Daily Telegraph: Watts' pension pot tops £10m
By David Litterick
Former Shell chairman Sir Philip Watts will retire on an annual pension of £568,000 after seeing his salary increase by 13pc last year, it emerged yesterday.
The oil giant's annual report shows that Sir Philip's pension pot is now worth more than £10m - a 25pc increase on last year.
The £88,000 increase in his pension entitlement comes after Sir Philip saw his annual salary boosted from £746,000 in 2002 to £843,000 in 2003. Under the group's final salary pension scheme, his pension is also increased for every year he served.
The Shell chairman quit in March after the company was forced to downgrade the level of its reserves by 20pc. It has been forced into three further downgrades since then.
The company stressed yesterday that neither Sir Philip, nor any other senior executives, received a bonus in 2003. For Sir Philip the bonus was typically worth the same as his yearly pay. The Shell remuneration committee also decided that he was not entitled to 50pc of stock options granted in 2001 as the company had not met performance targets.
Shell's failure to outperform rivals such as BP and ChevronTexaco meant Sir Philip also missed out on shares worth £1.7m under the group's long-term incentive plan.
The annual reports were due to be published earlier this year but were delayed in the wake of revelations that it had overbooked its oil and gas stocks.
Shell stunned the market in January by saying its reserves were 20pc lower than previously thought and made three further downgrades in the months that followed.
An independent report in April severely censured Sir Philip and head of exploration and production Walter van de Vijver for appearing to know reserves did not meet market rules as far back as 2001.
Mr van der Vijver was paid £842,000 but received no bonus for his work in 2003 prior to his departure in March.
Finance chief Judy Boynton, who became the third boardroom casualty, picked up her annual salary of £382,000.
The annual reports did not carry details of possible severance payments to the executives who quit as the reserves crisis unfolded. A company spokesman said talks with the individuals were continuing.
Shell also revealed that none of the current management team, including new chairman Jeroen van der Veer, will receive annual bonuses for 2003.
The company is set to review its remuneration policies in the coming year.