Posts under ‘Jeroen van der Veer’

Daily Telegraph: Royal Dutch Shell has unveiled the most dramatic overhaul of its business in recent memory, outlining plans to exit more than a third of its 90 retail markets, slash refining capacity and return to growth after seven years of falling output.

By Garry White
Published: 10:10PM GMT 16 Mar 2010

Peter Voser, chief executive, unveiled a further 1,000 jobs cuts in addition to the 6,000 already announced as he vowed to “sharpen up” Shell in the next three years by boosting output by 11pc.

“Shell has been disadvantaged recently, due to our higher exposure to refining and natural gas, where margins are hard-wired to the economy,” Mr Voser said.

“The priorities are for a more competitive performance, for growth, and for sharper delivery of strategy. We have more to do to drive out cost and improve the operating performance in the company.”

Shell plans to exit 35pc of its petrol station markets and reduce refining capacity by 15pc to help it make cost saving of $1bn (£658m) this year. It also said it would sell non-core assets worth $1bn-$3bn a year, including its refineries in Gothenburg, Los Angeles and New Zealand.

Monday is the deadline for bids for the company’s liquified petroleum gas distribution arm, which could raise £1.1bn. Those understood to be tabling offers include Brazilian chemicals group Ultrapar, Centrica spin-off DCC and French listed Rubis, as well as a number of private equity groups.

“Upstream, we have built up strong foundations in activities like gas-to-liquids, oil sands and liquefied natural gas,” Mr Voser said. “Looking out to 2020, I expect Shell’s exploration to underpin new upstream growth, especially in North America and Australia, with additional barrels from development-led projects.”

The news came on the day that Shell released its annual report, which showed that Mr Voser earned less than Tony Hayward, chief executive of rival BP, in 2009. Mr Voser earned a total salary and bonus of £2.8m compared with Mr Hayward’s £4m.

Shell has said it would freeze management salaries until 2011 after shareholders objected last year when executives were awarded bonuses even after performance targets were missed.

Linda Cook, who resigned as head of Shell’s gas and power business in May last year, was paid a salary and bonus of £2.1m as well as a severance payment of almost €5.5m (£5m). She leaves with a total pension pot of just under $25m. Mr Voser’s predecessor, Jeroen van der Veer, left with a pension pot worth $34.2m.

Shell predicts oil will trade between $50 and $90 a barrel over the next few years and is targeting output of 3.5m barrels of oil equivalent per day in 2012. This compares to 3.15m in 2009, the equivalent to an annual growth rate of 3.5pc, or 11pc in total over three years

Mr Voser said the company should be in a surplus cash flow position in 2012, after capital investment and dividend payments – assuming $60 oil prices and a more normal environment for natural gas prices and downstream. In order to achieve this it will have to invest between $25bn and $27 a year in its operations.

The Anglo Dutch group also said that it replaced 288pc of its oil and gas output with new discoveries in 2009, or 3.42bn barrels of oil equivalent.

SOURCE ARTICLE

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THE WALL STREET JOURNAL

MARCH 16, 2010, 6:47 A.M. ET By Lananh Nguyen and Jeffrey Sparshott Of Dow Jones Newswires

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB) said Tuesday it made a $7.6 million severance payment to the former head of its gas and power division last year, making her the highest-earning executive at the Anglo-Dutch oil major in 2009.

Van der Veer was the second-highest paid executive last year, with total earnings at $4.88 million.

-By Lananh Nguyen and Jeffrey Sparshott, Dow Jones Newswires; +44 (0)20-7842-9479; lananh.nguyen@dowjones.com

(James Herron contributed to this report.)

WSJ ARTICLE

Tar sands are shaping up to be the thorn in BP (BP-) and Shell’s (RDSB) sides as concerns over potential expense prove almost as rife as worries over the environmental impact.

The company has agreed terms for a ten-year lease with Canary Wharf on 200,000 sq ft of Docklands offices

February 24, 2010

A view of the London Eye, located along the Thames River at County Hall, is seen across from the Shell Oil Centre building.

