Co-op slams Shell bosses’ pay

THE Co-operative Group’s investment arm is leading the charge against excessive pay at oil giant Shell, it emerged today.

Co-operative Asset Management has joined Standard Life Investments, another major institution, in voicing its disapproval of Shell’s decision to hand share awards to directors who missed key performance targets.

The Co-op has previously voted against Shell’s remuneration policy every year for the past three years.

The Co-op — whose Shell holding is among its biggest investments — also said that it would oppose the re-election of Lord Kerr of Kinlochard as a director because of Shell’s “persistent payment of inappropriate executive rewards”.

Lord Kerr sits on Shell’s remuneration committee and is the only relevant director standing for re-election this year.

Abigail Herron, corporate governance analyst at Co-operative Asset Management, told a national newspaper today: “Votes against remuneration reports have long been a way for shareholders to voice their concerns, but how long can you go for without it having an effect?

“It is now time for members of the remuneration committee to be called to account.”

Under a three-year incentive scheme agreed in 2005, directors, including Jeroen van der Veer, the group’s chief executive, could earn up to 200%  of their salary in stock, depending on where the group finished in a league table of it and some of its peers.

Shell finished in fourth position, behind BP, ExxonMobil and Chevron, meaning that directors should have failed to qualify for the awards.

However, because the difference between third and fourth position was marginal and directors had performed well using other criteria, Shell’s board exercised its discretion and decided to grant directors half of what they would have been entitled to had the group finished third.

Shell’s annual meeting will be held tomorrow.