Shell suffers shareholder anger on pay

Furious shareholders in oil giant Royal Dutch Shell voiced their
displeasure at the directors of the group yesterday at its annual general meeting in The Hague. Nearly 60 per cent of investors voted against the packages being awarded to its top executives, with 59.42 per cent voicing their dissent through the electronic ballot. The revolt at the five hour meeting was the biggest in British corporate history and there was even more anger when it became apparent that the group was going to push through the awards in spite of the protest.

What annoyed investors like Standard Life Investments and Co-Operative Asset Management most was the plan to award bonuses in spite of missing its performance targets, in an echo of the protest vote by a third of BP shareholders last month and even the row over MPs' remuneration. As a result of the awards chief executive Jeroen van der Veer received a package worth £9.1m, which was up over 50 per cent on the year before.

Shell chairman Jorma Ollolia said "We take the outcome of this vote very seriously and we will reflect carefully upon it." However he did not appear to act on his words as the remuneration committee exercised its discretion to act anyway when targets are narrowly missed. The committee's actions brought calls from investors for its members' resignations."

WHAT THEY ARE SAYINGAndrew Hill, the FT: "John Kerr wasn't offered a final cigarette, but there was a moment on Tuesday when the former diplomat, chainsmoker and Royal Dutch Shell director looked to be facing the firing squad. As the only member of the oil company's remuneration committee up for re-election, he was the non-executive most likely to take a bullet for the board at the annual meeting. Lord Kerr lived to smoke another day - But institutional investors - other shot - the 59 per cent vote against Shell's remuneration policy - should be heard around the corporate world."

Richard Fletcher, the Daily Telegraph: "When the directors missed their performance targets, Sir Peter and his committee simply rigged the rules. Its incentives were based on Shell's performance against its four big peers - BP, Chevron, ExxonMobil and Total. To turn on the bonus gushers, Shell had to rank at least third.Shell came fourth. No matter. Sir Peter and his fellow riggers decided that there wasn't a bronze medal of difference between third and fourth. So they allowed Jeroen van der Veer, chief executive, and his fellow directors to take 50pc of the maximum bonus in their long-term incentive plan (LTIP)?Shareholders are rightly furious." ·