THE WALL STREET JOURNAL: Shell to Pay $4.6 Million In Severance, Pension To Ousted Executive: “The SEC still is investigating individuals involved in the overstatement.” (ShellNews.net)

By CHIP CUMMINS

Staff Reporter of THE WALL STREET JOURNAL

August 13, 2004; Page A6

LONDON -- Royal Dutch/Shell Group said it agreed to a €3.8 million ($4.6 million) severance payment for Walter van de Vijver, a senior executive ousted in March after the company acknowledged that it had overstated its energy reserves.

Shell said it will pay Mr. van de Vijver in installments, subject to continuing cooperation with various authorities still investigating the reserves overstatement. Shell said Mr. van de Vijver, its former head of exploration and production, was also entitled to a deferred annual pension of €385,388, beginning in 2015.

Shell's twin boards ousted Mr. van de Vijver along with Philip Watts, Shell's former chairman, in the wake of the company's disclosure that it overstated the amount of oil and natural gas the company holds in the ground. Those energy reserves are a key measure of an oil company's recent performance and future value.

The two men were blamed for the reserves overstatement in an internal Shell report partially disclosed in April. Shell previously disclosed a £1.06 million ($1.95 million or €1.6 million) lump-sum pay-out and a £584,070 annual pension for Sir Philip. Shell said that both severance deals were determined based on the number of years each executive had until retirement. Shell has yet to disclose a severance deal with Judy Boynton, who was demoted in April as chief financial officer but remains an adviser to Shell.

Mr. van de Vijver's attorney declined to comment on the severance agreement yesterday. In a letter issued by his attorney, Mr. van de Vijver defended his work at Shell. Sir Philip, through his attorney, has said he is confident he acted appropriately.

The reserves overstatements triggered U.S. and European probes and an investigation by the U.S. Department of Justice. Late last month, Shell said it had tentatively agreed to pay a $120 million penalty to the Securities and Exchange Commission to settle civil findings in the case, without admitting or denying the agency's conclusions. It also agreed to pay a £17 million fine to Britain's top financial regulator. The SEC still is investigating individuals involved in the overstatement.

Write to Chip Cummins at chip.cummins@wsj.com