Royal Dutch Shell Plc  .com Rotating Header Image

Shell investor anger will test patience of Job

guardian.co.uk home

  • Nils Pratley
    • The Guardian, Wednesday 3 June 2009

Sir Peter Job, chairman of Shell’s remuneration committee and City grandee, should know the drill. When the majority of voting shareholders in a major FTSE 100 company give a thumbs-down to the report on directors’ remuneration, vague words from the non-executives about “reflecting carefully” only buy a little time. After a while, action is expected, which usually means a resignation.

That’s what happened in 2003 at GlaxoSmithKline in the big protest over Jean-Pierre Garnier’s potential payoff. A fortnight after 51% of shareholders voted against the remuneration report, Paul Allaire, chairman of the remuneration committee, was out. Keith Butler-Wheelhouse didn’t last much longer at Sainsbury’s after the protest against Sir Peter Davis’s payoff in 2004. In Sainsbury’s case, a U-turn by family shareholders spared the board the humiliation of defeat on the day, but Butler-Wheelhouse was toast anyway.

A fortnight after Shell’s defeat, it’s worth asking: what is Job waiting for? If he’s hoping that shareholders’ anger will abate, he will be disappointed. Fund managers remember how he referred to the bonus issue as “an irritant” and they are determined to be irritating.

More likely, Job fails to appreciate why investors are angry. Let’s spell it out: Shell paid £3.6m in bonuses to directors even though performance targets were missed – the firm finished fourth, rather than third or better, in a league table of big oil companies ranked by shareholder returns. Yes, the small print allowed the remuneration committee to use discretion but the 60% vote against its report shows that shareholders think the right was abused.

Job plans meetings with shareholders in autumn, suggesting he thinks he can survive that long. Maybe he can but humiliation looks inevitable if he’s still clinging on at next year’s annual meeting. A prompt resignation would surely be more dignified.

[email protected]

Guardian Article

royaldutchshellplc.com and its also non-profit sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Shell investor anger will test patience of Job”

Leave a Comment

%d bloggers like this: