Amvescap, the fund management group, suffered the embarrassment of one of UK corporate history's largest shareholder rebellions yesterday over remuneration packages granted to the departing chairman Charles Brady and the incoming chief executive Martin Flanagan.
On a vote by the shareholders, 48.4 per cent voted against approving the remuneration report, which gave Mr Brady a $9m (£5m) bonus on his retirement and Mr Flanagan $11.6m to compensate him for the loss of stock options when he left his previous employers, the rival US fund management group Franklin Resources.
According to Amvescap, the pay awards given to Mr Brady and Mr Flanagan are in line with remuneration at US peers. Nearly 12 million votes were withheld, more than double the next highest amount for issues on which votes were cast.
Amvescap executives knew that they would have a fight on their hands to pass the AGM remuneration resolutions, even though the AGM itself was relatively incident-free.
RREV, a division of the National Association of Pension fund Managers which advises on corporate governance and voting issues, advised its clients to oppose the package awarded to Mr Brady on the grounds that it was "inadequately justified".
Pensions & Investment Research Consultants, another major pension advisory group, echoed that advice in the build-up to the vote, urging its clients to reject the remuneration proposals on the basis that executives should not be additionally rewarded for fulfilling their job description.
Amvescap, the Atlanta-based, London-listed company, which trades in the UK under the Invesco Perpetual fund management brand, reported first half results on Wednesday that were well ahead of market forecasts. Analysts had been expecting the company to report pre-tax profits of $120m, but the results came in at $170.7m.
A source close to the shareholder advisory firms said: "It was always going to be tough opposing these remuneration packages the day after the company has reported results like that."
Executive remuneration has come increasingly under the spotlight in recent years, with major shareholder revolts over executive pay at UBM, Sainsbury, GlaxoSmithKline and Burberry within the past three years.Reuse content