Executive pay at Royal Dutch Shell: Muck, brass and spleen
An oil giant’s shareholders flex their muscles
MOST firms’ annual general meetings (AGMs) owe more to North Korea than ancient Greece. By long-standing tradition, bosses make platitudinous speeches, listen to lone dissidents with the air of psychiatric nurses towards patients and wait for their own proposals to be rubber-stamped by the proxy votes of obedient institutional investors. According to Manifest, a shareholder-advice firm, 97% of votes cast across Europe last year backed management.
So should corporate democrats be cheered by the rebellion over pay at Royal Dutch Shell? At the oil giant’s AGM on May 19th, 59% of voting shareholders sided against pay packages for top executives. In particular they disliked €4.2m ($5.8m) in shares dished out to five executives, which comprised about 12% of their total pay for 2008. Under the firm’s rules, such awards should be granted only if Shell’s total return in the year is in the top three of its peer group. In 2007 and 2008, Shell came a very close fourth, so the firm decided to pay out anyway. ...
