals in the event of unusual or non-recurring events and other extraordinary items, except to the extent that doing so would cause a bonus intended to be exempt from Section 162(m) to fail to be exempt.

 

Following the end of the applicable performance period, the committee will certify the attainment of the performance goals and calculate the bonus, if any, payable to each participant. Bonuses will be paid in cash or other consideration determined in the committee’s discretion, including without limitation, common shares of the company or equity awards, which may be subject to vesting conditions determined by the committee. Any common shares or equity awards granted in satisfaction of a bonus will be granted under our equity incentive plans in effect from time to time.

 

The committee retains the right to reduce any bonus in its discretion. In general, a participant must be employed on the date that a bonus is paid to be eligible to receive that bonus, but the committee may in its sole discretion, to the extent permitted under Section 162(m), pay a bonus upon a participant’s death or disability or upon a change in control.

 

Effective Date; Amendment to Plan

 

The Bonus Plan is effective as of January 1, 2008, subject to approval of the shareholders with respect to Covered Employees as requested herein. The committee may amend, suspend or terminate the Bonus Plan at any time, but no amendment may be made without the approval of the company’s shareholders if the effect of such amendment would be to cause outstanding or pending bonuses that are intended to qualify for the performance-based compensation exception to Section 162(m) of the Code to cease to qualify for such exception.

New Plan Benefits

 

Because amounts payable under the Bonus Plan are based on satisfaction of certain performance goals, it cannot be determined at this time what amounts, if any, will be received by participants under the Bonus Plan with respect to the 2008 fiscal year. Subject to shareholder approval of the Bonus Plan with respect to Covered Employees, the committee has designated the Chief Executive Officer and our nine Senior Managing Directors as participants in the Bonus Plan for the performance period of January 1, 2008 through December 31, 2008. The foregoing individuals represent the senior management team and are key employees of the company.

 

We believe that, if the Bonus Plan had been in effect for the 2007 fiscal year, the bonus amounts paid to participants during that period would not have been materially different from the bonus amounts actually paid for the 2007 fiscal year. We describe the bonus amounts paid to the named executive officers with respect to the 2007 fiscal year in the “Summary Compensation Table” at page 28 of this Proxy Statement.

 

Required Vote

 

This proposal must receive an affirmative majority of the votes cast at this meeting to approve the 2008 Executive Incentive Bonus Plan as it relates to our Covered Employees.

 

THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE INVESCO LTD. EXECUTIVE INCENTIVE BONUS PLAN.

 

INFORMATION REGARDING OTHER EQUITY COMPENSATION PLANS

 

The following table sets forth the information indicated as of December 31, 2007.

 

 

 

 

The material features of the plans that have not been approved by shareholders are set forth in Note 19 to the Consolidated Financial Statements of Invesco Ltd. for the year ended December 31, 2007, as contained in the company’s Annual Report on Form 10-K for the fiscal year ended on December 31, 2007, filed with the SEC on February 29, 2008.

 

Costs of Solicitation

 

The cost of solicitation of proxies will be paid by Invesco. Invesco has engaged Georgeson Inc. as the proxy solicitor for the Annual General Meeting for an approximate fee of $12,500. In addition to the use of the mails, certain Directors, officers or employees of Invesco may solicit proxies by telephone or personal contact. Upon request, Invesco will reimburse brokers, dealers, banks and trustees or their nominees for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of common shares.

 

Presentation of Financial Statements

 

In accordance with Section 84 of the Companies Act 1981 of Bermuda, Invesco’s audited consolidated financial statements for the fiscal year ended December 31, 2007 will be presented at the Annual General Meeting. These statements have been approved by Invesco’s Board. There is no requirement under Bermuda law that these statements be approved by shareholders, and no such approval will be sought at the Annual General Meeting.

 

Registered and Principal Executive Offices

 

The registered office of Invesco is located at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda. The principal executive offices of Invesco are located at 1360 Peachtree Street, Atlanta, Georgia 30309, and the telephone number there is 404-892-0896.

