Shell’s latest pay report sparked a strong show of protest, with nearly 10% of investor votes rejecting it at the firm’s annual meeting.
The oil and gas giant became the latest company to suffer considerable shareholder anger over bosses’ pay in a wave of AGM votes dubbed the “shareholder spring”.
Shell chief executive, Peter Voser earned £9.5million in 2011, double the amount he received in 2010, after lucrative long-term incentive plans paid out.
Investors who have seen little change in the company’s share price over the past year were critical of the package but Shell’s bosses said it reflected the firm’s performance after a 54% jump in profits to £18.1billion in 2011.
At 9.1%, yesterday’s protest vote against the firm’s remuneration report was up from opposition of 2% a year ago.
Mr Voser earned £4.2million in annual salary and bonus awards in 2011, which was slightly down on the previous year, but his total pay was boosted by £5.2million from long-term reward plans.
Shareholder body Pirc advised clients to vote against the pay deal and the rest of the remuneration report, saying it was not convinced that long-term incentive plans introduced in 2009 were challenging. Urging investors to reject the report, Pirc said Shell’s incentive scheme offered “generous rewards even for hitting just one of four performance targets”.
Although executive salaries at Shell have effectively been frozen since 2009, Pirc said they were still higher than most group peers and were poised to increase between 3% and 5% in 2012.
Shell recently announced profits of £4.75billion for the first three months of 2012 after it cashed in on high oil prices. The first-quarter haul – measured on a current cost of supply basis – was 11% higher than a year ago.
The firm said its higher profits reflected improvements in its operating performance and better production volume.
Boardrooms around the UK have been rocked by shareholder revolts in recent weeks, driven by anger that huge salaries and even bigger bonuses are out of kilter with falling share prices and pressure on profits.
Just last week, Scottish oil explorer Cairn Energy suffered a near-70% protest vote against its remuneration report.
Business Secretary Vince Cable and his department have finished a consultation on binding shareholder votes, which would mean pay deals require the support of 75% of votes, and will update on progress next month.
One of Russian President Vladimir Putin’s closest confidants, Igor Sechin, was named chief executive of Rosneft yesterday.
Russia’s former energy ‘tsar’ has been put in direct charge of the country’s biggest oil firm. Mr Sechin’s move from the corridors of power to the executive suite at Rosneft marks the culmination of his evolving role over the past decade as mastermind of strategic energy policy in the world’s largest oil-producing nation.