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Shell plans bonus to rally workforce

Sunday Times: Shell plans bonus to rally workforce

“some staff in the exploration and production division had oil-reserves replacement as one of the targets that determined their pay.”

Lucinda Kemeny

August 29, 2004

ROYAL DUTCH/SHELL, the embattled oil giant, intends to launch a new, company-wide bonus scheme from January as an incentive for staff to work together to rebuild the company’s credibility.

The plans are still subject to staff negotiation in some countries, but about 90,000 people are expected to be covered by the arrangements.

Jeroen van der Veer, chairman of the committee of managing directors, said he hoped it would encourage staff to think “enterprise first” rather than “self first”.

He said he had asked management whether “the balance between enterprise first and self first had moved too much to self first”. Ambition is good, he added, “but ambition with disregard for peers or subordinates creates the wrong culture”.

At present, all Shell staff are eligible for an annual bonus, the size of which depends on company and individual performance.

The performance of each individual’s business unit has also played an important part in determining the size of payout. For example, some staff in the exploration and production division had oil-reserves replacement as one of the targets that determined their pay. Such divisional targets will now be dropped.

Meanwhile, Van der Veer also warned national governments to do more to encourage oil companies to invest in riskier projects now that all the easier developments had been done. This would increase supply and bring down oil prices.

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