Shell became the latest company to receive a bloody nose yesterday, as more than a tenth of the oil giant's investors failed to approve the pay awards of its top-level executives.
Despite Shell reporting a 54 per cent jump in profits last year, just over 9 per cent of investors voted against the pay award for chief executive Peter Voser which more than doubled over the period. Including abstentions, 11 per cent of shareholders failed to back Shell's remuneration report.
"I think it is excessive," said John Farmer, a Shell shareholder, about Mr Voser's €11.7m (£9.4m) total pay award – up from €5.2m in 2010 – helped by a €4.6m payout as three lucrative, long-term incentive plans vested. In 2011, Malcolm Brinded, who stepped down as head of exploration and production in April, received a total of €11.4m.
Although it was considerably smaller than the majority votes against some recent remuneration reports – such as Aviva and Pendragon – opposition to Shell was well up on last year, when the no vote came to just 1.24 per cent.
The rise in opposition came against a backdrop of growing shareholder resistance to large executive payouts, and, in part, on the recommendation of investor advisory group PIRC which guided investors to oppose Shell's remuneration report for 2011. "Combined remuneration is excessive in the year under review with the CEO receiving annual incentive and conditional LTIP (long-term incentive plan) awards worth 526 per cent of salary," PIRC said in its report ahead of the Shell AGM.
A Shell spokesman said: "Shell's remuneration policy firmly links executive compensation with the performance of the company, and the 2011 outcomes reflect what was a positive year."
Last week, investors revolted against insurance giant Prudential, the oil explorer Cairn Energy and the engineer Cookson. These revolts were the latest in a series which also included very bloody noses for Barclays and William Hill, the bookmaker.Reuse content