News and information on Royal Dutch Shell Plc.
The speed with which cost savings and efficiencies introduced in the program can filter through to Shell’s financial performance will determine whether the company can return to profit growth early in the first half of the year, or if that recovery will be delayed to the third or fourth quarter as some analysts fear.
Click to continue reading “BP Shines Among UK Oil Companies; Shell Suffers”
Monday 25 May 2009 Page 60
SHAREHOLDER activists Co-operative Asset Management and PIRC have turned up the heat on directors of oil giant Royal Dutch Shell, writes Geoff Foster.
They want them to hand back their bonuses and are calling for the head of Sir Peter Job, who chairs the remuneration committee.
It follows the revolt last week, which saw 60pc of investors vote down the company’s generous executive pay policy.
Shell antagonised investors by casually saying it would take the result Into consideration, indicating there would be no climb-down on its recent bonus pay-outs.
Chief executive Jeroen van der Veer, who received a package worth £8.2m in 2008, was awarded 77,518 shares – worth almost £1.3m at current prices.
Now reports suggest institutional investors are calling for the head of Sir Peter, who waved through the payments, and for the board directors to return their windfalls.
Click to continue reading “Investors angry over Shell bonuses”
Last week, oil giant Royal Dutch Shell experienced a humiliating defeat when 60 per cent of voters refused to accept its remuneration report at the annual shareholder meeting.
But Sir Peter blundered into the minefield again as chairman of the remuneration committee at Royal Dutch Shell, which decided that performance targets previously set should be ignored and that some of the money should be paid regardless.
Published: May 22 2009 03:00 | Last updated: May 22 2009 03:00
From Mr Peter Taylor.
Sir, Your report on the Shell shareholders’ rebellion (May 20) signals, I hope, a long overdue re-alignment between shareholders and management.
Since similar revolts have shaken RBS, BP, Heineken and others, the corporate balance of power is surely shifting from the barons to the peasants. Now the key reform to achieve is a direct link between executives’ remuneration and the success of their business.
In particular, executives who hope for bonuses should first agree to share the pain as well as the gain. Here the model can be private equity, where managers have a significant amount of their own wealth tied up in the business.
No better incentive exists to make sure executives have what Warren Buffett calls “skin in the game”, so that their interests are brought back into alignment with those of their outside investors.
Peter Taylor,
Duke Street,
London W1, UK
Copyright The Financial Times Limited 2009
The unholy alliance between remuneration consultants, non-executive directors and company boards was dealt a bad blow this week, when the shareholders of Royal Dutch Shell (RDSa.L) voted against the company’s executive pay rewards.
Click to continue reading “COLUMN-The Next incentive plan for Shell: Neil Collins”
MAY 20, 2009
By GUY CHAZAN and JOANN S. LUBLIN
Royal Dutch Shell PLC, Europe’s largest oil company, suffered a stunning rebuke Tuesday when investors shot down its executive-compensation plan, in the latest display of shareholder anger over big paychecks and boardroom excesses amid the economic crisis.
![[Shell Annual Meeting]](http://s.wsj.net/public/resources/images/OB-DS031_0519sh_D_20090519141139.jpg)
Getty Images
Royal Dutch Shell’s board is pictured during a shareholders meeting in The Hague, with (from left) Chief Financial Officer Peter Voser, Chief Executive Jeroen van der Veer and Chairman Jorma Ollilla.
Shell is the largest among a growing group of British companies whose shareholders have voted down compensation plans in advisory votes, including Royal Bank of ScotlandGroup, Bellway PLC and Provident FinancialPLC.
Large numbers of shareholders, though not a majority, voted against compensation plans at miner Xstrata PLC, oil major BP PLC, and Pearson, owner of the Financial Times.
The Shell vote, although nonbinding, shows how the economic downturn has inspired a new activism among shareholders, particularly in Europe, and a greater willingness to challenge board decisions, especially those perceived as rewarding failure.
In a charged meeting at Shell’s headquarters in The Hague, which was broadcast live in London to U.K.-based shareholders, a succession of investors lined up to excoriate the board of the Anglo-Dutch company for awarding performance-based shares to executives despite the company’s failure to reach its own internal targets.
