Shell stirs the pay pot with 126 per cent rise for its CEO

There’s something almost comfortingly familiar about the fuss over Ben van Beurden’s pay package, and the chances are we’ll be talking about another bumper package next year whatever mess our politicians make

Shell CEO Ben van Beurden enjoyed a 126 per cent pay rise last year (Reuters)

At a time when our nation is wracked with crisis and run by a malign government of self-serving incompetents, here’s Shell with something that’s comfortingly familiar: a good old-fashioned story of executive greed.

The oil major has just published its annual report which reveals that Ben van Beurden took home €20m (£17m) in pay and bonuses last year. That represented a 126 per cent rise over the previous year, and 143 times what the average employee received.

It was a good one for the company, it’s true.

Underlying profits increased by a third, to £16.3bn, their highest level since 2014. The company took a disciplined approach to costs, which I suppose Mr van Burden can take part of the credit for, although business is a team sport so it wasn’t just down to him.

But Shell was also helped by a recovery in the oil price and oil CEOs have about as much control over that as they do over the price of chewing gum. They just get paid like they do.

Some more of that comforting familiarity could be found in the company’s attempt to justify the unjustifiable. Apparently the package is “consistent” with what’s found in the upper reaches of the FTSE 100, which amounts to saying well they’re all at it so we might as well join in.

But wait, there’s more. Apparently Shell believes in reward packages that are “externally competitive and internally proportionate, meaning the chief executive is the employee with the highest proportion of variable pay as he has the highest level of responsibility”.

Translating the corporate gobbledygook, what they’re saying is that the CEO is the top guy and because of that his pay will vary so that he gets more when he does a stand-up job, or when the oil price goes up, or when the price of chewing gum goes up.

Thing is, the statement implies that when things don’t go so well, he’ll pay a price. And yes, he got a lot less the previous year. But he still pocketed a cool €9m, which is still an absurd amount of money to pay someone in any year, let alone a less than stellar one in which a tanker run by a sub-contractor in Pakistan exploded and killed more than 200 people.

Shell’s big shareholders kicked up a modest fuss, with more than one in four voting against the remuneration report last year. The company said it was “sensitive” to their views, but, well, blah blah blah, and look we’ve linked some of his money to climate change targets, so we aren’t all bad!

This time next year the UK’s economy might have collapsed, we might have an even worse prime minister than the lemon we have now (remember Boris Johnson is still angling for the job), we might have had a general election or two or three.

But Shell will still hand another ridiculous sum to its CEO and its remuneration committee will come up with a mealy mouthed justification for it. Some of its shareholders will say they’re a bit cross but not enough to actually do anything meaningful to address the issue. So we’ll at least have something to cling on to when everything else is crashing down around our ears.