Watts may lose his Shell pension

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The Independent Online

Shell is considering withholding an £8m pension and more than three million share options from former chairman Sir Philip Watts. Sir Philip, who was sacked earlier this month, might not receive any pay-off at all from the company.

Shell is considering withholding an £8m pension and more than three million share options from former chairman Sir Philip Watts. Sir Philip, who was sacked earlier this month, might not receive any pay-off at all from the company.

Shell is being investigated by the US regulator, the Securities and Exchange Commission, after he reclassified a fifth of its "pro-ven" reserves as "probable". The overbooking of reserves took place between 1996 and 2002, mostly when Sir Philip was head of exploration and production.

Normally, he would be entitled to a minimum of three months' pay if he had resigned, which would amount to £186,000 based on his 2002 salary. But a source close to the company said: "These are not normal circumstances. He did not give his notice. He did not resign. The boards will decide what - if anything - he will get."

This week Shell will publish its annual report for 2003. Including bonuses, Sir Philip could earn almost £2m if the remuneration committee's performance targets are met.

Lawyers also said that if the SEC decides that Sir Philip knowingly mis-stated Shell's reserves, the company could sue him and demand repayment of previously paid bonuses. Between 1996 and 2002, Sir Philip received over £2.6m in performance-related bonuses and realised share options.

John Reed, partner at US corporate law firm Duane Morris, said: "If the SEC determines that Sir Philip knowingly mis-stated Shell's reserves, Shell could take steps to recover any of his performance-related bonuses, which were boosted by the reserve mis-statements and corresponding artificial inflation of the share price."

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