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Pay Bonanza for Shell Fat Cats

Shell Peter Voser

In the money: chief executive Peter Voser

Big bonuses back at Shell as it declares 12% output jump

Lucy Tobin Lucy Tobin
15 Mar 2011

Just two years after Shell faced one of the biggest rebellions ever seen over pay at a FTSE 100 company, the oil major today rewarded chief executive Peter Voser with a 19% increase in his pay packet.

Last year, the oil giant froze its executive pay-outs in response to investors in 2009 voting down its plans to award millions of pounds of shares to bosses despite missing performance targets.

Today, however, in its annual report, Shell said that last year Voser was rewarded with a 19% jump in remuneration, with his €1.5 million (£1.3 million) salary being supplemented with a €3.75 million bonus. That took his total pay to €5.25 million, up from €4.4 million the previous year.

Shell’s remuneration committee also raised Voser’s basic salary up to €1.55 million this year.

Malcolm Brinded, head of upstream at Shell, pocketed a pay deal worth €3.5 million last year, up by a third from €2.6 million the previous year.

The pay bonanza came after Shell missed expectations for its profit last year, despite soaring Brent crude prices helping it rake in almost £1.6 million an hour in the last three months of last year, and post an underlying profit of $18.6 billion (£11.61 billion) for 2010, up from $9.8 billion a year earlier.

Today it set out ambitious growth plans – including significantly hiking its production target for oil over the next three years – and set aside more than $100 billion for investment in the period.

Despite fears Japan‘s earthquake will hit demand for oil, driving the price of London Brent down from recent highs to $109.90 a barrel, Voser expects prices to keep rising.

“Energy demand is growing so fast over the next few decades, we will always be struggling to keep supply actually growing,” he said.

“I look beyond the Middle East, and for that matter Japan, to the developments across the world, with a very strong rise in population and average living standards which normally demands more energy.”

Shell said plans to produce 12% more oil by 2014 than it did last year – one of the highest growth rates in the industry. It reckons it will produce 3.7 million barrels of oil equivalent per day in 2014, and Voser said that he expects crude prices to remain on an upward trend.

One year into a three-year push to boost its performance, where Shell has sold a raft of refining assets, Voser added: “We have made good progress in 2010. Our profitability is improving and we are on track for our growth targets.”

Shares fell 30.5p to 2089.5p.

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