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Times Online: Pay rise for Shell CEO

March 14, 2007
Steve Hawkes

The oil major proposes easier bonus targets as Jeroen van der Veer pockets £2.5 million for 2006

The oil giant Shell is altering its bonus structure to make it easier for main board directors to scoop bigger payouts, it emerged today.

The news came as the group’s annual report for 2006 showed that Jeroen van der Veer, the chief executive, took home more than £2.5 million last year, up 6 per cent.

Shell is proposing to modify its bonus structure so that Mr van der Veer and his board colleagues can receive more for “overall above-target performance” in any one year.

Instead of receiving between 100 per cent to 110 per cent of basic salary, Shell wants to be able to pay out between 110 per cent to 120 per cent.

The maximum bonus, including all elements, will remain 200 per cent, or two times salary.

A spokesman said that the move would put Shell in line with the rest of the industry.

“This ensures we are able to attract and retain the best,” he added.

The annual report shows today that Mr van der Veer’s basic salary climbed to £1.2 million last year after a 9.7 per cent pay rise, more than three times the rate of inflation.

He pocketed an annual bonus of nearly £1.4 million, given Shell’s record profits.

Shell also awarded Mr van der Veer shares worth £2.3 million under a long-term incentive scheme, but these are conditional on the group’s performance over the next three years.

None of the senior directors was paid anything under the long-term shares scheduled to vest in 2006 after missing shareholder total return targets in the past three years.

Shell’s annual report comes only a week after its fierce rival BP revealed that Lord Browne of Madingley stood to pocket a golden goodbye of up to £15 million this summer.

His pay packet fell to £2.5 million from £3.3 million in 2006 after BP halved the annual bonus payout.

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