 

Shareholder Proposals for the 2009 Annual General Meeting

 

In accordance with the rules established by the SEC, any shareholder proposal submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the “Exchange Act”) intended for inclusion in the proxy statement for next year’s annual general meeting of shareholders must be received by Invesco no later than 120 days before the anniversary of the date of this proxy statement. Such proposals should be sent to our Secretary in writing to Invesco Ltd., Attn: Office of the Secretary, 1360 Peachtree Street N.E., Atlanta, Georgia 30309. To be included in the Proxy Statement, the proposal must comply with the requirements as to form and substance established by the SEC and our Bye-Laws, and must be a proper subject for shareholder action under Bermuda law.

 

A shareholder may otherwise propose business for consideration or nominate persons for election to the Board in compliance with U.S. federal proxy rules, Bermuda law, our Bye-Laws and other legal requirements, without seeking to have the proposal included in Invesco’s proxy statement pursuant to Rule 14a-8 under the Exchange Act. Bermuda law provides that only Invesco shareholders holding (individually or together) at least 5% of the total voting rights or constituting 100 or more registered Invesco shareholders together may require a proposal to be submitted to an annual general meeting. Under our Bye-Laws, notice of such a proposal must generally be provided to our Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual general meeting. The period under our Bye-Laws for receipt of such proposals for next year’s meeting is thus from January 14, 2009 to February 13, 2009. (However, if the date of the annual general meeting is more than 30 days before or more than 60 days after such anniversary date, any notice by a shareholder of business or the nomination of directors for election or reelection to be brought before the annual general meeting to be timely must be so delivered (i) not earlier than the close of business on the 120^th day prior to such annual general meeting and (ii) not later than the close of business on the later of (A) the 90^th day prior to such annual general meeting and (B) the 10^th day following the day on which public announcement of the date of such meeting is first made. )

 

Under Rule 14a-4 under the Exchange Act, proxies may be voted on matters properly brought before a meeting under these procedures in the discretion of the proxy holders, without additional proxy statement disclosure about the matter, unless Invesco is notified about the matter not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual general meeting and the proponents otherwise

satisfy the requirements of Rule 14a-4. The period under our Bye-Laws for receipt of such proposals for next year’s meeting is thus from January 14, 2009 to February 13, 2009.

 

United States Securities and Exchange Commission Reports

 

A copy of the company’s Annual Report on Form 10-K, including financial statements, for the fiscal year ended December 31, 2007 (the “Annual Report”), is being furnished concurrently herewith to all shareholders holding common shares as of the record date. Please read it carefully.

 

Shareholders may obtain a copy of the Annual Report, without charge, by visiting the company’s Web site at www.invesco.com or by submitting a request to our Secretary at: company.secretary@invesco.com or by writing Invesco Ltd., Attn: Office of the Secretary, 1360 Peachtree Street N.E., Atlanta, Georgia 30309. Upon request to our Secretary, the exhibits set forth on the exhibit index of the Form 10-K may be made available at reasonable charge (which will be limited to our reasonable expenses in furnishing such exhibits).

 

Communications with the Chairman and Non-Management Directors

 

Any interested party may communicate with the Chairman of our Board or to our non-executive directors as a group at the following addresses:

 

E-mail: company.secretary@invesco.com
Mail: Invesco Ltd.

1360 Peachtree Street

Atlanta, Georgia 30309

Attn: Office of the Secretary

 

Communications will be distributed to the Board, or to any of the Board’s committees or individual directors as appropriate, depending on the facts and circumstances of the communication. In that regard, the Invesco Board does not receive certain items which are unrelated to the duties and responsibilities of the Board.

 

In addition, the company has established separate procedures for its employees to submit concerns on an anonymous and confidential basis regarding questionable accounting, internal accounting controls or auditing matters and possible violations of the company’s Code of Conduct or law, which are available on the company’s Intranet.

 

Non-employees may submit any complaint regarding accounting, internal accounting controls or auditing matters directly to the Audit Committee of the Board of the Directors by sending a written communication appropriately addressed to:

 

Audit Committee
Invesco Ltd.
1360 Peachtree Street
Atlanta, Georgia 30309
Attn: Office of the General Counsel

 

Householding of Proxy Materials

 

The SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement and annual report addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.

