Invesco (IVZ) DEF 14ADefinitive proxy

Proxy

Statement

Notice of 2023 Annual General Meeting of Shareholders

		Your vote is important: Please vote by using the Internet, the telephone or by signing, dating and returning a proxy card

Invesco

A leading independent global investment management firm

Our single focus is to help clients achieve their investment objectives

Our purpose

Delivering an investment experience that helps people get more out of life

		Our multi-year strategic objectives
		•  Achieve strong investment performance
		•  Be instrumental to our clients’ success
		•  Harness the power of our global platform
		•  Perpetuate a high-performance organization
		Our beliefs put clients at the center of everything we do
		•  Pure focus on investing
		•  Passion to exceed
		•  Diversity of thought and a collaborative culture
		•  A comprehensive range of capabilities enables us to meet the unique needs of clients
		•  A high-conviction approach is more impactful
		•  Patience leads to better results over time
		Our beliefs enable us to
		•  Inspire the consistent behaviors and discipline that help generate strong, long-term investment performance for our clients
		•  Maintain an engaging work environment that helps us attract, develop, motivate and retain the best talent in the industry

1. December 31, 2022.

Notice of 2023 Annual Meeting of Shareholders

    

Date and time
		Thursday, May 25, 2023, at 1:00 p.m.,
		Eastern Time
Place
		Virtual Meeting www.meetnow.global/
		MW974DT
		For details on how to participate in the virtual meeting, see “How do I attend the Annual
		General Meeting” on page 82
Voting methods
		Internet
		Visit the web site listed on your Notice
		Telephone
		Call the telephone number listed on your Notice
		Mail
		Sign, date and return a requested proxy card
		Virtually
		Attend the virtual
		Annual General
		Meeting

Items of business				Board voting  recommendation
1		To elect twelve (12) directors to the Board of Directors to hold office until the annual general meeting of shareholders in 2024				FOR
2		To hold an advisory vote to approve the compensation paid to our named executive officers				FOR
3		To hold an advisory vote on the frequency of holding future advisory votes on the compensation paid to our named executive officers				FOR EVERY     ONE YEAR
4		To amend and restate the Invesco Ltd. Third Amended and Restated Bye-Laws to eliminate certain super majority voting standards				FOR
5		To appoint PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the year ending December 31, 2023				FOR
6		To consider and act upon such other business as may properly come before the meeting or any adjournment thereof

Who can vote

Only holders of record of Invesco Ltd. common shares on March 17, 2023 are entitled to notice of, to attend and vote at the Annual General Meeting and any adjournment or postponement thereof. Beginning on March 31, 2023, we mailed a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access this Proxy Statement and our Annual Report via the Internet to eligible shareholders.

During the Annual General Meeting, the audited consolidated financial statements for the year ended December 31, 2022 of the company will be presented.

By order of the Board of Directors,

Robert H. Rigsby

Company Secretary

March 31, 2023

Your Board remains optimistic about the future of the industry and the long-term success of Invesco. We are confident in the firm’s long-term strategy, and in the leadership team’s ability to execute that strategy.

On behalf of the Invesco Board of Directors, I thank you for your continued support.

Sincerely,

G. Richard Wagoner, Jr.

Chair

For the full year, ETFs brought in $28 billion of net long-term inflows, equivalent to an 11% organic growth rate.² Our ETF lineup remains highly differentiated in the marketplace, with a focus on higher-value, higher-revenue market segments like smart beta, and we continue to drive innovation with products such as our QQQ innovation suite.

Our Institutional Channel and Fixed Income capabilities have been pillars of organic growth for several years now, generating net inflows for 13 and 16 consecutive quarters, respectively.² Our Institutional pipeline was $30 billion at the end of the year, enabled in part by our highly regarded Solutions capability. The pipeline reflects a diverse business mix that has helped Invesco sustain organic growth in the channel throughout the year. We achieved strong outperformance in our Fixed Income capabilities in 2022, with 80%, 84% and 98% of AUM ranked in the top half of peer group over 3, 5 and 10 years, respectively.³ As interest rates stabilize, we have a significant opportunity to capture further growth in Fixed Income capabilities in the future.

Our business in Greater China performed exceptionally well in 2022, building on our leadership position in the world’s fastest-growing asset management market. For the full year, our China joint venture delivered $7 billion of net long-term inflows, equivalent to an 11% organic growth rate, and our total AUM in China was $95 billion at yearend.² Market sentiment in China may be mixed in the near term as the country works through a transition period of higher COVID infections, stabilizing interest rates and redemptions return to a more moderate level. That said, there are also signs that the outlook for the remainder of 2023 is improving, and I’m optimistic for a return to organic growth.

By maintaining momentum in key capability areas, the firm achieved break-even total net long-term flows for the full year 2022, despite experiencing the most challenging equity and bond markets in decades. Total AUM at the end of 2022 stood at $1.4 trillion, down from $1.6 trillion at the end of 2021. We entered 2023 with a strong balance sheet, which gives us meaningful flexibility to operate strategically in a challenging environment and positions Invesco well for the future. Total debt of $1.5 billion was at the lowest level in 10 years, with a credit facility balance of $0 and cash and cash equivalents of more than $1.2 billion at the end of the year.

