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executive pay frozen and bonuses linked to sustainability at Shell

2010

Oil giant Shell has announced that it will limit executive pay and consider sustainability performance in its future bonuses.

Shell will link 20 per cent of performance measurements to the criteria used for the Dow Jones Sustainability Index, while the salaries of chief executive Peter Voser and chief financial officer Simon Henry are to be frozen until 2011.
 
The move follows a shareholder backlash last year against Shell’s pay plans at the company’s AGM, where 60 per cent voted against the remuneration measures. Shell says the measures come after months of ‘open and constructive dialogue’ with shareholders. In a letter to shareholders, it said it wanted to retain the ‘alignment between executive and shareholder interests’.

Erik Breen, head of responsible investment at Robeco Investment Management, which led the shareholder opposition in the Netherlands opposition to company’s original plans, praised the ‘good process’ of the talks and said other firms should look to Shell as an example on the issue of remuneration.



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