 

A number of banks and brokers with account holders who are beneficial holders of the company’s common stock will be householding the company’s proxy materials or the Notice. Accordingly, a single copy of the proxy materials or Notice will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your bank

or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive separate proxy materials or copies of the Notice, please notify your bank or broker, or contact the our Secretary at: company.secretary@invesco.com or 1360 Peachtree Street Atlanta, Georgia 30309. The company undertakes, upon oral or written request, to deliver promptly a separate copy of the company’s proxy materials or the Notice to a shareholder at a shared address to which a single copy of the applicable document was delivered. Shareholders who currently receive multiple copies of the proxy materials or the Notice at their address and would like to request householding of their communications should contact their bank or broker or the company’s Investor Relations Department at the contact address and telephone number provided above.

 

By order of the Board of Directors,

 

Kevin M. Carome, Secretary

 

April 1, 2008

 

INVESCO LTD.

1360 PEACHTREE STREET NE, ATLANTA, GEORGIA 30309

 

Important Notice Regarding the Availability of Proxy Materials

for the Shareholder Meeting to be Held on

Wednesday, May 14, 2008

 

 

This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.

 

If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed below on or before April 30, 2008 to facilitate timely delivery.

 

Dear Invesco Shareholder:

 

The 2008 Annual General Meeting of Shareholders of Invesco Ltd. (the “Company”) will be held in the Walter C. Hill Auditorium at the High Museum of Art, 1280 Peachtree Street NE, Atlanta, Georgia 30309, on Wednesday, May 14, 2008, at 1:00 p.m. (local time). The following proposals will be voted upon at the Annual General Meeting:

 

(1) to elect three directors to serve until the 2011 Annual General Meeting;

 

(2) to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm;

 

(3) to approve the Invesco Ltd. 2008 Global Equity Incentive Plan;

 

(4) to approve the Invesco Ltd. Executive Incentive Bonus Plan; and

 

(5) to consider and act upon any other business that may properly come before the meeting or any adjournment(s) thereof.

 

The Board of Directors recommends a vote “FOR” Items 1 through 4.

 

The record date for the Annual General Meeting is March 14, 2008. Only shareholders of record at the close of business on that date may vote at the meeting or any adjournment thereof. Shareholders of record are cordially invited to attend the Annual General Meeting. Directions on how to attend the Annual General Meeting and vote in person can be found on our website at: www.invesco.com/invest.  

 

ACCESSING YOUR PROXY MATERIALS ONLINE

 

The Proxy Materials for Invesco Ltd. are available to review at:

 

http://bnymellon.mobular.net/bnymellon/ivz

 

 

The following Proxy Materials are available for you to review online:

 

 

To request a paper copy of the Proxy Materials, please call 1-888-313-0164, (outside the U.S. and Canada 201- 680-6688) or you may request a paper copy by email at shrrelations@bnymellon.com,or by logging on to http://bnymellon.mobular.net/bnymellon/ivz

 

Have this Notice available WHEN YOU WANT TO VIEW your Proxy Materials online

or WHEN YOU WANT TO VOTE YOUR PROXY ELECTRONICALLY

or WHEN YOU WANT TO REQUEST A PAPER COPY of the Proxy Materials.

 

AUDIT COMMITTEE PRE-APPROVAL POLICY

 

I.  Statement of Principles

 

The Audit Committee must pre-approve the audit and non-audit services performed by the independent auditor in order to ensure that the provision of such services does not impair the auditor’s independence. Before the Company or any of its subsidiaries engages the independent auditor to render a service, the engagement must be either:

 

(1) specifically approved by the Audit Committee; or

 

(2) entered into pursuant to this Pre-approval Policy.

