NAPF could recommend a vote against Shell executives' package

UK/NETHERLANDS – Instiitutional investors in Royal Dutch/Shell look set to exert their power by opposing the large remuneration packages awarded to executives at the next annual general meeting.

Decisions at the company to award large pay packages in spite of Shell reporting a 23% fall in profits last year have come under fire by investors.

The National Association of Pension Funds (NAPF), which offers recommendations to the 120 subscribers of its voting issues service, which include some of the UK’s largest institutional investors and pension says “it looks like being unable to support” the remuneration packages.

A spokesman at the NAPF said that it is still in the process of putting together a report on Shell, but, as it stands, it does not look possible that it will be able to support the large rises in bonuses.

According to the UK daily, the Financial Times, Shell’s chairman, Sir Philip Watts saw his pay and bonuses rise 55% to 1.8 million pounds (2.6 million euros) last year, including an 874,000 pound bonus.

Criticism has also been reported with regards to a new incentive scheme for executives being proposed by Shell. A spokesman for Shell, however, said it was expecting shareholders to approve the scheme, which will see executives rewarded in shares if they perform well and if the performance of the company is above that of its peers over a three-year period. The spokesman said it was important to hold onto good employees, and said that the proposed scheme “allies the interests of both the shareholders and the executives”.

The Association of British Insurers has also expressed its concern. Peter Montagnon, head of investment affairs at the ABI said that although it does not offer formal advice to shareholders as how to vote, it has flagged up Shell as causing a level of concern. “We have some reservations and we have made them known, “ said Montagnon.

Shell’s annual general meeting is to take place on 23 April. The NAPF’s report on Shell is expected to be released this week.

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