Shell showdown

Tomorrow is Shell's AGM. There's some opposition to the company's remuneration policy, including the lack of linkage between exec pay and safety. Personally I'm not expecting a massive vote against.

Here is IPE's take on it:

Pensions revolt looms over Shell salaries

IPE.com 14 May 2007 16:03:

UK/NETHERLANDS - Pensions Investment Research Consultants (Pirc) has recommended Royal Dutch Shell investors vote against the company's remuneration report at the oil major’s annual meeting on Tuesday in The Hague.

Shell does not disclose the performance conditions attached to outstanding share awards so investors should reject the remuneration deals tabled, according to corporate governance consultancy Pirc.

“Taking the long-term incentive plan (LTIP) and the deferred bonus plan in conjunction, vesting targets are not considered sufficiently challenging in light of the level of award,” commented Pirc.

The group added: “We also have concerns over the vesting scale and the small size of the comparator group.”

At the same time, Research, Recommendations and Electronic Voting (RREV), whose director David Paterson is also head of corporate governance at the National Association of Pension Funds (NAPF), has flagged similar concerns but has instead advised members to vote in favour.

Earlier last month, the Local Authority Pension Fund Forum (LAPFF), the activist public sector fund coalition, announced it is urging its members to vote against Shell’s remuneration policy.

LAPFF argues Shell, like its rival BP, should do more to link remuneration to management of non-financial issues like safety and climate change.

Shell today also announced Rijkman Groenink had requested the withdrawal of his nomination to the board.

This news follows last week’s pressure from Dutch pension giant ABP which, representing a powerful investor group of several pension funds, said it was considering voting against the appointment of beleaguered ABN Amro chairman Rijkman Groenink onto Shell’s supervisory board.

“The reason for his decision is that he wants to fully dedicate his attention to ABN Amro, given the current corporate activities around the company,” a statement on Shell’s website said.

ABP-spokesman Thijs Steger told IPE this morning his fund welcomes Groenink’s decision.

“Rijkman Groenink’s decision to withdraw means that he can focus for 100% on ABN Amro. We find this a big plus,” said Steger.

“For us, [Groenink’s attention on ABN Amro] was an important argument in the consideration of voting for or against his appointment at Shell.