Saturday 12 May 2007
SHELL’S top brass are facing a shareholder revolt in protest at the oil giant’s executive pay policy and one investor body advised a vote against its remuneration report, writes Karl West.
Pensions Investment Research Consultants is urging its members to veto Shell’s boardroom pay report at its annual meeting on Tuesday because it ‘does not disclose the performance conditions attached to outstanding share option awards’.
Shell chief Jeroen van der Veer was paid £2.5m in cash last year and could earn another £2m from a long-term incentive plan that covers the three years from beginning of 2006 to the end of 2008.
Other shareholder bodies, such as the National Association of Pension Funds and the Association of British Insurers, have also flagged up concerns, but are advising members vote in favour at the moment.
David Paterson, head of corporate governance at the NAPF, said Shell’s remuneration policy was ‘alright’, but reckons the company still has some improvements to make.
He believes the company’s deferred bonus plan, which encourages bosses to invest half their annual bonus in shares by awarding matching shares, should be more closely linked to performance.
The Association of British Insurers gave Shell’s pay policy an ‘amber top’ in order to bring to investors’ attention the fact that salary and bonuses have ‘significantly Increased this year by a material amount’.