The Herald: Watts walks off with £1m at Shell
KARL WEST May 24 2004
SIR Philip Watts, the disgraced former chairman of oil major Shell, has been awarded a golden farewell pay-off of just under £1m, according to reports.
Watts, who was sacked by the oil giant in March for his part in the massive overstatement of Shell's proven oil reserves by 4.35 billion barrels of oil, was on only three months' notice – like all other Shell directors.
However, the board felt the payment was necessary in recognition of his 34 years of service, according to the Sunday Telegraph.
The newspaper reported one Shell director saying: "The norm is that you get a year when you retire. Some of us felt that was too much and that he should sue us if he wanted more. But that is not the Shell way."
Watts was asked to quit the group after an internal investigation discovered he had known about Shell's huge overbooking of its proven oil and gas reserves – oil still in the ground.
The £1m payment is still less than Watts's £1.8m salary and bonus for 2002. It is thought he received no bonus for last year, but he will, however, be able to draw an annual pension of £500,000. His payoff will be disclosed in Shell's annual report, which is due to be published on Thursday.
Watts's part in the deception and attempted cover-up of the overbooking is almost certain to lead to a barrage of legal actions against Shell, the UK's seventh-largest public company and the world's third-biggest oil company, from investors who believe they have lost billions as a result of the plummeting share price since the overstating of oil came to light in January.
There is also a possibility criminal charges will be brought against executives by US financial authorities.
The depth of the deception came to light in an internal report in which Walter Van de Vijver, Shell's former chief executive of development and production, wrote to Watts in e-mails that he was "becoming sick and tired about lying about the extent of our reserves issues".