Houston Chronicle: Shell proposes dropping stock options for executives: “Shell has been under heavy scrutiny since it admitted last year it had overstated its proven oil reserves and reduced the figure several times”: “The oil reserves scandal cost the company almost $150 million in fines imposed by U.S. and British regulators and led to the sacking of three senior executives.” (ShellNews.net) 17 March 05
Associated Press
March 17, 2005,
LONDON — The Royal Dutch/Shell Group of Cos. proposed tightening compensation policies for its executives today, saying it wanted to end the use of stock option grants.
Shell said its new payment proposal, which must be approved by stockholders, would make the awarding of share bonuses to its directors dependent on the company's performance. Shell has been under heavy scrutiny since it admitted last year it had overstated its proven oil reserves and reduced the figure several times.
"These proposals are designed to reward performance that enhances the value of the group, and we believe they will serve shareholders well," said Aarnout Loudon, chairman of the committee that made the recommendations.
The plan would make bonus payments contingent on the performance of the Anglo-Dutch group's shares compared to those of other major oil companies. Executives' performance would be evaluated over a three-year period, the company said.
Shell also said the proposal would require executive directors to invest between 25 percent and 50 percent of their annual cash bonus in shares.
The company said the new plan would not lead to an increase in the directors' pay. Full details will be published in Shell's annual report in May.
Shell shares fell 1 percent Thursday to 4.84 pounds ($9.33) on the London Stock Exchange, while Royal Dutch shares dropped 0.5 percent to 46.39 euros ($62.27) on the Euronext exchange.
In February, the company announced that it had more than doubled its fourth-quarter income on the back of soaring oil and gas prices, but also that it was cutting oil reserves for the fifth time in just over a year.
The oil reserves scandal cost the company almost $150 million in fines imposed by U.S. and British regulators and led to the sacking of three senior executives.
http://www.chron.com/cs/CDA/ssistory.mpl/business/3089984
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