Shaping our business for clients and for the future

We operate in a $100 trillion industry that will continue to grow – by some estimates expanding to $145 trillion over the next few years.⁴ We have a clear understanding of how client demand is evolving and where it’s headed. We’ve built a truly global asset management platform with exceptional investment teams and a strong presence in key regions around the world, supported by an operating platform that delivers a high level of value to our clients and our shareholders. We’ve also created one of the most comprehensive ranges of capabilities in the industry, which enables us to help a broad range of clients meet their investment objectives.

Over the past decade, we’ve been highly focused on investing ahead of shifts in client demand, which positions us very well for the future. We made deliberate, future-focused choices in building our firm, guided by three core questions:

Our aspirations

We are highly optimistic about the future for global asset managers. Our industry will continue to expand as new wealth is created and the number of people retiring further expands. At the same time, the industry is changing rapidly. Client needs are evolving, the bar for quality is constantly rising and technology is creating new opportunities for customization at scale.

Against this backdrop, we aspire to set the standard for the industry. Our aspirations are:

These three pillars will enable us to deliver as a fiduciary for our clients, help us achieve both the growth and efficiency needed for us to continue to succeed, and create a top-tier employee experience.

Helping our diverse talent across the globe thrive

To achieve our purpose of helping our clients and employees get more out of life, we believe our workforce should reflect the diversity of people and perspectives of the communities we serve. We believe that diversity, equity and inclusion (DEI) are both moral and business imperatives, and we’re committed to improving DEI across our global business.

Our commitment to DEI spans every level of our organization, and Invesco leaders have annual performance goals that drive DEI priorities within their business units and across the firm. Executives also lead and sit on our Diversity and Inclusion Executive Committee, helping to drive our agenda further and ensure accountability across the organization. As an example of our progress, from 2018 to 2022, we increased the female representation of senior managers at Invesco from 27% to 37% globally.

We continue to expand and strengthen our employee-led business resource groups (BRGs) across the globe which enable us to promote understanding, support the needs of our diverse communities and connect our employees. These BRGs and their activities are sponsored by me and our Senior Managing Directors, supported by our senior leaders across the business, cascaded to our employees and are captured in the firm’s business plans.

Although we’re pleased with our progress in these areas, we recognize there is more to do, and we are committed to further expanding our DEI efforts and enhancing the employee experience in 2023 and beyond.

Leadership transition

As you’ll have seen in the shareholder letter from our Chair, Rick Wagoner, Invesco announced in early February that I plan to retire as President and CEO on June 30 of this year. I will continue as Chairman Emeritus through December 31, 2024, providing advice and guidance to the company.

It has been my great privilege to lead Invesco for more than 18 years, working with my 8,000 colleagues across the globe to build a truly global asset manager with exceptional investment teams and a strong presence in key regions around the world that help us deliver a high level of value to our clients and our shareholders.

You’ll have also read that Andrew Schlossberg, who serves as Senior Managing Director and Head of our Americas business, and who has been with Invesco since 2001, will become President and CEO, and join the Invesco Board, on June 30.

I’ve worked side-by-side with Andrew throughout my career at Invesco and have found him to be an exceptional leader who is highly focused on delivering the best possible experiences for our clients, employees and shareholders. The next generation of leadership talent at Invesco is the strongest the company has ever had. I have every confidence that Andrew and the Executive Leadership Team – comprising Stephanie Butcher (Co-Head, Investments), Allison Dukes (Chief Financial Officer), Mark Giuliano (Chief Administrative Officer), Jennifer Krevitt (Human Resources), Jeff Kupor (Legal), Andrew Lo (Head of Asia Pacific), Doug Sharp (Head of Americas, EMEA and ETFs) and Tony Wong (Co-Head, Investments) – will further strengthen our momentum to take the business forward.

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Conclusion

Looking ahead, we are partnering with our clients to meet their most pressing needs in this dynamic environment. We’ve dedicated the past decade to building a breadth of investment capabilities, solutions mindset, and operating scale at Invesco that few in our industry can match. I am proud of all that our talented employees accomplished in 2022 on behalf of our clients and stakeholders and I am optimistic for a return to organic growth when market volatility eases. Market direction may remain uncertain, but I am confident that Invesco is prepared to meet challenges that arise in 2023 and well positioned for future growth.

Contents

Helpful resources

    

Proxy Statement summary

2022 was a year of significant headwinds and volatility in global financial markets. Most major equity and bond indices declined significantly and, coupled with rising interest rates and high inflation, resulted in the worst markets we have experienced in decades. Despite the industry challenges in 2022, we were pleased to see our key capability areas continue to deliver organic growth, overcoming the preference of some investors to seek increased allocations to risk-off assets. We are thoughtfully navigating near-term market headwinds while managing capital and resource investments for long-term growth. The firm maintains a strong balance sheet and finished 2022 with the lowest level of long-term debt in ten years. As always, we are partnering with our clients to meet their most pressing needs in this dynamic economic and industry climate and we are optimistic that our diversified platform of investment capabilities is poised for profitable organic growth when market volatility eases.

