2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 304 41 Our multi-year strategic objectives and annual operating plan Our purpose is to deliver an investment experience that helps people get more out of life. Our strategic objectives and our purpose guide our planning process, which sharply focuses our organization on delivering better outcomes for clients while achieving strong results for shareholders over the long term. Management, with guidance and input from the Board of Directors, annually reviews our multi-year strategic objectives in the context of global trends and macro themes impacting the asset management industry, our position in key markets and the financial implications of our decisions. The outcome of the review is the establishment of an annual operating plan comprising, in part, our business priorities and related projected financial outcomes. Throughout the year, the Board of Directors reviews with management the firm’s performance against the annual operating plan. Multi-year strategic objectives Annual operating plan Board and management reviews performance Our Board and management review performance against our strategic objectives and annual operating plan based on a number of factors, including those set forth below. Achievements in respect to these measures drive strong outcomes for our clients and shareholders. Global trends and macro themes – Global and regional macro-economic factors and market drivers including: – Monetary and fiscal policy landscape – Gross domestic product trends – Competitive landscape – Market opportunities – Client needs assessment Investment performance and flows – Assessment of investment returns versus expectations – Quality and breadth of our investment capabilities – On a 3- and 5-year basis, % of AUM in top half versus peers – On a 3- and 5-year basis, % of AUM versus benchmark – Net long-term flows as a % of AUM – Average AUM – On a 3-year basis, % of AUM in top quartile Organizational health – Thoroughness of talent management and development – Succession planning – Employee engagement scores – Retention of investment professionals – Retention of key performers in all areas – Leadership and management practices Efficiency and effectiveness – Net revenue yield – Adjusted operating expense as % of average AUM – Adjusted operating income as % of average AUM – Adjusted operating margin Operating results and financial strength 1 – Adjusted operating income – Adjusted earnings per share – Leverage ratio (adjusted debt/EBITDA) – Credit ratings (Moody’s, S&P and Fitch) – Available cash Shareholder returns – Dividend growth – Stock repurchases – Cumulative capital returned to shareholders – Total shareholder return versus total returns of S&P 500 and our peer group 1 See Compensation Philosophy, Design and Process - Our performance measures and the impact of GAAP for rationale to not focus on ROA and ROE. PROXY-BRO-1 03-18.indd 41 3/20/18 4:13 PM Total of 04 pages in section INVESCO LTD