Amvescap investors in revolt

Amvescap, the giant investment manager which is recovering from a US funds scandal, is facing a shareholder revolt over payments to its outgoing chairman.

Many of the group's leading shareholders are expected to vote against the company's remuneration report at Thursday's AGM. They are angry at a $9m (£5m) bonus given to Charles Brady, who retires as executive chairman at the meeting.

The award was given at the discretion of the group's remuneration committee, reflecting "the very effective work that the chairman had successfully concluded in the year".

In the period, Amvescap fought off a bid from Canadian rival CI Fund Management and was rebuilding its reputation after being fined $377m in 2004 over a fund pricing scandal.

The payment has been criticised by corporate governance advisory groups Pirc, Manifest, and Rrev, which is linked to the National Association of Pension Funds. And it has raised the shackles of leading shareholders. At least four of the top six independent investors in Amvescap are likely to vote against the payment.

In a statement, Scottish Widows Investment Partnership, which owns 4.3 per cent of the company, said: "The discretionary bonus payment of $9m to Charles Brady... overshadows the fact that Amvescap has come a long way in terms of corporate governance. Special payments... always invite close scrutiny by major investors such as SWIP."

Another shareholder, which did not wish to be identified, said: "We would not normally support this sort of payment."

Some shareholders are also unhappy about a $11.75m payment to the new chief executive, Martin Flanagan. These are to compensate him for potential profits on benefits held at his previous employer, Franklin Resources.

Amvescap, which owns the Invesco fund management group in the UK, is headquartered in Atlanta, Georgia, but retains a primary listing in the UK for tax and historical reasons. It argues its payments are in line with what is normal in the fund management industry, particularly in the US. However, one investor rejected this. "If they want US policies, they should move their primary listing to the US. If they are listed in London, they should abide by our rules."