The Independent: Michael Harrison's Outlook: Money talks for Shell's singing director: “Shell is hardly a byword for good corporate governance, and yesterday it lived up to its reputation by producing another stonker” (ShellNews.net)
13 August 2004
Shell is hardly a byword for good corporate governance, and yesterday it lived up to its reputation by producing another stonker of a pay-off for one of the directors caught up in its reserves reporting scandal.
On this occasion, however, there is a twist in the tail. Walter van de Vijver is going to have to sing for his severance. In order to qualify for his full £2.5m package, the company's former head of exploration and production will have to co-operate with the "relevant authorities" as they conduct their various criminal inquiries into how Shell came to invent quite so many non-existent barrels.
Mr van de Vijver should have no problem in turning Queen's evidence. He has already protested his innocence from the rooftops and those famous emails complaining about being "sick and tired of lying" over the true state Shell's reserves suggest that, at the very least, he was indeed a reluctant accomplice.
The pay-off is two and a half times what his former chairman Sir Phil Watts got for walking the plank as well, which only goes to show that it pays to be Dutch if you are about to suffer a sudden loss of confidence among the rest of the board.
In addition to the £2.5m severance package, Mr van de Vijver can also start to collect a £258,000 pension when he reaches 60 and gets to keep 271,500 options, which may even be worth something one day. No wonder he could afford to forfeit his performance shares.
Things aren't looking quite so rosy for Sir Philip despite his own £1m severance deal. He has maintained a Trappist vow of silence since the day he was frogmarched out of Shell Centre but then he wasn't offered the same kind of plea-bargain deal as his former colleague appears to have got. The company's own report into the scandal was about as damning of the former chairman's behaviour as it was possible to be and now it looks like Sir Philip's former colleague is going to stitch him up like a kipper by singing to the authorities.
As usual, Shell is unable to cast any light in the darkness as to why the two men's severance arrangements are so different in size and nature. Perish the thought that one of them is being paid to grass up the other.