 

2022 Financial performance

 

Net long-

Adjusted

Adjusted

Adjusted

term flows

Net revenue1

operating income1

operating margin1

diluted EPS1

-$0.5B

$4,645M

$1,615M

34.8%

$1.68

 

2022 Firm highlights1
		Business   •  In 2022, ETFs brought in $28 billion of net long-term inflows, equivalent to an 11% organic growth rate. Our ETF line-up remains differentiated from most competitor offerings, with a focus on higher-value, higher revenue market segments like smart beta. •  Our business in greater China performed exceptionally well in 2022, building upon our leading position in the world’s fastest growing market for asset management. Our China joint-venture delivered $7 billion of net long-term inflows, an 11% organic growth rate, and we are gaining market share as we continue to innovate and launch new products. •  Fixed Income capabilities delivered $17 billion of net long-term inflows during the year, a 6% annualized organic growth, despite the challenging global bond markets. These strategies have now experienced 16 consecutive quarters of net inflows, demonstrating success across the full business cycle. •  The Institutional Channel has been a steady source of growth and, as of the fourth quarter 2022, has achieved 13 straight quarters of net inflows. For calendar year 2022, the Institutional Channel achieved net inflows of $13 billion, or a 4% organic growth rate. •  Lower client demand for active global equities industry-wide pressured net flows in Developing Markets, Global Equities, and International Equities, which led to $20 billion in net outflows in these strategies in 2022. This dynamic also contributed to net revenue declines in 2022, as several of these strategies are higher yielding.

 

1. Represents or includes non-GAAP financial measures. See the information in Appendix A regarding non-GAAP financial measures.

 

 

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What’s new?   We continually review our approach to corporate governance and compensation to make certain that Invesco is in a position to provide an investment experience that helps people get more out of life. This year’s new or updated items include:
•  Presentation of Board skills and experience in a matrix format – see Qualifications, skills and experience of directors on page 5 •  Added Political engagement and oversight section on page 22				•  Enhanced disclosures regarding Board oversight – see Board’s role in risk oversight on page 21

 

Governance highlights

 

				Board refreshment •  Added one new director to the Board in February 2023, further increasing Board diversity. •  Another new director to join the Board in April 2023. •  Directors may not stand for election after age 75.
				Independence •  11 of our 12 director nominees are independent. •  Our chief executive officer is the only management director. •  All of our Board committees are composed exclusively of independent directors.
				Independent Chair •  We have an independent Chair of our Board of Directors, selected by the independent directors. •  The Chair serves as liaison between management and the other independent directors.
				Accountability •  Directors are elected for a one-year term. •  A meeting of shareholders may be called by shareholders representing at least 10% of our outstanding shares.

		Board practices •  Our Board annually reviews its effectiveness as a group with a questionnaire and confidential one-on-one interviews coordinated by an independent external advisor that reports results of the annual review in person to the Board. •  Nomination criteria are adjusted as needed to ensure that our Board as a whole continues to reflect the appropriate mix of skills and experience.
		Executive sessions •  The independent directors regularly meet in private without management. •  The Chair presides at these executive sessions.
		Share ownership requirements •  We require directors and executives to maintain an ownership level of our stock.
		Proxy access •  Group of up to 20 shareholders who own at least 3% of outstanding shares for at least three years may include director nominees that constitute up to 20% of our Board in our proxy.

 

 

Board oversight The full Board has oversight responsibility for the company’s enterprise risk management program and processes. This includes oversight over the management of material risks with respect to the company’s business, including business strategy, financial performance, investments, operations, technology (including cyber security), regulatory compliance, governance, human capital management, and environmental and social matters.

 

3        Invesco Ltd.

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Board of Directors

Nominee biographies

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Retiring director

Director independence

Board meetings and annual general meeting of shareholders

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Service on other public company boards

Each of our directors must have the time and ability to make a constructive contribution to the Board as well as a clear commitment to fulfilling the fiduciary duties required of directors and serving the interests of the company’s shareholders. Our President and CEO does not currently serve on the board of directors of any other public company, and none of our current directors serves on more than four public company boards, including our Board.

Committee membership and meetings

Director compensation

The compensation committee annually reviews and determines the compensation paid to non-executive directors. No executive officer of the company is involved in recommending or determining levels of non-executive director compensation. Mr. Flanagan does not receive compensation for his service as a director. The committee considers, among other things, the following policies and principles in determining non-executive director compensation:

As a part of its annual review, the committee engaged Johnson Associates, Inc. (“Johnson Associates”), the committee’s independent compensation consultant, to report on comparable non-executive director compensation practices and levels. Their report included a review of director compensation at the same peer companies the committee considers for executive compensation practices. See page 61 for a list of our 2022 peers.

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For fiscal 2022, the compensation committee approved the below-described levels of non-executive director compensation. Each component other than the equity award is paid in quarterly installments in arrears:

For fiscal 2023, the compensation committee determined that no changes would be made to levels of non-executive director compensation for the 2023 service period.

We also reimburse each of our non-executive directors for their travel expenses incurred in connection with attendance at Board of Directors and committee meetings. Directors do not receive any meeting or attendance fees. Invesco does not have a deferred compensation plan for its directors.

Director compensation table¹

The following table sets forth the compensation paid to our non-executive directors during 2022.

