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Investors angry over Shell bonuses

Press Association

24 May 2009

Furious investors are calling for Royal Dutch Shell bosses to hand back recent bonuses amid an escalating row over the oil giant’s pay awards, according to reports.

Shareholders are also said to be demanding the resignation of Sir Peter Job – the chairman of Shell’s remuneration committee and figure at the centre of the oil giant’s controversial decision to pay out big bonuses despite missing targets.

Shell suffered a humiliating defeat at its annual shareholder meeting last week when investors voted down its remuneration report in protest at the decision to side-step performance criteria under its long-term incentive plan (LTIP).

More than 59% of shareholders voted against the remuneration report, but Shell said it would only take the result into consideration, indicating that there would be no climb-down on its recent bonus payouts.

According to Shell’s annual report, chief executive Jeroen van der Veer, who received a total package worth £8.2 million in 2008, was awarded 77,518 shares – worth almost £1.3 million 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.

A wider boardroom shake-up is also being urged as fears mount that Shell’s management line-up is becoming increasingly out of touch, according to The Sunday Times.

Shell was not immediately available for comment, but said after last week’s AGM vote that it would “reflect carefully” on the result and had “introduced additional performance measures for future awards”.

The Anglo-Dutch firm maintained that it had used its discretion under previously agreed rules when deciding on the bonuses.

Its incentive award targets are largely based on its performance against peers BP, US firms Chevron and ExxonMobil and France’s Total.

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