The pay of Shell’s CEO, Ben van Beurden, more than doubled in 2018 to hit €20.1m (£17.2m) as the oil company rewarded him for high profits.
The pay package was the largest in the company’s history, except 2014 when complex pension calculations inflated the chief executive’s reported salary.
It is only the second time a Shell chief executive’s salary, bonus and long-term incentive plan have cumulatively passed €15m.
Van Beurden’s pay was three times more than the average of his fellow FTSE 100 chief executives in 2017, and 143 times greater than the average pay of Shell’s British workforce. The company described the chief executive’s pay deal as “appropriate.”
For 2018, Van Beurden received €1.53m in base salary and benefits and an annual bonus of €3m. Benefits worth €32,000 may have included a car allowance, transport between his home and office, spouse travel and medical insurance.
However, the lion’s share of the payment came from a 2016 long-term incentive plan, which paid out €15.2m.
Luke Hildyard, director of the High Pay Centre, which campaigns on excessive executive pay, said: “It’s ludicrous to think that the Shell CEO wouldn’t have worked as hard or effectively without these vast incentive payments.
“These very large payouts are indicative of a flawed governance model and warped corporate culture that has made the UK one of the most unequal countries in western Europe. We don’t think remuneration committees are anywhere near brave enough in asking questions about whether such largesse is necessary or proportionate.”
Shareholders have also objected to Shell’s high pay in previous years, with significant shareholder rebellions.
More than a quarter of investors voted against Van Beurden’s pay package of €8.9m for 2017. Shareholder advisers had recommended a vote against because of missed sustainability targets and an accident in Pakistan that led to the deaths of 221 people.
Gerard Kleisterlee, chairman of Shell’s remuneration committee, said another accident in Pakistan in October 2018 would not be reflected in 2018 pay outcomes because it was not directly responsible.
Shareholders will have the chance to vote on the pay package on 21 May at Shell’s annual meeting, though they will not be able to cast a binding vote until 2020, when pay policy will be decided. Shell’s long-term bonus plans will include an “energy transition condition” from 2019 onwards that will account for 10% of the award.
Kleisterlee wrote that the remuneration committee had rewarded Van Beurden in part for “framing a methodology for aligning with the Paris agreement”, which envisages net zero carbon emissions in the second half of the century. Shell has plans to cut its net carbon footprint by a fifth by 2035.
At the same time, the remuneration committee highlighted Van Beurden’s role in completing the £47bn merger with the oil and gas exploration company BG Group, as well as new investments in deepwater oil drilling in the Gulf of Mexico.