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MarkerWatch: UK pension group oppose Shell pay over lack of safety targets

By Benoit Faucon
Last Update: 9:02 PM ET Apr 29, 2007

LONDON (MarketWatch) — The U.K.’s Local Authority Pension Fund Forum Monday urged its members to vote against Royal Dutch Shell PLC’s remuneration report at its May 15 shareholders meeting over what it said was a lack of health and safety targets in executive pay.

The remuneration report contains both the pay awarded to executive and the policies set to decide them.

The LAPFF, whose members own over 1% of Shell shares, said it “believes the company should link management of non-financial issues such as health and safety to its long-term incentive plan.”

“Currently there is only linkage to the annual bonus and the sustainable development component of the bonus,” it added.

About 20% of the annual bonus is based on sustainable development, primarily based on number of reported cases of work-related injury, according to Shell’s annual report.

Although they have been less acute than at BP PLC some safety issues have been reported at Shell. The company was told in November to improve safety on its Clipper 48 natural gas platform in the U.K. North Sea. But the regulatory issue was formally closed in January.

The LAPFF also said it “is not convinced that Shell’s target (used to calculate bonus) to reduce emissions to 5% below 1990 levels by 2010 is adequate.” It called for “an adjustment of Shell’s target.”

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