“The oil titan is set to encounter protests over a controversial £4.8m severance deal for its former gas and power chief Linda Cook, a leading institutional shareholder told the Mail.”
By Sam Fleming
Last updated at 11:24 PM on 13th April 2010
Royal Dutch Shell faces another turbulent annual general meeting next month after failing to assuage all of its investors’ concerns about director pay.
The oil titan is set to encounter protests over a controversial £4.8m severance deal for its former gas and power chief Linda Cook, a leading institutional shareholder told the Mail.
Discontent is also simmering after chief financial officer Simon Henry moved to a Dutch employment contract, which will ensure more generous rights. And a hearty compensation package handed to former chief executive Jeroen van der Veer remains a bone of contention.
Shell suffered the humiliation of having its pay report voted down last year after discontent over the generosity of its awards emerged. Remuneration committee chief Sir Peter Job subsequently resigned.
Shell has since embarked on an intensive charm offensive as it sought to heal the rift. A long-term shareholder told the Mail: ‘There is unlikely to be a revolt on the scale of last year’s AGM, but there are still concerns about remuneration.’
The glittering deal given to Cook after she lost out in the battle to succeed Van der Veer has attracted particular attention, the shareholder said.
In addition to a £914,000 salary for 2009 and a £977,000 bonus, Cook was given a £4.8m severance payment and walked away with a pension worth £16.2m.
Shell defended Cook’s severance deal, however, saying it was calculated on a ‘standard formula’ in accordance with laws in the Netherlands, which is where the company is headquartered. Simon Henry’s contract will be covered by Dutch law following his ascent to the main board.
A spokesman said: ‘ Following 2009, we have had extensive consultation with major shareholders. Base salaries have been frozen since July 2008, except on promotion. As a result, chief executive officer and chief financial officer salaries are 20pc lower than (those of) the previous CEO and CFO.’
However, Shell is also likely to be hit by shareholder protests over its controversial oil sands exploration.
Shareholders including Cooperative Asset Management are planning to vote in favour of a resolution calling for greater transparency over its activities in the area.
Canadian oil sands are a tarlike substance that are mined at huge environmental cost. Shell’s arch-rival BP is also braced for protests over its oil sands ambitions and executive remuneration.
Shell’s ‘A’ shares slipped 7p to 1,966.5p, while BP lost 0.4p to 640.7p.
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