Investors gasped in disbelief when results of the vote were displayed.
European investors are angry over bonuses that are relatively modest by U.S. standards. At Exxon Mobil Corp., the largest U.S. oil company, Chief Executive Rex Tillerson received a 2008 compensation package valued at $23.9 million, including $1.87 million in salary, a $4 million bonus and stock grants initially valued at $17.6 million, according to the company’s latest proxy.
Shell Chief Executive Jeroen van der Veer was awarded 78,889 shares, worth about €1.3 million ($1.76 million at current prices), in addition to his salary, bonus and benefits of €5.7 million.
Bloomberg News
Demonstrators gather Tuesday outside the Barbican Center in London, where Shell’s annual meeting was broadcast live to shareholders.
Chief Financial Officer Peter Voser was awarded 38,967 shares, worth about €666,336. Mr. van der Veer is to step down at the end of June, and some shareholders complained that he will also get an award for a three-year period that ends in 2010.
Executives were supposed to get the performance-based shares only if Shell placed in the top three of its peers in a ranking of total shareholder return, based on its share price and dividend payouts.
Shell placed fourth, but the board’s remuneration committee decided to exercise its discretion and award the bonuses.
Shareholders in London’s financial district were met by protesters holding banners and handing out leaflets accusing Shell of human rights abuses in the oil-rich Niger Delta region of Nigeria.
Stony-faced board members also heard strident criticism of Shell’s investments in Canadian oil sands, which green groups have condemned as polluting, carbon-intensive and damaging to the environment. There was also strong disapproval of Shell’s decision to back away from investments in renewables such as solar and wind energy.
“The gravy train has got to stop,” Martin Simons, a retiree, told the board at Tuesday’s meeting. In the end, 59.42% of shares voting opposed the remuneration proposal, and 40.58% backed it.
The rebellion hasn’t yet spread to the U.S., where shareholders, generally voting on executive-compensation practices for the first time, have approved every plan, including those at troubled banks such as Citigroup Inc. and Bank of America Corp.
Shell Chairman Jorma Ollila said board members “take the outcome of this vote very seriously and we will reflect carefully upon it.” But Sir Peter Job, head of Shell’s remuneration committee, stressed it was “advisory” and wouldn’t invalidate the pay award.
The board had previously said it awarded the shares because the difference between Shell and the third-ranking company, France’s Total SA, was marginal and Shell’s ranking didn’t fully reflect its relative performance.
Investors in British companies have been skeptical of pay plans since they gained the annual advisory vote in 2003. That year, investors rejected the compensation plan at GlaxoSmithKline PLC, which later amended it.
But this year’s votes reflect a significant change in investor behavior, with institutional investors and small private shareholders coming together to oppose awards seen as excessive.
Governance watchers said the relatively muted reaction among U.S. shareholders reflected the novelty of the advisory vote on pay, which was enacted by Congress in February for recipients of federal bailout funds. That gave activists relatively little time to organize “vote no” campaigns among other investors.
In the U.K., more experienced shareholders “are not afraid to cast a vote no” on pay plans, said Richard Ferlauto, director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees.
Mr. Ollila, Shell’s chairman, said its remuneration committee had exercised discretion in recent years, in two cases denying share bonuses when directors had qualified for them. He also said the board had received shareholder approval to use discretion in operating the company’s long-term share plan.
U.S. shareholders are voting on compensation plans for the first time this year at about 400 companies that received federal bailout funds, plus a scattering of others that have adopted the practice voluntarily.
Congress may extend the required vote to all publicly traded companies this year. Sens. Charles Schumer, a New York Democrat, and Democrat Maria Cantwell of Washington, introduced a bill Tuesday to do so.
Although many large U.S. companies have already held their annual meetings, a few potential flashpoints remain. Troubled insurer American International Group Inc., which is nearly 80% owned by the U.S. government, said Tuesday it will hold its annual meeting June 30. As a recipient of bailout funds, AIG must offer investors an advisory vote on pay.
