The Guardian (UK): Shell boss gets £1m bonus despite crisis over reserves: “Jeroen van der Veer, the chief executive of Shell, took home a bonus of nearly £1m last year despite the reserves fiasco that made it the worst year ever for the company's reputation.”: “The SEC filing reveals that the Anglo-Dutch group's oil reserve replacement ratio was a dismal 19% last year…” (ShellNews.net) 1 April 05
Friday April 1, 2005
Jeroen van der Veer, the chief executive of Shell, took home a bonus of nearly £1m last year despite the reserves fiasco that made it the worst year ever for the company's reputation.
The €1.35m award is revealed in an official filing with the US securities and exchange commission, which also showed that Shell set aside $12m (£6.4m) for legal costs to defend sacked board members such as Sir Philip Watts.
The SEC filing reveals that the Anglo-Dutch group's oil reserve replacement ratio was a dismal 19% last year - by certain measurements - but just inside Shell's forecasts.
Mr Van der Veer, who took over from Sir Philip, received a deferred bonus in 2004 of €267,460 plus 150,000 stock options, which will crystallise over the next three years. His basic salary is €1.28m. The company declined to comment on the benefits.
Sources close to the company pointed out that it was a tough year but Shell ran up record profits of $18.2bn - restated in the SEC filing from an earlier figure of $18.5bn.
Mr Van der Veer's remuneration remains far behind his peers such as Lord Browne at BP but the Dutchman has received a 15% rise in basic salary to €1.5m for taking on the new title of chief executive.
The $12m pot for legal fees is apparently recoverable in the event of serious misconduct by the former officers. Both they and the company face court action from angry American investors over the reserves downgrades.
Shell said in its SEC filing that its proved reserves stood at 11.9bn barrels of oil equivalent (boe) at the end of 2004. That was equal to less than nine years' production at average 2004 rates, excluding the Athabasca oil sands reserves in Canada, which it put at 0.6bn boe.
While these figures are in the middle range of previous guidance, they will cement many investors' worries that Shell has lost its knack of finding oil. "The reserve replacement ratio, excluding the impact of divestments and year-end pricing and including associates, was 49%," it said.
Including the impact of divestments and year-end pricing, the ratio fell as low as 19%.
Shell, the world's third-largest oil group by market capitalisation, added that it continued to target at least a 100% replacement of its oil reserves from 2004 to 2008. Its shares fell 1p to 475p.
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