Royal Dutch Shell Plc  .com Rotating Header Image

Shell reveals $6bn pension hole as exec pay rises sharply

FT Home

By Ed Crooks, Energy Editor

Published: March 17 2009 21:08 | Last updated: March 17 2009 21:08

Royal Dutch Shell, Europe’s largest oil group, will have to pay up to $6bn (£4.3bn) to fill the hole in its pension fund, at a time when its revenues are under pressure from the fall in oil prices, the company revealed on Tuesday.

In its annual filing to the US Securities and Exchange Commissions, Shell revealed an $8.3bn pension fund deficit, equal to about 5 per cent of its market capitalisation.

The filing also showed that Shell’s senior ­executives received sharply higher ­remuneration last year, even though its performance in terms of shareholder returns was the worst among the leading western oil companies.

Jeroen van der Veer, the chief executive who steps down in June, was paid a total of €10.3m (£9.54m) in 2008, up 58 per cent from his remuneration in 2007.

Other senior executives enjoyed steep increases. Peter Voser, the chief financial officer who will take over as chief executive in July, was given a 45 per cent rise to €4.14m.

The details on the pension deficit and pay emerged as the company delivered its yearly update.

Shell indicated that it expected to raise its dividend for the year by 5 per cent, but warned that gearing, as measured by net debt as a proportion of capital employed, would rise sharply, from 6 per cent to the “low 20s” by the end of the year.

Shell also said that it did not plan to make any further investments in wind and solar power. The planned pension contribution of $5bn-$6bn, which Shell said would come on top of its regular $1bn-$2bn contributions of recent years, adds to the financial pressure on the company.

The slump in equity markets and bond yields has taken Shell’s funded pension scheme into deficit from a $13.7bn surplus at the end of 2007.

Bonuses and incentive payments for 2005-07 were paid even though Shell’s performance in terms of total return to shareholders ranked fourth among the “big five” international oil companies: Shell, ExxonMobil and Chevron of the US, BP of the UK, and Total of France.


In depth: Oil – Feb-03

BP chief signals dividend freeze – Mar-04

Copyright The Financial Times Limited 2009


This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.