Stock ownership policy for non-executive directors — All shares granted to our non-executive directors are subject to the Non-Executive Director Stock Ownership Policy. Commencing February 2022, the policy requires each non-executive director to (i) achieve and thereafter maintain an ownership level that is equal to four times the value of the basic cash fee and (ii) meet the policy requirement within five years of the later of the effective date of the policy or first appointment as a non-executive director. Until such ownership level is achieved, each non-executive director is required to (i) continue to hold 100% of the shares received as compensation prior to the effective date, and (ii) retain at least fifty percent (50%) of shares granted as compensation after the effective date. The following table shows the status of each of our then-serving non-executive directors meeting the requirements of the 2022 policy as of December 31, 2022.

Non-executive director stock ownership¹

Shares held as of December 31, 2022

Name		Shares held2		Requirement met		Name		Shares held2		Requirement met
Beshar		69,532				Sheinwald		56,353
Finke3		18,623				Tolliver3		20,452
Glavin		35,469				Wagoner		77,255
Henrikson		81,264				Womack3		14,302
Kessler		92,870				Wood		64,496

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Corporate governance

Corporate governance guidelines

Our Board is committed to maintaining the highest standards of corporate governance and is guided by our Corporate Governance Guidelines (“Guidelines”) and Terms of Reference for our Chair and for our Chief Executive Officer, which provide a framework for the governance of our company and the responsibilities of our Board. Each of these documents is available in the corporate governance section of the Company Website. The Guidelines set forth the practices the Board follows with respect to, among other matters, the composition of the Board, director responsibilities, Board committees, director access to officers, employees and independent advisors, director compensation and performance evaluation of the Board.

Code of conduct and directors’ code of conduct

As part of our ethics and compliance program, our Board has approved a code of ethics (the “Code of Conduct”) that applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions, as well as to our other officers and employees. The Code of Conduct is posted on the Company Website. In addition, we have adopted a separate Directors’ Code of Conduct that applies to all members of the Board. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Conduct for our directors and executive officers by posting such information on the Company Website. The company maintains a compliance reporting line, where employees and individuals outside the company can anonymously submit a complaint or concern regarding compliance with applicable laws, rules or regulations, the Code of Conduct, as well as accounting, auditing, ethical or other concerns.

Board leadership structure

As described in the Guidelines, the company’s business is conducted day-to-day by its officers, managers and employees, under the direction of the Chief Executive Officer and the oversight of the Board, to serve the interest of our clients and enhance the long-term value of the company for its shareholders. The Board is elected by the shareholders to oversee our management team and to seek to assure that the long-term interests of the shareholders are being served. In light of these differences in the fundamental roles of the Board and management, the company has chosen to separate the Chief Executive Officer and Board Chair positions. The Board believes separation of these roles: (i) allows the Board to more effectively monitor and evaluate objectively the performance of the Chief Executive Officer, such that the Chief Executive Officer is more likely to be held accountable for his performance; (ii) allows the non-executive Chair to control the Board’s agenda and information flow; and (iii) creates an atmosphere in which other directors are more likely to challenge the Chief Executive Officer and other members of our senior management team. For these reasons, the company believes that this Board leadership structure is currently the most appropriate structure for the company. Nevertheless, the Board may reassess the appropriateness of the existing structure at any time, including following changes in Board composition, in management or in the character of the company’s business and operations.

Director recruitment

The nomination and corporate governance committee continues to focus on Board refreshment to align the Board’s composition with our long-term strategy and effect meaningful Board succession planning. New directors are identified using the following process:

		The committee reviews and updates its criteria for prospective directors based on succession planning for directors, to add experience in certain areas and to address new or evolving needs of the company. The committee then utilizes recommendations from directors and independent search firms to determine the candidates for consideration.

The nomination and corporate governance committee believes there are certain minimum qualifications that each director nominee must satisfy in order to be suitable for a position on the Board, including that such nominee:

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. The manner in which the committee evaluates candidates recommended by shareholders would be generally the same as any other candidate. However, the committee would also seek and consider information concerning any relationship between a shareholder recommending a candidate and the candidate to determine if the candidate can represent the interests of all of our shareholders. For further information regarding deadlines for shareholder proposals, see Important additional information — Shareholder proposals for the 2024 annual general meeting on page 85.

Director orientation and continuing education and development

When a new independent director joins the Board, we provide an orientation program for the purpose of providing the new director with an understanding of the strategy and operations of the company. To assist the directors in understanding the company and its industry and maintaining the level of expertise required for our directors, the company‘s management team makes presentations during Board meetings relating to the competitive and industry environment and the company’s goals and strategies. In addition, at most meetings the Board receives presentations on various topics related to key industry trends, topical business issues and governance.

Each director is encouraged to participate in continuing education programs for public company directors sponsored by nationally recognized educational organizations not affiliated with the company. We provide our directors with suggested educational courses on topics such as emerging governance issues, compliance and ethics matters and financial risk oversight. To facilitate the ongoing education of our directors, the cost of all such continuing education is paid for by the company.

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Board evaluation process

The effectiveness of the Board and its committees is critical to the company’s success and to the protection of our shareholders’ long-term interests. To maintain their effectiveness, the Board and each standing committee annually conduct comprehensive assessments to identify areas for improvements.

		The Board engages an independent external advisor to coordinate the Board’s self-assessment by its members. The advisor has each director review a questionnaire and then performs one-on-one confidential interviews with directors. In addition to the questionnaires and interviews of each director, interviews are also conducted with those members of executive management who attend Board meetings on a regular basis.     The advisor prepares and presents an in-person report to the Board, which discusses the findings of the advisor based upon its reviews.   The Board then discusses the evaluation to determine what action, if any, could further enhance the operations of the Board and its committees.

