Page last updated at 10:58 GMT, Tuesday, 9 June 2009 11:58 UK

Shell boss calls for pay reforms

Jeroen van der Veer
Mr van der Veer has raised a taboo among chief executives

The chief executive of Royal Dutch Shell has called for reform of how top executives are rewarded.

Jeroen van der Veer, who steps down this month, was the focus of a revolt over pay at the firm.

But he told the Financial Times that varying pay levels would not have affected his own performance.

"You have to realise: if I had been paid 50% more, I would not have done it better. If I had been paid 50% less, then I would not have done it worse."

UK banks were also given a warning over their executive pay by the shadow chancellor, George Osborne, in a speech to the Association of British Insurers on Tuesday.

"The banks should be using their profits to rebuild their balance sheets, not to hand out huge bonuses while the rest of the economy picks up the pieces for the follies of finance," he said.

'Heresy'

Last month, almost 60% of Shell shareholders voted against its executive pay plan which awarded bonuses despite missing targets.

It is clear to me that people are very concerned about executive remuneration
Jeroen van der Veer

Mr van der Veer received a 1.35m euros (£1.16m; $1.88m) bonus from a long-term incentive scheme.

BBC business editor Robert Peston said that the Shell boss's comments were "the worst possible heresy" among leaders of global firms.

"As it happens, Mr van der Veer hasn't returned the £1.2m that most shareholders feel he didn't properly earn. And some of them may be a touch bemused that he appears now to have conceded he didn't actually need several million other pounds that he received.

"But he has shone a light in the right place."

Shareholders rarely reject company remuneration reports but anger has mounted as share prices have tumbled.

Mr van der Veer added that firms must respond to rising concerns about the pay given to to executives.

"It is clear to me that people are very concerned about executive remuneration and good companies should take that on board," he said. Mr van de Veer will remain on Shell's board as a non-executive director.

Last month, Sir Peter Job, chairman of Shell's remuneration committee, said the company would take the outcome of the vote very seriously.

However, the vote was only advisory and was not binding.

Shell's incentive award targets are largely based on its performance against rivals BP, Chevron, ExxonMobil and France's Total.



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