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The Independent: Watts may lose his Shell pension

 

By Tim Webb

14 March 2004

 

Shell is considering withholding an 8m pension and more than three million share options from former chairman Sir Philip Watts. Sir Philip, who was sacked earlier this month, might not receive any pay-off at all from the company.

 

Shell is being investigated by the US regulator, the Securities and Exchange Commission, after he reclassified a fifth of its "pro-ven" reserves as "probable". The overbooking of reserves took place between 1996 and 2002, mostly when Sir Philip was head of exploration and production.

 

Normally, he would be entitled to a minimum of three months' pay if he had resigned, which would amount to 186,000 based on his 2002 salary. But a source close to the company said: "These are not normal circumstances. He did not give his notice. He did not resign. The boards will decide what - if anything - he will get."

 

This week Shell will publish its annual report for 2003. Including bonuses, Sir Philip could earn almost 2m if the remuneration committee's performance targets are met.

 

Lawyers also said that if the SEC decides that Sir Philip knowingly mis-stated Shell's reserves, the company could sue him and demand repayment of previously paid bonuses. Between 1996 and 2002, Sir Philip received over 2.6m in performance-related bonuses and realised share options.

 

John Reed, partner at US corporate law firm Duane Morris, said: "If the SEC determines that Sir Philip knowingly mis-stated Shell's reserves, Shell could take steps to recover any of his performance-related bonuses, which were boosted by the reserve mis-statements and corresponding artificial inflation of the share price."

 

http://news.independent.co.uk/business/news/story.jsp?story=500897


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