Shareholder engagement

Why we engage

One of our key priorities is ensuring robust outreach and engagement with our shareholders in order to:

How we engage

		Investor relations and senior management We provide institutional investors with many opportunities to provide feedback to senior management by participating in conferences, one-on-one and group meetings throughout the year. We also routinely interact and communicate with shareholders through quarterly earnings presentations, SEC filings (including our annual report on Form 10-K), the Proxy Statement and the annual meeting of shareholders.
		Shareholders As investment professionals, we understand the value of engaging with companies and seek to maintain an active and open dialogue with our shareholders. We integrate aspects of the feedback we receive from our shareholders and share this feedback with our directors as we seek to enhance our corporate governance and executive compensation practices.   In addition to our year-round shareholder engagement, for many years we have also conducted a targeted shareholder and proxy adviser outreach in the Fall of each year. In the Fall of 2022, we reached out to our top shareholders, representing 71%1 of our outstanding common stock. Five of our shareholders, representing 23%1 of our outstanding common stock, requested and held meetings with our investor relations, corporate governance, executive compensation and ESG teams. Our directors have also engaged directly with shareholders in prior years. See Shareholder and proxy advisory engagement and feedback for more information on this outreach and related findings.

Communications with the Chair and other non-executive directors

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

Invesco Ltd.

1331 Spring Street NW, Suite 2500

Atlanta, Georgia 30309

Attn: Office of the Company Secretary, Legal Department

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 maintains the Invesco Whistleblower Hotline for its employees or individuals outside the company to report complaints or 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. Further information about the Invesco Whistleblower Hotline is available at the Company Website.

Non-employees may submit any complaint regarding accounting, internal accounting controls or auditing matters directly to the audit committee of the Board of Directors by sending a written communication addressed to the audit committee at the address set forth above.

Board’s role in risk oversight

The Board has oversight responsibility for the company’s enterprise risk management program and processes. This includes oversight over the management of material risks with respect to the company’s business, including, without limitation, business strategy, governance, financial, investment, operational, technology (including cyber risk), regulatory compliance, human capital management, environmental and social risks. Though Board committees address specific risks and risk processes within their purview, the Board has not delegated risk oversight to a committee as full Board engagement supports appropriate consideration of risk in strategy setting and a more holistic understanding of risk across the enterprise.

Invesco is committed to continually strengthening and evolving our risk management activities to ensure they keep pace with business change and client expectations. We believe a key factor in our ability to manage through challenging market conditions and significant business change is our integrated and global approach to risk management. Risk management is embedded in our day-to-day decision-making as well as our strategic planning process while our global risk management framework enables consistent and meaningful risk dialogue up, down and across the company. Our framework leverages two governance structures: (i) our Global Performance and Risk Committee oversees the management of core investment risks and (ii) our Enterprise Risk Management Committee oversees the management of all other business and strategy related risks. A network of regional, business unit and specific risk management committees, with oversight of the Enterprise Risk Management Committee, provides ongoing identification, assessment, management and monitoring of risk that ensures both broad as well as in-depth, multi-layered coverage of the risks existing and emerging in the various domains of our business.

The Board reviews and discusses with executive and senior management risk management information and reporting provided, at least quarterly, by the Global Performance and Risk Committee and the Enterprise Risk Management Committee. The Board also reviews the company’s risk appetite and crisis management framework. By receiving these reports, the Board maintains a practical understanding of the company’s risk management processes, overall risk profile and risk culture. In addition, Board and committee agenda business-related topics include discussion of the risks in our ongoing business as well as those introduced by new business developments. Through this regular and consistent risk communication and dialogue, the Board seeks to maintain reasonable assurance that all material risks of the company are being addressed and that the company is fostering a risk-aware culture in which effective risk management is embedded in the business.

Oversight of financial reporting and compliance related risk: The audit committee routinely receives reports from the control functions of finance, legal, compliance and internal audit. The Chief Risk and Audit Officer reports to the Chair of the audit committee. The audit committee oversees the internal audit function’s planning and resource allocation in a manner designed to ensure testing of controls and other internal audit activities are appropriately prioritized in a risk-based manner. The audit committee also seeks to assure that appropriate risk-based inputs from management and internal audit are communicated to the company’s independent public auditors.

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Our risk management framework

Oversight of cyber security risk: The Board receives a report regarding cyber security, including risks and protections, typically twice a year and more frequently as needed. The Global Security Oversight Committee, one of the company’s risk management committees, provides executive level oversight and monitoring of the end-to-end programs dedicated to managing information security and cyber related risk. Important to these programs is our investment in threat-intelligence, our active engagement in industry and government security-related forums and our utilization of external experts to challenge our program maturity, assess our controls and routinely test our capabilities.

Cyber security

Cyber threats are considered one of the most significant risks facing financial institutions. To mitigate that risk, we have a designated Global Chief Security Officer and have a global security program that brings together the following groups within Invesco: Information Security, Global Privacy, Business Continuity & Crisis Management, Resilience, Corporate Security, Business Security Officers and Strategy, Projects & Governance in collaboration with Global Intelligence & Threat Analysis. This structure supports a more comprehensive, holistic approach to keeping Invesco clients, employees, and critical assets safe, upholding their privacy rights, while enabling a secure and resilient business. As noted above, the Global Security Oversight Committee provides executive level oversight and monitoring of the end-to-end programs dedicated to managing information security and cyber related risk. Our program is also audited by independent third-parties that produce service reports, such as ISAE 3402 and SSAE16.