Ingersoll-Rand Co. investors will vote on management pay practices June 3. At Exxon andLowe’s Cos., shareholders will cast votes this month on resolutions urging the appointment of independent board chairmen.
Activist investors at Time Warner Inc. and Wal-Mart Stores Inc. have submitted proposals that would make it easier for investors to call special shareholders’ meetings.
Write to Guy Chazan at guy.chazan@wsj.com and Joann S. Lublin at joann.lublin@wsj.com
John Kerr wasn’t offered a final cigarette, but there was a moment yesterday when the former diplomat, chainsmoker and Royal Dutch Shell director looked to be facing the firing squad.
Click to continue reading “Investors take aim after Shell takes them for granted”
: With all of this money spent on the CEP expansion, it has been built on an old electrical infrastructure. I guess no one is counting how many times you read about a "short" electrical outage at the plant. Tom Purves and the Motiva leadership know exactly why this is happening and how to fix it. They don't want to pay for it. They have been given the project and have turned it down at least twice. Meanwhile, we just keep having outages. Going ot be interesting when both refineries come down in the future.
: LondonLad: the lack of stories concerning Shell should be welcomed, if it implies that Shell are cleaning up their act, perhaps due in part to the efforts of the Donovans.
: US Observer, surely almost all (NOT all)contributors to this website have an axe to grind against Shell, particularly those who have a perception that they have been screwed by Shell in times gone by. As for Itchy Woman, she clearly has a femanistic / burn-the-bra approach to work in Shell. AND I would like to add that once again an old old article (from someone who has an axe to grind against Shell) has to be republished due to lack of news against Shell (I refer to Briggs 2009 article). COMMENT BY JOHN D. Would it not be fairer to say that everyone posting on this blog, including you, has an axe to grind. It is easy enough to look back over your contributions and reach a conclusion.
: It is easy to figure out who Witchy Woman is (LC). She has an "ax to grind" and is using this forum
: @uscitizen Voser is a competent and amicable chap. You claim Shell has delivered on its deliverables. Let me tell you everyone delivers on their deliverable.... But joking apart, look at the promises over the years and how well Shell has delivered on these promises. Their trackrecord is not very good over the last 15 years or so. They are a good money making machine. And sofar they have delivered on their constant or increasing dividend payments. Sometimes by increasing their debt but they have done it. A nice high oilprice has helped, don't you agree?? So my only observation was that his 'promise' to extend North Sea fields is quite opposite their activities in this area. And they have promised this before and done the opposite. It was a nice promise to build a new and expensive office in Aberdeen, more jobs for the UK and more activity and extending of production. Just check back what they have done. And predicting future productionlevels by Shell in general and Brinded in particular is nothing but a sick joke.
: To - an observer of Shell Shell has been delivering on its deliverables - why would you paint Voser as some one who is not??
: This was not a personal attack now was it Witchy one?? #133 Witchy woman on May 8th, 2011 at 1:42 pm Marvin Odum who probably has the worst safety record in Shell goes for a diversity vote and someone who has no safety experience to replace the VP of safety he just fired. Clear message where his priorities lie.
: Witchy Woman - you blase me for personal attacks???? That is so rich! I am defending people that are attacked if you had not noticed - and yes I do slam the folks who are throwing garbage out! Live with it!! Enjoy your retirement! Shell has a good retirement package in the US dont they??
: I feel the value of your posts is also minimal, just a complainer. PS - here is where you bash Denise - remember - or do we need to question your integrity the way folks question Shell leaders?? Witchy woman on Dec 7th, 2011 at 12:35 pm In GOM we thought that hurricane season was done. Why is Hurricane Denise causing so much damage then? Like all Hurricanes though they move on the professionals are left to pick up the pieces.
: According to the Independent article posted today the boss of Shell is telling us all not to get too emotional about fracking. Has he not seen the confirmation that fracking causes earthquakes? You have cited the Reuters article. There are others including coverage of a fracking earthquake in Blackpool England. I have to conclude that Voser is a fracking idiot.
Shell Blog RSS Feed