Carl Mortished, World Business Editor

Staff at Royal Dutch Shell will be moved next year from the Shell Centre at Waterloo to Canary Wharf as part of a huge redevelopment of the oil company’s historic London headquarters.

The company has agreed terms for a ten-year lease with Canary Wharf on 200,000 sq ft of Docklands offices at 40 Bank Street, a building close to the tower at One Canada Square.

About 2,000 employees are expected to make the move eastwards as Shell embarks on a huge property investment in Central London with the construction of new office buildings, a project that is expected to last a decade.

The search for alternative accommodation, conducted in secrecy by CB Richard Ellis, was given the code-name Project Thunderbird.

The decision to decant staff to Docklands marks the end of almost ten years of deliberation, false starts and setbacks by Shell as it tried to get a grip on its 50-year endowment of almost seven acres of valuable London real estate, including a 24-storey office tower on the Thames opposite the Palace of Westminster.

A spokeswoman for Shell confirmed yesterday that it was negotiating a deal on 200,000 sq ft at Bank Street. She said that the decade-long move by staff to Canary Wharf was “temporary” while the company redeveloped the low-rise buildings adjacent to the tower.

“Shell has no permanent plans to leave the tower building on the South Bank and will remain a major employer in the area with established connections to the local community,” the spokeswoman said.

Shell’s move to Docklands coincides with another round of cost-cutting by Peter Voser, the new chief executive. He has made his mark as a relentless pruner and trimmer of overheads since taking over from Jeroen van der Veer last year.

The recession took its toll on Shell’s profits in the fourth quarter of 2009 and Mr Voser’s response was to announce a drive for a further $1 billion (£650 million) in savings.

Periodic bouts of internal costcutting and the removal of layers of imperial bureaucracy led to the gradual attrition of Shell’s head office staff during the 1990s.

Shell Centre, next to the then neglected South Bank arts complex, became a windswept wasteland, the public spaces populated by skateboarders and the homeless. The staff bloodletting opened up opportunities for the company to exploit its huge land bank in the centre of London.

It first sold off the White House, one of the downstream low-rise buildings, to residential property developers. Then it drew up plans to convert the ground floor and subterranean levels of the Shell Centre Tower into a leisure and retail complex. The oil company joined forces with Lend Lease, the Australian developer, to bring the project, a 600,000 sq ft design by Arup, to fruition.

However, Shell’s real estate dreams fell foul of local politics in a London borough that had earned a reputation as a property developer’s graveyard.

Lambeth Council scuppered the project, complaining that it was too big and that Shell’s vast retail ambitions would have a negative effect on Lower Marsh Street, a small shopping alley behind Waterloo station.

Shell has yet to choose a new partner for its revived real estate dream and some in the property industry speculate that it might be tempted to sell the site if values recover strongly during the decade-long hiatus of development.

Shell Centre opened in 1963 after six years of construction and contained all the accoutrements of a more paternalistic era.

To accommodate the needs of 5,000 staff, the floors beneath the tower contained a travel agency, a bank, a hairdresser, restaurants and bars, a giant sports hall and gymnasium, a cinema and a near-Olympic size swimming pool.

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TIMES SOURCE ARTICLE

News articles generated by royaldutchshellplc.com and its Shell insider sources in 2009

Daily Telegraph

Royal Dutch Shell has frozen the pay of its top executive directors and imposed new rules on bonuses, as it tries to appease investor anger over excessive remuneration.

By Rowena Mason, City Reporter (Energy)
Published: 9:11AM GMT 16 Feb 2010

Last year, Shell’s board suffered an embarrassing shareholder revolt over their pay packages, which awarded bonuses to executives who had failed to hit their targets.

Since then, the company has been consulting with major shareholders about more appropriate remuneration policies.

In a letter to investors , Hans Wijers, chairman of the remuneration committee, said the move would “better align remuneration policy with shareholder interests and long-term strategy”.

Peter Voser, who took over as chief executive of Shell last year, has already accepted a pay package 20pc below that of his predecessor, in line with other new employees.

