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Shell and BP under fire on boardroom pay policies

Shell and BP under fire on boardroom pay policies

MARK WILLIAMSON: 10 May 2017

CAMPAIGNING group ShareAction has called on shareholders in Royal Dutch Shell and BP to vote down the oil and gas giants’ boardroom pay policies, which it says reward environmentally risky high-carbon strategies.

ShareAction said the remuneration policies of both groups were ‘misaligned with the interests of long-term shareholders’ as they did not do enough to encourage the firms to respond to the move to a low carbon economy.

“A cocktail of policy, technology and market-driven factors are brewing up a storm of uncertainty over the future of fossil fuels. To encourage oil executives to focus on ‘business as usual’ seems an imprudent approach to remuneration,” said Juliet Phillips, campaigns manager at ShareAction.

The organization complained that Shell’s bonus calculations were heavily weighted to the delivery of oil and gas projects and did little to encourage the firm to respond to increases in demand for low-carbon energies.

It said BP had gone further than Shell to remove volume related incentives but had not set clear timelines or milestones for transitioning to a low-carbon business model.

ShareAction has shared its concerns with shareholders in both companies. It has helped pension savers to write to their funds about voting down the pay policies.

A BP spokesperson said: it had worked closely with major shareholders to develop a new remuneration policy that will be presented at the 2017 AGM, adding: “We are pleased to see that the three largest proxy advisors have all reacted positively to the new policy.”

A Shell spokesperson said it had no comment to make on ShareAction’s claims.

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