By LANANH NGUYEN

THE WALL STREET JOURNAL

MARCH 16, 2010

LONDON—Royal Dutch Shell PLC’s Chief Executive Peter Voser’s earnings rose 22% in 2009 to $4.4 million, according to the company’s annual report Tuesday.

Mr. Voser, who became CEO in July 2009, earned $3.6 million in 2008 while serving as the company’s chief financial officer. The earnings include Mr. Voser’s salary and performance bonus.

Shell proposed in February changes to how it pays its executive directors in an attempt to assuage concerns that led shareholders to reject its remuneration package last year.

“In my view, the most significant of these changes are that we have committed not to use upward discretion on share awards without prior consultation with major shareholders, we have updated the metrics for the incentive plans and we have ended the practice of free matching shares in our deferred bonus plan,” said Hans Wijers, chairman of the Shell’s remuneration committee, in a letter to shareholders.

— James Herron contributed to this article.

WSJ ARTICLE

March 16, 2010

David Wighton: Business Editor’s commentary

He arrived with a bang and within weeks had axed 5,000 jobs. But eight months after taking over the helm at Royal Dutch Shell, is Peter Voser making progress turning around the supertanker?

Long derided as the most sluggish of the top oil companies, Shell will today try to persuade investors at its annual strategy briefing that it is back on course. There certainly are some encouraging signs. For six years, oil production has been drifting lower at an average of 3.5 per cent a year. But with a series of big projects due to give the figures a boost this year, production is expected to stabilise at about 3.2 million barrels a day in 2010. In 2011 it could start growing for the first time in almost a decade.

Mr Voser can claim only limited credit for this trend, which reflects years of investment. But his own changes are starting to have an impact, in particular a sweeping reordering of the company that has reduced costs and improved focus.

For years, Shell was plagued by delays and budget overruns on big projects. So far, his creation of a separate division, Projects and Technology, responsible for masterminding large-scale operations, seems to be working well. Compared with peers such as Exxon and BP, Shell has been slow to make such changes, but that means the potential for improvements is greater.

Mr Voser has promised at least another $1 billion in cost cuts this year and will provide further details today.

He is still grappling with huge challenges — not least Shell’s sprawling refining and marketing operation, which is struggling in the face of the industry’s most severe downturn in 20 years. The group’s poor record at finding new supplies of oil and gas also remains a profound problem which Voser must address.

Still, his decision to sell some of Shell’s onshore Nigerian assets and bid for Arrow Energy, an Australian producer of coal-seam gas, show that he is willing to give the portfolio a good shaking. It will be years before Mr Voser’s performance can be judged properly — but so far so good.

david.wighton@thetimes.co.uk

TIMES ARTICLE

A reshuffle on the Royal Dutch Shell board, which drew investor approbrium over pay last year, sees the hiring of former DuPont chief executive Chad Holliday Jr . The American is a co-author of Walking the Talk, putting a business case for corporate responsibility.

As Shell chairman Jorma Ollila endeavours to placate investors, Sir Peter Job , former head of the pay committee, and Shell nomination committee head Lawrence Ricciardi , a Citigroup director, retire at the May annual meeting.

people@ft.com

FULL FT ARTICLE (SUBSCRIPTION)

Lobbyists bid to turn RBS, BP and Shell annual meetings into green referendums

CIVILSOCIETY.CO.UK

Vibeka Mair | 22 Feb 2010

Campaigning charities FairPensions and WWF have joined a coalition which is lobbying oil giants BP and Royal Dutch Shell over their investments in environmentally controversial oil sands developments.

The coalition, which also includes Unison, Greenpeace and the Co-operative banking group, is asking pension scheme members to email their fund managers to push them to support shareholder resolutions against oil sand projects that are due to be voted on at BP and Shell’s annual general meetings this spring.

It follows the coalition’s successful effort in encouraging over 200 shareholders in BP and Shell to bring the resolution on oil sand projects to the AGMs. Investors sponsoring the resolution included faith groups and charitable foundations, according to a spokesman.

Joseph Rowntree Charitable Trust, which as of 10 February had £967,457 invested in BP ordinary shares and £206,879 in Royal Dutch Shell ordinary shares, has sponsored the resolution and plans to vote for the resolution on tar sand deposits.

A Joseph Rowntree spokeswoman said: ”Like other responsible shareholders we are concerned, for a number of reasons, that these investments could become not only unprofitable but also stranded assets.  We are therefore asking the companies to keep us informed.”

The size of tar sand deposits, combined with unusually high greenhouse gas emissions, means that they threaten to be a major contributor to climate change.

Investors and industry analysts increasingly raise concerns about the long-term profitability of tar sands, specifically pointing to very high operating costs, expected carbon price rises, oil price volatility, expected fluctuations in demand, regulation of greenhouse gas emissions, and the legal and reputational risks arising from environmental damage and human rights cases.

The Joseph Rowntree Trust last week sold its £1.9m stake in FTSE100 mining company Vedanta because the company had refused to act on its concerns about human rights and environmental abuses.

SOURCE ARTICLE

Financial Times

By Brian Groom, Business and Employment Editor

Published: February 21 2010 23:03

A two-tier market is emerging in executive pay in the UK’s largest listed companies, with those that have come strongly through the recession able to offer better remuneration than their rivals, according to new research.

Royal Dutch Shell, ranked ninth in 2007-08 with £11.4m, rose to third last year with £15.3m. But the company is now freezing executive directors’ salaries for a year as part of a new pay structure after an investors’ revolt.

FULL FT ARTICLE (SUBSCRIPTION)

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

THE WALL STREET JOURNAL

FEBRUARY 16, 2010

By JAMES HERRON

LONDON—Royal Dutch Shell PLC on Tuesday proposed changes to the way it pays its executive directors in an attempt to assuage concerns that led shareholders to reject its remuneration package last year.

The proposals constitute a significant step toward greater pay restraint at one of the world’s largest companies at a time when excessive awards to executives, particularly at banks, are a political hot potato.

The salaries of Shell Chief Executive Peter Voser and Finance Chief Simon Henry will be 20% lower than those paid to their predecessors and will be frozen from July 2009 until January next year, according to proposals outlined in a letter from the chairman of Shell’s remuneration committee, Hans Wijers.

However, the maximum shares the CEO could be awarded under the performance-related long-term incentive program would be increased from two times to three times salary, “thereby providing greater alignment with shareholders’ interests,” Mr. Wijers said in the letter, which has been posted on the company’s Web site.

Shell has broadened the criteria by which this performance is assessed. Formerly, the only measure of performance was comparing total shareholder return against Shell’s peer group of integrated oil companies. This has now been broadened to include earnings per share, net cash flow from operations and oil and gas production.

The main concern that led shareholders to reject last year’s pay package was that directors were awarded a share bonus under the company’s long-term incentive plan despite performance targets being missed. The new proposals would prevent the remuneration committee from doing this, the letter said, although only for 2010. “In future, there will be no use of upward discretion in the vesting of these plans without prior shareholder engagement,” said Mr. Wijers.

The proposals are the result of a “wholesale review of remuneration policy” and extensive consultations with Shell investors, following a highly unusual vote at last year’s annual general meeting, where 60% of shareholders rejected the executive directors’ remuneration package, the letter said.

“I believe there was broad support [from shareholders] for the direction we are taking,” wrote Mr. Wijers.

Write to James Herron at james.herron@dowjones.com