April 28, 2006 3:00 am

Amvescap scrapes home on Brady pay

Amvescap, the Anglo-American fund manager, narrowly escaped humiliation at its annual meeting when 48 per cent of votes were cast against its controversial remuneration report.

Just over 51 per cent of shareholders voted in favour of the report, despite widespread opposition to the $9m (£5m) bonus awarded to Charles Brady, the outgoing chairman.

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Voting agencies and investor groups had advised shareholders to reject the remuneration report as a protest against the bonus on the basis that Mr Brady was being paid extra for fulfilling his job. Amvescap said the bonus was for leading the group through "a difficult period", fending off a bid and finding a successor. But the Association of British Insurers criticised the bonus as inappropriate and not linked to performance.

This week Amvescap reported its first quarter of net inflows to the group in four years. This followed successive years of fund outflows as a result of poor investment performance and an investigation into irregular trading practices, after which it paid $413.2m to USregulators. Last year outflows reached $12bn.

Peter Montagnon, the ABI's director of investment affairs, said yesterday that the sizeable vote against the report was "the markets' verdict on Mr Brady's recent performance".

"We hope the company will take note of the very substantial opposition to the remuneration policy. Forty-eight per cent is very high. It is something that all companies should take note of," he said.

Alan MacDougall, managing director of Pirc, the pensions investment research consultancy, said: "Amvescap should now seek repayment to placate shareholders."

He likened the vote to the 76 per cent of votes cast against a bonus awarded last year to Lord Hollick, outgoing chief executive of United Business Media, for ensuring a successful handover. Following the annual meeting, Lord Hollick waived his bonus.

Scottish Widows Investment Partnership, which publicly opposed Mr Brady's pay, said yesterday: "Our discomfort with the remuneration report related solely to the bonus payment to Mr Brady."

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