Our information security program, led by our Chief Information Security Officer, is designed to oversee, and maintain all aspects of information security risk and seeks to ensure the confidentiality, integrity, and availability of information assets. This includes the implementation of controls aligned with industry guidelines and applicable statutes and regulations to identify threats, detect attacks and protect these information assets. We have an incident response program that includes periodic testing and is designed to restore business operations as quickly and as orderly as possible in the event of a breach or third-party incident. We conduct mandatory annual employee security awareness training, which focuses on cyber threats and security in general. We also conduct regular cyber phishing tests throughout the year to measure and raise employee awareness against cyber phishing threats.

Political engagement and oversight

As a global investment firm dedicated to creating greater possibilities for our clients, we believe it is important to be an active participant in the political process with the objective of promoting and protecting the economic future of the company, our clients and shareholders.

Invesco’s Government Affairs Department works to strengthen Invesco’s connectivity to key public policy conversations and enhance our reputation with leaders in the legislative and regulatory ecosystem. The nominating and corporate governance committee assists the Board in oversight of the company’s U.S. political activities by reviewing, at least annually, the company’s U.S. political activities, including political spending and lobbying activities and expenditures in the United States.

Invesco engages in lobbying deemed to be in the best interests of the company, its clients and shareholders, in compliance with laws and regulations that govern such activities. Invesco discloses the principal U.S. trade organizations utilized by Invesco’s Government Affairs Department to which Invesco belongs as well as those U.S. trade organizations that receive from Invesco total payments of $25,000 or more for membership fees and/or dues in a given year.

Invesco maintains a U.S. federal political action committee (PAC). The PAC is funded in accordance with applicable U.S. federal law on a voluntary basis by U.S.-based employees. As required by law, all political contributions by the PAC are reported to the U.S. Federal Election Commission (FEC) and are publicly disclosed on the FEC’s website.

In 2022, Invesco adopted a US Policy Statement on Political Activities. A link to the policy statement can be found on the Company Website under the Corporate Givernance tab and the header “Political Activities.”

Environmental, social and governance (“ESG”)

Invesco has an investment-led and client-centric ESG approach. To us, responsible stewardship means creating long-term value for our clients in line with our commitment to industry engagement, leadership and innovation.

Our ESG approach is investment-team led and client-focused. We integrate financially material considerations in our investment capabilities, taking into account critical factors that help us deliver strong outcomes to clients.

As investors in global equities, corporate and sovereign fixed income instruments, as well as real estate and multi-asset strategies, we recognize the differences between asset classes and geographies. We apply ESG principles in a variety of ways, depending on the asset class and strategy.

We exercise our rights and responsibilities as stewards of capital and use our expertise to cast voting decisions in our clients’ best interests.

Innovation and data

We believe having quality data on ESG factors is critical for effective investment analysis. We are enhancing our ESG data and analytics capabilities by building out and updating our proprietary tools, including ESGintel, PROXYintel, and ESGCentral. These tools assist with research, portfolio reviews, portfolio optimization, engagement, and proxy voting.

Client partnerships

Invesco has a client centric ESG approach focused on customizing solutions to client needs and objectives. We provide a comprehensive range of ESG-focused capabilities that enable clients to express their values through investing. Some of our clients ask us to impose ESG investment guidelines and restrictions on their portfolios. We therefore offer a suite of portfolio solutions to ESG-minded clients who wish to pursue ESG goals.

Industry engagement

We are involved in many industry bodies, including Principles for Responsible Investment (PRI), the Net Zero Asset Managers Initiative (NZAM), the Global Real Estate Sustainability Benchmark (GRESB), and the Task Force on Climate-related Financial Disclosures (TCFD). We engage policymakers on the latest ESG regulations and have academic partnerships with the University of Cambridge and Tshingua University.

Invesco’s corporate stewardship

At Invesco, corporate stewardship matters. Our efforts are motivated by the belief that doing what is right for the environment, our people and the communities in which we have a presence helps us deliver positive outcomes for our shareholders. Our senior leaders and employees are committed to the communities where we live, work and volunteer. We actively partner with non-profits, start-ups and other organizations to strengthen our communities. Our areas of focus are:

Through Invesco Cares and Environmental Green Teams, local Invesco offices identify areas of need that are unique to each specific community. Our Environmental Green Teams focus on preserving and improving the environment by focusing on reducing carbon emissions, eliminating plastic consumption, promoting waste awareness and recycling electronic computers and laptops. These groups also volunteer to clean up local community parks, plant trees and clean up marine areas. The Invesco culture encourages employees to go beyond their work responsibilities, and join with like-minded colleagues, to make an impact in communities we serve. Invesco Cares partners with local charitable organizations around the globe through volunteering, sharing our skills, and raising funds to improve the local communities where we work.

Invesco strives to align with the Global Reporting Initiative (GRI) standard reporting guidelines and Sustainability Accounting Standards Board (SASB) metrics for Asset Management & Custody Activities as further detailed in our Corporate Social Responsibility Report, which is available on the Company Website.