He, along with Simon Henry, finance director, and Malcolm Brinded, director of upstream, will not be eligible for a rise until at least January 2011.

A greater proportion of bonus payments will now be in shares, to be vested over a longer period of time, which will tie the money made by directors to performance.

Mr Voser will also have a personal say in how successful his executive directors have been at hitting targets each year. The remuneration committee has also agreed not to award bonuses where directors fail to meet their targets.

It is understood major shareholders are happy with the concessions, which will be presented at the group’s annual meeting in May.

The shareholder revolt last year was one of the largest in UK corporate history, with 59.42pc of shareholders voting against Shell’s pay deal during at fiery meeting at the Hague.

Peter Job, the former chairman of Royal Dutch Shell’s remuneration committee, stepped down in September, five months after the rebellion. He angered investors by recommending that directors take up half their share awards even though Shell missed its target of finishing third in terms of performance against a peer group of five rivals.

Jeroen van der Veer, Shell’s former chief executive, received a package worth £9.1m, up 58pc on 2007.

At the time, several investors spoke out. Errol Keyner, from Dutch shareholder association VEB, called the system “sick and in need of fixing”. Guy Jubb, of Standard Life, told the board he was “dismayed” over Mr van der Veer remuneration package.

The rebellion was seen as an indication of increasing activism among institutional shareholders and a sign that anger at bonuses paid to management in the banks had spilled over into other sectors.

TELEGRAPH ARTICLE

• Shell responds to last May’s shareholder revolt over pay

• Salaries frozen until 2011, with pledge on bonuses and targets

Zoe Wood
Tuesday 16 February 2010 10.36 GMT

Shell has frozen salaries after a row with shareholders. Photograph: Leon Neal/AFP/Getty Images

Royal Dutch Shell has today bowed to pressure from major investors by announcing a major overhaul of executive pay. It will freeze the salaries of top directors and set new limits on bonuses.

The oil group has been in talks with major shareholders since the embarrassing revolt at last May’s annual meeting when 60% voted against a pay deal that included discretionary bonuses for top directors who had failed to hit targets.

The chief executive, Peter Voser, and finance director Simon Henry will have their salaries frozen until January 2011. Their pay is already 20% less than their predecessors’. The company said the move demonstrated “appropriate restraint in the current economic environment”.

In a letter to shareholders setting out the changes, Hans Wijers, chairman of the remuneration committee, said the freeze aimed to “better align remuneration policy with shareholder interests and long-term strategy”.

Shell said it had conducted a “wholesale review” of pay since the May showdown and had drafted the proposals with the help of external consultants.

Wijers, who took over the post in September, said that while investors had accepted the “basic” structures were correct they had demanded change elsewhere.

Base salaries are frozen and new appointment salaries will be lower. In the letter Wijers promised there would be no review of salary, bonus, and share levels until 1 January 2011.

Accountability

The company also said directors would no longer be allowed to award management bonuses if they missed targets.

Furthermore, it is introducing a new “individual performance” element to payments. With the goal of increasing personal accountability for short-term results among senior managers they will be scored by Voser, affecting the payout.

The company will also demand executives own more shares, and keep them for longer, to better entwine their fortunes with the company. The previous shareholding guideline for the chief executive was two times salary but that will now rise to three.

“I believe that holding shares probably aligns executive interests with those of shareholders better than any long-term incentive plan,” said Wijers.

Shell has also ruled that executives must hold long-term incentive plan shares for two years after qualifying for them.

Wijers conceded that shareholders still had reservations, particularly over targets within the long-term incentive plan, but added: “In the absence of perfect metrics we will have to work with these new measures and adapt as necessary … However, I do believe these proposals will provide an improvement and sit within more broadly balanced structures.”

In the letter Wijers promised more transparency around executive pay in general, with the 2009 annual report to spell out remuneration of current as well as former directors. This would include the head of its gas business, Linda Cook, who quit with a controversial golden goodbye, and former chief executive Jeroen van der Veer, who also left last year.

