Shell slammed for ‘outrageous’ pay and bonuses package of up to £21m for ex-boss
Shell has fuelled calls for a higher windfall tax on the sector after the oil giant revealed that its ex-boss saw his pay package soar to £9.7 million last year and is in line for further potential payouts of more than £11 million.
The company’s annual report showed that former chief executive’s Ben van Beurden’s pay jumped by 53% in 2022, including a £2.6 million annual bonus and a £4.9 million long-term shares award on top of his £1.4 million annual salary.
Mr van Beurden – who was replaced by Wael Sawan at the start of 2023 – is also set to pick up another £2.13 million this year for advisory work and loss of office, plus a maximum possible £1.8 million pro-rata bonus dependent on company performance, as well as a potential £7.4 million in long-term awards for 2021 and 2022 share plans.
It comes after the oil giant posted a record 84.3 billion US dollars (£71.1 billion) in core profit for 2022 as it benefited from soaring energy prices, branded “obscene” at the time amid heavy criticism over the amount of tax paid by the group.
Liberal Democrat leader Sir Ed Davey condemned the pay package as “outrageous” and called for an increase in windfall taxes on the sector.
He said: “It is outrageous that oil and gas bosses are raking in millions in bonuses while families struggle to heat their homes.
“Rishi Sunak’s refusal to properly tax these eye-watering bonuses and record profits is mind-boggling and shows how out of touch he is.
“It is completely unfair at a time when the Conservative Government is choosing to put people’s energy bills up.
“Whether it is executive bonuses or soaring profits, the money being made out of (Russian President Vladimir) Putin’s illegal war should be helping struggling families, not oil and gas barons.”
Non-governmental organisation (NGO) Global Witness said Mr van Beurden’s 2022 pay package is 294 times the UK’s median salary of £33,000.
Alice Harrison, fossil fuels campaign leader at Global Witness, said: “Shell’s CEO earnt in one year what a typical UK worker would earn in six lifetimes.”
“It’s a sign of just how broken our energy system is,” she added.
The NGO is urging the Government to change the windfall tax on the oil and gas sector to also cover executive bonuses.
“We’re calling on the UK Government to implement a people-first windfall tax in next week’s Spring Budget which includes executive bonuses, and to ensure a rapid transition to homegrown renewable energy sources that are cleaner and cheaper than oil and gas, and better for energy security,” Ms Harrison said.
BP is also expected to publish its annual report on Friday, which is set to reveal multimillion-pound bonuses for its boss, Bernard Looney.
The spotlight has been thrown on energy firms after a record-breaking set of annual results from the sector, which stoked controversy given the cost-of-living crisis affecting firms and businesses.
A spokesman for Shell said the former chief executive’s pay package is “considered the appropriate quantum for running a group of Shell’s scale and complexity”.
He said: “The CEO’s remuneration package is reviewed carefully on an annual basis against a range of UK and international companies, to ensure reward packages are appropriately positioned against market.”
He added: “We fully appreciate the difficulties that the cost-of-living crisis is causing many people across the world.
“Shell are taking steps to address it, such as doubling the hardship fund for vulnerable customers of our UK retail energy business.”
The group’s annual report also showed that Mr Sawan – Shell’s former head of gas and renewables – was appointed on a £1.4 million annual salary, in line with his predecessor, plus a potential annual bonus worth £1.75 million, or 125% of salary, and long-term shares worth up to a maximum potential of £4.2 million, or 300% of salary.