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Compensation committee interlocks and insider participation

During 2022, the following directors served as members of the compensation committee: C. Robert Henrikson (Chair), Sarah E. Beshar, Thomas M. Finke, Edward P. Garden1, William F. Glavin, Jr., Denis Kessler, Sir Nigel Sheinwald, Paula C. Tolliver, G. Richard Wagoner, Jr., Christopher C. Womack and Phoebe A. Wood. No member of the compensation committee was an officer or employee of the company or any of its subsidiaries during 2022, 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 person transaction involving the company. During 2022, none of the executive officers of the company 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.

1. Mr. Garden resigned from the Board and the compensation committee in February 2022.

Certain relationships and related transactions

Share repurchases

In order to pay withholding or other similar taxes due in connection with the vesting of equity awards granted under our equity incentive plans, our executive officers are required to “net shares” whereby the company purchases from the participant shares equal in value to an approximation of the tax withholding liability. Under the “net shares” method, the price per share paid by the company for repurchases is the closing price of the company’s common shares on the NYSE on the vesting date. During 2022, the company repurchased common shares from the executive officers for the aggregate consideration shown in the following table.

1. Ms. Butcher and Mr. Wong each became Senior Managing Director and Co-Head of Investments effective February 8, 2023.

2. Mr. Carome no longer served as Senior Managing Director and General Counsel after December 31, 2022.

3. Mr. Kupor became Senior Managing Director and General Counsel effective January 1, 2023.

4. Mr. McGreevey no longer served as Senior Managing Director and Head of Investments after February 7, 2023.

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Interests in or alongside certain Invesco-sponsored or managed investment products

Some of our employees, including our executive officers, (or persons or entities affiliated with them), are provided the opportunity to invest in or alongside certain Invesco-sponsored private funds and/or public non-traded products that we offer to our clients. Employees who make such investments usually do not pay management or performance fees charged to our clients. Messrs. Flanagan, Carome, McGreevey, Schlossberg and Ms. Dukes have made investments in or alongside such Invesco-sponsored private funds and/or certain public non-traded products. Other than Mr. Flanagan who received $189,701, there were no distributions exceeding $120,000 from such Invesco sponsored private funds and/or certain public non-traded products during the year ended December 31, 2022 made to our executive officers (or persons or entities affiliated with them) consisting of profits and other income.

In the ordinary course of our business, we may conduct transactions or make investments on behalf of funds or client accounts we manage in securities of and/or financial assets or products offered or managed by MassMutual. Likewise, in the ordinary course of business MassMutual may invest in investment products we manage. The amount of compensation or other value received (or in some cases not charged) by MassMutual or Invesco in connection with those transactions may exceed $120,000 individually or in the aggregate per year. Mr. Glavin is nominated pursuant to the MassMutual Shareholder Agreement and was employed by certain subsidiaries of MassMutual prior to his retirement in 2017.

MassMutual and its subsidiaries

As of February 17, 2023, MassMutual owned approximately 17.9% of our outstanding common shares. MassMutual owns substantially all of our issued and outstanding preference shares, the terms of which are set forth in the certificate of designation, a copy of which is filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on May 24, 2019.

MassMutual Shareholder Agreement

In connection with Invesco’s acquisition of OppenheimerFunds, an investment management subsidiary of MassMutual, Invesco entered into the MassMutual Shareholder Agreement, which governs the ongoing relationship between MassMutual and Invesco.

See below for a summary of key provisions of the MassMutual Shareholder Agreement. It does not purport to be complete and is qualified in its entirety by the full text of the MassMutual Shareholder Agreement, a copy of which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 24, 2019.

Share ownership: Subject to certain exceptions, MassMutual and its controlled affiliates are prohibited from acquiring any additional Invesco capital stock such that if after giving effect to such acquisition, MassMutual together with its controlled affiliates would beneficially own more than 22.5% of the total voting power of Invesco capital stock (which we refer to as the “ownership cap”).

MassMutual is subject to the ownership cap until the date (which we refer to as the “governance termination date”) on which MassMutual and its controlled affiliates cease to beneficially own at least (i) 10% of the issued and outstanding Invesco common shares or (ii) 5% of the issued and outstanding Invesco common shares and $2.0 billion in aggregate liquidation preference of Invesco Series A preferred shares.

Prohibited actions: Until the governance termination date, MassMutual and its controlled affiliates are generally prohibited from soliciting, knowingly encouraging, acting in concert or assisting third parties, negotiating or making any public announcement with respect to:

Additional purchase of voting securities: Until the governance termination date, except in certain cases, if at any time Invesco issues voting securities (or securities convertible into voting securities), MassMutual will have the right to purchase directly from Invesco additional securities of the same class or series being issued up to an amount that would result in MassMutual and its controlled affiliates beneficially owning the lesser of (i) the ownership cap and (ii) the same ownership percentage as they owned immediately prior to such stock issuance.

Share repurchases: If Invesco engages in any share repurchase program or self tender that (i) will, or would reasonably be expected to, cause Invesco capital stock beneficially owned by MassMutual and its controlled affiliates to exceed 24.5% or (ii) would otherwise reasonably be likely to result in a deemed “assignment” of any investment advisory agreement of Invesco or its affiliates under the Investment Advisers Act or Investment Company Act, then Invesco may require, subject to certain exceptions, MassMutual and its controlled affiliates to promptly sell or self-tender such number of shares of Invesco capital stock to Invesco as would be necessary to prevent the occurrence of either of the foregoing events.

