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Shell in the firing line over boss pay

Jillian Ambrose

Shell boss Ben Van Beurden is under fire over his multi-million euro salary ahead of the oil giant’s annual general meeting this week.

The chief executive’s pay ballooned by €3m since 2015 to €8.6m (£7.4m) for last year, driven by a €4m boom in long-term incentives which proxy advisors have branded “excessive”.

Major shareholder advisory groups have rounded on the board, saying long-term payouts, or LTIPs, are disproportionate to those of its peers.

The Investment Association has issued an “amber top” warning – meaning it is a significant issued to be considered – against the pay plans and has advised shareholders to closely examine the proposals. They set Mr Van Beurden’s LTIP payouts at almost double the maximum rate of rival BP.

BP took an axe to executive pay to head off an uprising at its annual general meeting last week after an embarrassing revolt against the pay of Bob Dudley, chief executive, in 2016. The new policy caps maximum bonus payouts at 2.25 times the base salary and limits the payout over three years to five times base pay.

Meanwhile Shell’s long-term incentives could balloon to eight times Mr Van Beurden’s €1.46m salary while its bonus pay is capped at 2.5 times salary.

In theory Mr Van Beurden’s total pay – including maximum bonus wins –could reach €16.88m, or $18.8m, while BP’s board has capped Mr Dudley’s highest possible payout at $15.7m.

Pensions & Investment Research Consultants (Pirc) was first to hit out at the pay plan and has urged shareholders to rebel against the remuneration in a shareholder vote on Tuesday. ISS did not call on investors to vote against the board but said the pay policy is “not without concerns for shareholders”.

“An issue consistently highlighted in past ISS reports on Shell has been the high level of vesting at threshold performance levels of the LTIP. The size of potential awards exacerbates the concern,” the advisory warned.

Shell’s board was spared an investor revolt last year after shareholders voted 85.83pc in favour of the payout.

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