The Times: Shell director who was 'tired of lying' given £2.5m payoff: “Shell investors lost 50p for every barrel that went missing while Phil and Walter together earned 80p for every barrel mislaid” (ShellNews.net)
August 13, 2004
By Carl Mortished, International Business Editor
THE Shell director who complained that he was “tired of lying” about the state of the company’s oil and gas reserves is to be paid £2.5 million in compensation for losing his job as head of oil exploration in the Anglo-Dutch multinational.
Walter van de Vijver’s settlement eclipses the £1 million paid to Sir Philip Watts, Shell’s former chairman, who, together with Mr Van de Vijver, was removed from office in March for the pair’s role in the misreporting of Shell’s oil and gas reserves.
Mr Van de Vijver will receive half of the €3.8 million (£2.54 million) settlement immediately, but the remainder is being kept in escrow “subject to continuing co-operation with, and review by, relevant authorities”. In addition, the former Shell director will receive an annual pension of €385,388 from June 2015.
The payoff will anger Shell’s private shareholders. In June, investors at Shell’s annual meeting in London protested against the severance payment to Sir Philip.
The US Department of Justice is still investigating the misreporting of 4.4 billion barrels of oil and gas, a fifth of the company’s reserves. In July, the company settled matters with the US Securities and Exchange Commission and Britain’s Financial Services Authority, agreeing to pay fines of $120 million and £17 million, respectively, without any admission of charges of market abuse and breach of securities laws. It is not known whether Mr Van de Vijver or Sir Philip will personally face charges.
The large discrepancy between Mr Van de Vijver’s compensation and the amount paid to his boss, Sir Philip, is not believed to relate to their behaviour in relation to the reserves scandal but to age and relevant employment law. Mr Van de Vijver was a director of Royal Dutch Petroleum, the Netherlands holding company, and Dutch employment protection tends to be stronger than that in Britain.
Whereas Sir Philip lost his job within two years of his expected retirement, Mr Van de Vijver was 48 and the £2.5 million settlement will cushion the consequences of loss of employment for 12 years.
Mr Van de Vijver, who joined Shell in 1979, emerges as the enfant terrible of the reserves scandal in a report by Davis Polk & Wardwell for Shell. In it, he is found railing and ranting against Sir Philip, the previous head of exploration, for leaving him with a oil and gas portfolio full of holes and in November last year he wrote in an e-mail to his boss saying: “I am becoming sick and tired about lying about the extent of our reserves issues and the downward revisions that need to be done.”
RESERVES LEGACY
The company “lost” 4.4 billion barrels
Shell Transport investors lost £2.2 billion*
Sir Philip gained £1 million on losing his job and Walter van der Vijver will pocket £2.5 million
Shell investors lost 50p for every barrel that went missing while Phil and Walter together earned 80p for every barrel mislaid
* fall in the market capitalisation of Shell Transport & Trading from January statement to yesterday.
http://business.timesonline.co.uk/article/0,,8209-1214507,00.html