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Big shot: Investors left to wonder whether Sir Peter Job is man for the Job

May 23, 2009

Really, he should have seen it coming. Sir Peter Job, the former Reuters journalist and much-travelled non-executive, has been through a couple of bruising battles before over allegations of overly generous executive pay.

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.

The committee used its discretion, investors were told. Coincidentally, in the same week, two other big companies were in trouble over an apparent willingness to move the goalposts to ensure executives were able to slot sufficient balls in the net to allow for huge payouts. Shareholders at Next were angry that the retailer had boosted directors’ pay by rewriting the bonus policy part way through the financial year, though a shareholder revolt at Wednesday’s annual meeting fizzled out and the new package was voted through.

At Cable & Wireless, the board was under fire for deciding that an already controversial three-year long-term incentive plan should be extended for a year after it had to postpone a planned demerger of its UK business because of the credit crisis. C&W showed signs of changing tack in the furore over executive pay by putting in a more conventional bonus package from 2012.

But the real investor anger was at Wednesday’s Shell annual meeting. Investors voted by three votes to two against the plan to ignore previous targets in setting bonuses. The five top directors, including Jeroen van der Veer, the chief executive, will get the £3.65 million payable to them in any event. The bonus scheme’s small print allows for the exercise of discretion by the remuneration committee.

Shell has pledged to talk to investors about their concerns. The bonus scheme continues, again with reference to rival oil groups, but it has been beefed up to take into account factors such as earnings per share and hydrocarbons production.

The company refused to comment on whether changes were planned to the remuneration committee. Sir Peter did not reply to approaches to be interviewed on the subject.

This week’s vote was arguably the worst such defeat of incumbent management of a successful business on the issue of pay since 2003, when shareholders in GlaxoSmithKline, the drug company, threw out a resolution that would have given huge pay packages to executives, including a “golden parachute” for Jean-Pierre Garnier, the chief executive, who would have received about $24 million if he lost his job. The company backed down and agreed to a rethink.

It has not, therefore, been missed this week that one member of the remuneration committee that granted Mr Garnier such an attractive reward for failure was Sir Peter Job, a non-executive there, who joined the board in 2001 after standing down as chief executive of Reuters, where he had spent his working career. Nor that he had been involved in a similar row at another of his non-executive posts, at Schroders, the fund manager.

Sir Peter, who turns 68 in July, is an improbable facilitator for fat cats, being a workaday journalist made good. He grew up in Devon and joined Reuters’ graduate trainee programme.

This is regarded as one of the key launches for a glittering career in journalism and, after joining in 1969, Sir Peter became a correspondent in Paris, New Delhi, Kuala Lumpur, Jakarta and, as manager, Buenos Aires before taking over the Asian operation in 1978.

Described variously by some former colleagues as “prickly” and “intellectually self-assured”, he became chief executive in 1991. He is the last journalist to run the news operation founded by Paul Julius Reuter in 1851.

Under Sir Peter, Reuters widened its range of products for financial markets but was criticised for being slow to use the internet by comparison with rivals. Sir Peter was wrong-footed in 1999 when remarks he made were taken to mean that the company had no online strategy whatsoever – he later admitted he had given journalists a “dilatory answer” – and the share price plunged.

“The internet was purpose-built for it [Reuters],” said a former colleague yesterday. “He let Reuters not engage – he let Bloomberg dominate.”

However, one fund manager was inclined to give him the benefit of the doubt for his performance at Shell. “I was personally very reassured when he called us to explain what was happening,” he said.

“However, it must be said that Shell have never been as good as BP at handling this kind of thing.

“BP have always been far better at providing access to the chairman than have Shell.”

Ups and downs

Background: Studied languages at Exeter College, Oxford; Reuters trainee, then a number of foreign postings

Best break: Becoming chief executive, 1991

Worst break: Apparent fumble over Reuters’ internet strategy, which sent the share price into a tailspin

Style: Self-assured, prickly, aloof

TIMES ARTICLE and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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