SOURCE ARTICLE

The Times
February 17, 2010

Robin Pagnamenta and Robert Lindsay

Royal Dutch Shell said that it would freeze the salaries of its top directors and reform a generous bonus scheme as the oil giant moved to soothe shareholders’ anger over excessive boardroom pay before its annual meeting.

In a letter to investors, Hans Wijers, the new chairman of the Anglo-Dutch company’s remuneration committee, said that the changes were being made after extensive talks with shareholders, 60 per cent of whom voted down the executive pay plans at a stormy annual meeting last year.

The shareholder revolt triggered the resignation of Sir Peter Job, Mr Wijers’s predecessor.

In the letter, Mr Wijers said that Shell would be capping the salaries of its top three executives — Peter Voser, chief executive, Simon Henry, finance director, and Malcolm Brinded, head of exploration — until 2011. He said that Mr Voser had been appointed last July on a salary 20 per cent lower than that of his predecessor, Jeroen van der Veer, who earned $2 million (£1.3 million) in basic pay in 2008 but $15 million in total compensation. Mr Wijers said that Mr Voser and Mr Henry had received pay rises last year but only because they had been promoted to new roles

He also announced plans to scrap a heavily criticised bonus scheme that last year allowed top directors to collect multimillion-pound payouts, even though they failed to meet performance targets.

“I believe it is appropriate in the current economic environment to state up front that no upward discretion will be applied to the Long Term Incentive Plan or Deferred Bonus Plan vesting in 2010. In future, there will be no use of upward discretion in the vesting of these plans without prior shareholder engagement,” Mr Wijers said.

Meanwhile, in an unprecedented move for a global oil group, Mr Wijers unveiled plans to link bonus payouts to Shell’s performance on the Dow Jones Sustainability Index, which ranks corporate performance using a variety of social and environmental indicators, including cuts to carbon emissions.

From 2010, 10 per cent of the targets used to calculate payouts will be linked to the index, with the remaining 90 per cent related to operational and financial performance as well as the delivery of big projects on time and on budget. The key measure in Shell’s bonus plan remains the group’s performance against its peers — BP, Total, ExxonMobil and Chevron.

In another concession to investors, Mr Wijers said that in future Shell’s chief executive would be obliged to have shares in the company equivalent to three times his basic salary, in order “to provide greater alignment with shareholder interests”. The existing guidelines for executive directors are for a holding of two times salary.

Shell’s 2010 annual meeting will be held on May 18.

TIMES ARTICLE

REUTERS

LONDON (Reuters) – Royal Dutch Shell Plc (RDSa.L) said it was overhauling its pay practices for top management, including a pay freeze for its chief executive, Peter Voser, and a limit on bonuses, after a shareholder revolt last year.

The head of Shell’s remuneration committee said salaries for Voser and Chief Financial Officer Simon Henry, which are 20 percent lower than their predecessors’, were being frozen until 2011.

Directors will not, this year, be allowed to award management bonuses if they fail to meet pre-agreed targets.

Top management received bonuses for 2008, despite not hitting targets, prompting 60 percent of Shell investors who voted, to oppose the 2008 remuneration report.

Hans Wijers, Chairman of Shell’s Remuneration Committee told investors in a letter, a copy of which was published on Shell’s web site on Tuesday, that he wanted to “demonstrate appropriate restraint in the current economic environment”.

Investors in European corporates, who traditionally vote overwhelmingly in favor of managements’ plans, registered their dissatisfaction with companies’ handling of and contribution to the global economic crisis in unprecedented numbers in 2009.

One third of voters at mining group Xstrata’s (XTA.L) annual general meeting opposed its pay policy, and more than a third of investors opposed oil major BP’s (BP.L) executive pay.

A majority of investors in troubled bank Royal Bank of Scotland (RBS.L), housebuilder Bellway (BWY.L) and Provident Financial (PFG.L) opposed pay plans in 2009 and last week, residential landlord Grainger (GRI.L) lost a shareholder vote on executive pay.

STRUCTURE REMAINS THE SAME

Hague-based Shell’s bonus structure remains largely intact and of the same magnitude.

