The Wall Street Journal: Ousted Shell Executives Won't Get 2003 Bonuses

Associated Press

May 28, 2004 12:10 p.m.

Posted 29 May 04

LONDON -- None of the Royal Dutch/Shell Group senior executives ousted after a furor over oil reserves will receive annual bonuses for 2003, the Anglo-Dutch conglomerate said in its annual report.

Former Chairman Sir Philip Watts received his annual salary of £865,000 ($1.56 million or €1.27 million) last year, the report said. But the Shell remuneration committee decided Mr. Watts should miss out on an annual bonus -- typically worth the same as his yearly pay. It also said he wasn't entitled to 50% of stock options granted in 2001 as the company hadn't met performance targets.

Shell's failure to outperform rivals such as BP PLC and ChevronTexaco Corp. also meant that Mr. Watt missed out on shares worth £1.7 million under the group's incentive plan.

Shell stunned investors by announcing in January that its confirmed oil and gas holdings were 20%, or 3.9 billion barrels, smaller than it had claimed. That led to the resignations of Mr. Watts, head of exploration and production Walter van de Vijver and finance chief Judith Boynton.

On Monday, Shell announced it was downgrading the size of its oil reserves for the fourth time this year, bringing the total discounted amount to 4.47 billion barrels. Reserves are an oil company's most valuable asset, and any reclassification into less-certain categories is a serious concern for investors.

Last month, Shell published an external investigator's report that revealed dishonesty at the highest levels of the company and showed that some bosses knew for almost two years the company had publicly overstated its reserves.

The company has said it is continuing negotiations with the U.S. Securities and Exchange Commission, which has been investigating its restatements. It is also being pursued by European regulators and may face lawsuits from investors.

Friday's annual report showed that Mr. Van de Vijver was paid £842,000 last year, but he received no bonus for his work in 2003. Ms. Boynton was paid her annual salary of £382,000.

The annual report didn't carry details of possible severance payments to the ousted executives. A company spokesman said talks on the matter are continuing.

Shell also said that none of the current management team, including new chairman Jeroen van der Veer, will receive annual bonuses for 2003.

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