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Shell boss faces investor rebellion over £13.5m pay package

The Guardian

Shell boss faces investor rebellion over £13.5m pay package

Pirc urges shareholders at AGM to vote against Ben van Beurden’s ‘excessive’ pay

Alex Lawson Energy correspondent: Wed 18 May 2022 15.16 BST

The chief executive of Shell is facing an investor revolt over his £13.5m pay packet, as oil and gas firms battle growing calls for a windfall tax on their profits.

The investment adviser Pirc has urged shareholders to vote against Ben van Beurden’s pay packet at next week’s annual general meeting, calling it “excessive”.

The Dutchman picked up £6.3m last year, up from £5.2m a year earlier. The company has given him a 3.5% increase in salary to £1.42m and he has the opportunity to land a further £12.1m in cash and shares by hitting company targets.

Pirc said the chief executive’s salary was in the top 25% of a peer comparator group “which raises concerns over the excessiveness of their pay”.

It also called for “the fallacy of alignment with shareholders to be retired”. Companies typically argue that large share awards incentivise executives to increase the stock price for investors.

Van Beurden, who relocated to London from The Hague this year, has seen the value of his stock in the company balloon from £14m a year ago to £23m as investors have piled into oil and gas stocks during the energy crisis.

Reports of bumper profits and pay at oil companies have sparked calls led by the Labour party for a windfall tax on North Sea oil and gas operators to pay to reduce household energy bills.

Boris Johnson has said he believes a one-off levy would deter investment into the UK by energy companies. His Labour counterpart, Keir Starmer, on Wednesday urged the prime minister to “make up his mind” and said a U-turn on the tax was “inevitable”.

Van Beurden has received more than £70m in pay and bonuses since taking the job in 2014. He suffered a shareholder revolt over his £8m pay packet in 2018.

His pay has significantly diminished since the £17.8m he landed before Covid lockdowns hit oil stocks.

Van Beurden was last year docked £132,283 – 10% of his base salary – after the firm recorded eight deaths. The fatalities included six workers at an engineering contractor killed when gunmen attacked a bus convoy en route to a gas project in Nigeria.

The investor advisory service Glass Lewis said not reducing his payout by more “risks sending a mixed message to the executives as to the company’s overarching safety goal” but still suggested shareholders should vote in favour of Shell’s pay proposals.

The company’s long-term plan to reduce its emissions will also be discussed at its annual meeting, which takes place in London on Tuesday.

The Shell investor Royal London said it intended to abstain on a vote on the firm’s climate transition proposals. “There is not enough certainty in the plan that it aligns with the goals of the Paris agreement and the global necessary efforts to constraint temperature increases to below 1.5C,” Carlota Garcia-Manas, the head of engagement at Royal London Asset Management, said.

The Dutch activist group Follow This wants the company’s policies to be more consistent with the Paris climate accord. Shell’s board has told investors to reject the group’s resolution that asks it to set more stringent climate goals.

The Follow This founder, Mark van Baal, said: “We hope investors do not give in to the narrative from oil companies that the crisis created by the war in Ukraine overrides the climate crisis.”

Shell declined to comment.

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