Transfer restrictions: In the case of Invesco Series A preferred shares, until the earliest to occur of May 24, 2024, certain credit rating downgrades of Invesco Series A preferred shares or the consummation of a change of control transaction of Invesco (which date we refer to as the “transfer restriction termination date”), MassMutual and its controlled affiliates are generally prohibited from transferring or agreeing to transfer, directly or indirectly, any such preferred stock beneficially owned by them to anyone other than to a controlled affiliate of MassMutual which agrees in writing with Invesco to be bound by the MassMutual Shareholder Agreement or to Invesco directly. In the case of Invesco common shares, until the governance termination date, MassMutual is permitted to transfer its Invesco common shares in certain specified categories of transactions.

Right of first offer: If MassMutual and/or any of its controlled affiliates intend to transfer any Series A preferred shares to a non-affiliate, MassMutual must provide written notice to Invesco. Upon receipt of such notice, Invesco will have the right to purchase all, but not less than all, of the shares proposed to be transferred, at the price and terms described in the notice.

Registration rights: MassMutual has certain customary shelf, demand and “piggyback” registration rights with respect to the Invesco common shares and the Invesco Series A preferred shares.

Board designation: The MassMutual Shareholder Agreement requires Invesco to elect an individual designated by MassMutual to the Invesco Board (whom we refer to as the “MassMutual designee”). The current MassMutual designee serving on the Invesco Board is William F. Glavin Jr. Until the governance termination date, Invesco is required to use reasonable best efforts to cause the election of the MassMutual designee at each meeting of Invesco shareholders. Except in connection with succession planning, until the governance termination date, the size of the Invesco Board of Directors cannot exceed 12 members without the prior approval of the MassMutual designee. The MassMutual designee is entitled to be a member of each standing committee of the Invesco Board or, if not permitted by applicable law, to be an observer on such committee.

Approval rights of MassMutual: Until the governance termination date, Invesco may not generally enter into or effect the following transactions without the prior written approval of MassMutual:

Voting agreements: Until the governance termination date, MassMutual and its controlled affiliates are generally required to vote (i) in favor of each matter required to effectuate any provision of the MassMutual Shareholder Agreement and against any matter the approval of which would be inconsistent with any provision of the MassMutual Shareholder Agreement, and (ii) to the extent consistent with the preceding clause (i), in accordance with the recommendation of the Invesco Board on all matters approved by the Invesco Board relating to (a) the elections of

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directors, (b) matters that have been approved or recommended by the compensation committee of the Invesco Board, (c) any change of control transaction of Invesco that the Invesco Board has unanimously recommended in favor of or against, and (d) any transaction that arises out of a breach by MassMutual of its obligations under the MassMutual Shareholder Agreement to not engage in certain prohibited actions. Additionally, if MassMutual and its controlled affiliates beneficially own at least 20% of the issued and outstanding Invesco common shares as of the record date for a vote on any matter, they must, subject to some exceptions, vote on such matter as recommended by the Invesco Board to the extent that such matter does not conflict with any provision of the MassMutual Shareholder Agreement.

Termination of the MassMutual Shareholder Agreement: The MassMutual Shareholder Agreement will terminate upon the later to occur of the governance termination date and the transfer restriction termination date, although certain provisions of the MassMutual Shareholder Agreement may survive for a certain period of time beyond the termination of the MassMutual Shareholder Agreement.

Delinquent Section 16(a) Reports

Sections 16(a) of the Exchange Act requires certain officers, directors and persons who beneficially own more than 10% of the company’s common shares to file reports of ownership and reports of changes in ownership 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, the company believes that all Section 16(a) filing requirements applicable to its directors, reporting officers and 10% shareholders were complied with during 2022 with the exception of one late Form 4 filing on behalf of Andrew R. Schlossberg for common shares of the company received through equity grants from the company on August 31, 2022. These grants were initially underreported due to an administrative error in calculating tax withholding in a Form 4 filing on September 2, 2022 and subsequently corrected in an amendment to that Form 4 on September 9, 2022.

Security ownership of principal shareholders

The following table sets forth the common shares beneficially owned as of February 17, 2023 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 454,724,138 common shares outstanding as of February 17, 2023.

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Security ownership of management

The following table lists the common shares beneficially owned as of February 17, 2023 by (i) each director and director nominee; (ii) each executive officer named in the Summary Compensation Table below and (iii) all director nominees and executive officers as a group. The percentage of ownership indicated below is based on 454,724,138 of the company’s common shares outstanding on February 17, 2023.

Beneficial ownership reported in the below table has been determined according to SEC regulations and includes common shares that may be acquired within 60 days after February 17, 2023, but excludes deferred shares which are disclosed in a separate column. Unless otherwise indicated, all directors and executive officers have sole voting and investment power with respect to the shares shown. No shares are pledged as security. As of February 17, 2023, no individual director or named executive officer owned beneficially 1% or more of our common shares other than Mr. Flanagan, who owns approximately 1.2% of our outstanding common shares. Our directors and executive officers as a group owned approximately 2.0% of our outstanding common shares.