 

The Audit Committee shall review and discuss with the independent auditor any documentation supplied by the auditor as to the nature and scope of any tax services to be approved, as well as the potential effects of the provision of such services on the auditor’s independence.³

 

The appendices to this Pre-approval Policy describe in detail the particular audit, audit-related, tax and other services that have the pre-approval of the Audit Committee pursuant to this Pre-approval Policy. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee shall periodically revise the list of pre-approved services.

 

II.  Delegation

 

The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee may not delegate to management the Audit Committee’s responsibilities to pre-approve services performed by the independent auditor.

 

III.  Audit Services

 

The Audit Committee must specifically pre-approve the terms of the annual audit services engagement. The Audit Committee shall approve, if necessary, any changes in terms resulting from changes in audit scope, Company structure or other matters.

 

In addition to the annual audit services engagement approved by the Audit Committee, the Audit Committee may grant pre-approval for other audit services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved the audit services listed in Appendix A. All other audit services not listed in Appendix A must be specifically pre-approved by the Audit Committee.

 

IV.  Audit-related Services

 

Audit-related services, including internal control-related services, are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and/or the Company’s internal control over financial reporting and that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of audit-related services does not impair the independence of the auditor, and has pre-approved the audit-related services listed in Appendix B. All other audit-related services not listed in Appendix B, and all internal control-related services, must be specifically pre-approved by the Audit Committee.

 

 

³ This flows from PCAOB Rule 3524, PCAOB Release No. 2005-014 (July 26, 2005).

V.  Tax Services

 

The Audit Committee believes that the independent auditor can provide tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee shall scrutinize carefully the retention of the independent auditor in connection with any tax-related transaction initially recommended by the independent auditor. The Audit Committee has pre-approved the tax services listed in Appendix C. All tax services not listed in Appendix C must be specifically pre-approved by the Audit Committee.

 

VI.  Other Services

 

The Audit Committee may grant pre-approval to those permissible non-audit services classified as other services that it believes would not impair the independence of the auditor, including those that are routine and recurring services. The Audit Committee has pre-approved the other services listed in Appendix D. Permissible other services not listed in Appendix D must be specifically pre-approved by the Audit Committee.

 

A list of the SEC’s prohibited non-audit services is attached to this Pre-approval Policy as Exhibit 1. The rules of the SEC and the PCAOB and relevant guidance should be consulted to determine the precise definitions of these services and the applicability of exceptions to certain of the prohibitions.

 

VII.  Pre-approval Fee Levels

 

The Audit Committee may consider the amount or range of estimated fees as a factor in determining whether a proposed service would impair the auditor’s independence. Pre- approval fee levels or established amounts for services to be provided by the independent auditor will be set annually by the Audit Committee. Where the Audit Committee has approved an estimated fee for a service, the pre-approval applies to all services described in the approval. However, in the event the invoice in respect of any such service is materially in excess of the estimated amount or range, the Audit Committee must approve such excess amount prior to payment of the invoice. The Audit Committee expects that any requests to pay invoices in excess of the estimated amounts will include an explanation as to the reason for the overage.⁴ The Company’s independent auditor will be informed of this policy.

 

VIII.  Supporting Documentation

 

With respect to each proposed pre-approved service, the independent auditor must provide the Audit Committee with detailed back-up documentation regarding the specific services to be provided.

 

IX.  Procedures

 

The Company’s management shall inform the Audit Committee of each service performed by the independent auditor pursuant to this Pre-approval Policy.

 

Requests or applications to provide services that require separate approval by the Audit Committee shall be submitted to the Audit Committee by both the independent auditor and the Chief Financial Officer, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s and the PCAOB’s rules on auditor independence.

 

As adopted February 27, 2008

 

 

⁴ It is understood that estimated amounts that are denominated in dollars but are ordinarily paid in another currency are subject to foreign exchange rate fluctuations. Thus, variances from estimated amounts arising as a result of changes in foreign currency exchange rates from the time of preparation of the relevant approval request will not be considered to be variances from the budgeted amount and payment of the related invoices will not require a subsequent approval.

Appendix A

 

Pre-Approved Audit Services for Fiscal Year 2008

 

Dated: February 27, 2008