Former Shell chief paid £22m over two years despite profit warning

Article by Terry Macalister published by TheGuardian.com Thursday 13 March 2014

Annual report reveals how Peter Voser made enormous gains through share awards and other performance-related bonuses

Former chief executive Peter Voser left Shell at the turn of the year. Photograph: Guido Benschop/AFP/Getty Images

Shell paid former chief executive Peter Voser £22m over two years even though there was a profit warning soon after he left and his successor says the business has failed to perform as strongly as it should have done.

The 2013 annual report published on Thursday shows that Voser, who left at the turn of the year, received total remuneration of just over £7m last year and almost £15m in 2012.

His basic salary was relatively modest by oil company standards – but he made enormous gains through share awards and other performance-related bonuses accumulated over a number of years but paid out in 2012 and 2013.

Yet his successor, Ben van Beurden, who took over at the start of this year, said in a management briefing paper prepared for stock market analysts that it was clear “we need to get a tighter grip on performance management in Shell”.

He has previously signalled he planned to take the axe to spending and possibly sell off some of Voser’s signature – but high cost – projects in the US shale lands, the Niger Delta and possibly even the Arctic.

In a written statement, he said US exploration and development would be cut by 20%. He gave few other details but rather presented a broad overview of strategy.

“With sharper accountability in the company, this approach will target growth investment more effectively, focus on areas of the business where performance improvement is most required, and drive asset sales from non-strategic positions,” he argued.

Shell had already sold off $4.5bn (£2.7bn) worth of assets in the first two and a half months of this year and was still aiming to dispose of $15bn worth of interests between now and the end of 2015, he said.

Among the properties exited so far are a liquefied natural gas project in Australia, a gas-to-liquid scheme in the US and other operations in Italy. Plans to sell off shale assets in America are proving more difficult that the company would like, industry analysts said.

Van Beurden said Shell would maintaining its existing cash “engines” in the exploration and development business which are delivering high returns and strong cash flow. It would also continue with “growth priorities” – deep-water and integrated gas while identifying “future opportunities” for the longer term, including Nigeria, Iraq and Kazakhstan.

But the City seemed disappointed by the lack of detail in the management statement and shares drifted down 14.5p to £21.76½ in early trading.

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