As the senior managers at Shell and BG ploughed their way through two intense UK press conferences about their deal, there was one noticeable absence – BG Group’s boss, Helge Lund.
Mr Lund could walk away from the takeover deal with as much as £25m, only months after investors forced the company to scrap a “golden hello” package that was awarded to him.
And given that Mr Lund will leave fairly soon after the deal goes through, he could be forgiven for wanting to avoid awkward questions.
But BG’s chairman, Andrew Gould, insisted that “nothing whatsoever” could be read into his absence, which he attributed to the “remote” location of the company’s headquarters – in Reading.
“Helge Lund is taking care of the internal communication to the BG workforce. He held one phone call with everybody to the east here at 6.30am this morning and he’s holding another one [later] with everyone to the west of here,” Mr Gould said.
“He will be on certain media calls later and he’s also calling investors. So it’s the fact that BG has this location which is somewhat remote from central London, which is Reading; it takes two hours to get here from Reading, so we had to split the role. That’s all,” he added.
The first of the major UK press briefings Mr Lund missed was an early-morning conference call, while the second one, which managers attended in person, was held in the City of London.
Mr Lund built his reputation during a decade-long stint at the helm of Statoil, where he gained the nickname of Norway’s Mr Oil.
Having transformed the company from a small domestic operator into a global business with interests in the Gulf of Mexico and the Russian Arctic, he was expected to move into politics.
Instead he decided last year to join the struggling British exploration giant BG.
His decision was helped by the offer of a £12m “golden hello” from BG, on top of an annual pay package worth up to £13m.
This was met with anger from investors such as Legal & General – and even by the Institute of Directors, which described the pay award as being “excessive and inflammatory”.
The Business Secretary, Vince Cable, waded into the row, urging fund managers to reject it at an extraordinary meeting scheduled for mid-December.
The pay award was eventually cut, meaning BG did not need to hold a binding vote on the payment. However, the planned tie-up with Shell could now mean the 52-year-old receives up to £25m for just a few months’ work.
Mr Lund, who joined BG in February, is expected to stay on for a while after the deal is completed to help Shell’s boss, Ben van Beurden, manage the transition.
During this period, BG’s remuneration committee, which is led by Sir John Hood, will decide how much Mr Lund will be awarded when he stands down.
One source close to BG said the committee has “listened and learned from the last issue”.
Shareholders seemed to agree that BG’s management team has agreed a good price with Shell; one shareholder, who wished to remain anonymous, described Mr Lund’s potential payout as “nice work” by the Norwegian executive.
Others are likely to complain that he is being handed too much money for such a short stint.
Shareholders in both companies were split on the merits of the deal.
Trevor Green, at Aviva Investors, said: “The word that springs to mind is opportunistic as BG is just going through early-stage transition at the CEO level.
“There also still needs to be a lot more reassurances on Brazilian assets.”
However, Chris White at Premier Asset Management said: “The two companies look like quite a complementary fit.
“The timing of the deal looks apposite given that BG’s cashflows are set to improve over the next few years and oil companies are under pressure due to weak oil and gas prices.”
“Most interestingly, perhaps, is that it shows the mindset of big oil companies towards mega-mergers.”Reuse content