Nonetheless, in addition to the restrictions on directors issuing discretionary bonuses, Europe’s second-largest oil company by market capitalization has introduced measures which it says will help align management and investors’ interests.

Under the new rules, management will be forced to hold shares awarded under Shell’s long term incentive plan for two years after they are awarded.

Annual bonuses will be tied to project delivery, with delay or budget overshoots being punished.

Also, as the bonuses are based on percentages of base salaries, the pay freeze, effective July 2009 to January 2011, will restrain the total amount of the bonuses somewhat.

Shell said it had also introduced a right to claw-back incentives paid within the previous 12 months, in the case of any material misstatements.

In 2004, Shell’s shares dived after it admitted overstating its reserves.

The key metric in the bonus plan remains Shell’s performance against other supermajors — U.S. rivals Exxon Mobil (XOM.N) and Chevron (CVX.N) and London-based BP and France’s Total (TOTF.PA).

In future, Shell’s CEO will have to have a shareholding in the company equal to three times his salary, to provide “greater alignment with shareholders’ interests”.

The current shareholding guideline for executive directors, including the CEO and CFO, is two times salary, Shell said.

Jeroen van der Veer, who retired as Chief Executive in June 2009, received total compensation of $15 million for 2008, according to Shell’s annual report.

Voser, who was Chief Financial Officer until he took over in July, earned $6 million.

Shell’s London-listed “A” shares were unmoved by the news, trading up 0.8 percent at 1,740 pence, compared to a 1.0 percent rise in the DJ Stoxx European oil and gas sector index .SXEP.

(Reporting by Tom Bergin; Editing by Erica Billingham and Louise Heavens)

REUTERS ARTICLE

February 10, 2010, 12:25 PM EST

By Fred Pals

Feb. 10 (Bloomberg) — Royal Dutch Shell Plc’s Chief Executive Officer Peter Voser converted the maximum proportion of last year’s bonus into stock, reflecting his confidence in the long-term prospects of the company’s shares.

Voser got 50 percent of his 2009 bonus, or the equivalent of 931,838 euros ($1.28 million), converted into 47,121 class-A shares, according to a company filing today to the Securities and Exchanges Commission, or SEC. That’s based on a closing share price of 19.775 euros on Feb. 5.

Shell, which competes with BP Plc as Europe’s biggest oil company, has underperformed its closest rival because of falling output and a greater exposure to refining where earnings have been depressed. Voser plans an additional 1,000 job cuts this year as well as cost savings of $1 billion. Shell’s class-A shares are up 3.9 percent in the past 12 months, lagging behind a 13 percent gain for BP.

The CEO has the option of being paid between 25 percent and 50 percent of his bonus in shares, Rainer Winzenried, a spokesman for The Hague-based Shell, said by telephone. The shares have a lock-up period of three years, Winzenried said.

The company said it would cut 2009 staff bonus payments from previously agreed levels because they don’t reflect the “overall competitive position,” according to an internal Shell memo to staff shown to Bloomberg Feb. 4. Payments will be 12 percent lower, after the company’s bonus scorecard was cut to 1.1 from 1.25, according to the memo.

Both Roles

Voser’s bonus for last year covers the six months he served as chief financial officer and the rest of the year as CEO after succeeding Jeroen van der Veer in July. His total bonus for last year came to 1.86 million euros, up from 1.42 million euros in 2008. Voser’s bonus increased, even after companywide bonus payments were cut, because it reflects the fact he’s paid more as CEO.

Shell’s chief also received 227,560 Class-A shares under the company’s long-term incentive plan. The final award can range from zero to two times the conditional award, depending on the company’s performance over a period of at least three years, according to the filing.

Voser received a total compensation of $6.06 million in 2008, including $3.59 million in salary and bonus, according to Shell’s annual report. Overall numbers for 2009 will be released in March.

–Editors: Stephen Cunningham, Will Kennedy.

To contact the reporter on this story: Fred Pals in Amsterdam at +31-20-589-8563 or fpals@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at +44-20-7073-3603 or wkennedy3@bloomberg.net

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