UPDATE: PIRC Urges Shell Holders To Vote Against Bonus Plan
May 06 2009 - 1:25PM
Dow Jones News
U.K. investor advisory group Pension Investment Research
Consultants Wednesday joined the growing opposition to Royal Dutch
Shell PLC's (RDSB.LN) decision to award executives a performance
bonus despite missing internal targets.
"We recommend shareholders oppose the remuneration report," at
Shell's annual general meeting May 19, PIRC said in a statement.
The decision of Shell's remuneration board to award the bonuses
"undermines [the] consistent long-term approach to performance,"
PIRC said.
One of Shell's largest shareholders, Standard Life Investments,
also criticized the company's remuneration decision Tuesday.
"This is the second year in a row that the remuneration
committee has used its discretion to reward the executives for
below-average returns to shareholders, which raises serious
questions about whose interests they are looking after. We have
voted against Shell's Remuneration Report for each of the last
three years," said Guy Jubb, head of corporate governance at
Standard Life Investments, which is part of asset manager Standard
Life PLC (SL.LN), in a statement.
The Association of British Insurers, which advises insurance
companies that invest in equities on corporate governance, has
issued an "amber" alert on Shell's remuneration plans, and
shareholders should consider if the exercise of discretion is
appropriate in this case, a spokesman said.
Shell came fourth among its peers in an internal ranking, which
under the rules of the long-term incentive scheme should have meant
executives received no share bonus. The difference with the
third-placed company, Total SA (TOT), was marginal and the
remuneration committee looked at a variety of performance measures
and results and concluded that the ranking "didn't reflect Shell's
underlying strong performance," a Shell spokesman said. Executives
were awarded half the shares they would have received in third
place.
Company Web site: www.shell.com
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317;
james.herron@dowjones.com