Financial Times: Dutch regulator exempts Shell pay packages

By Clay Harris, Carola Hoyos and Ian Bickerton

Published: May 16 2004  

Posted 17 May 04

The Dutch regulator investigating the Royal Dutch/Shell reserves crisis said on Sunday night that performance-related packages granted to Jeroen van der Veer, chairman of its management committee, and another senior executive were exempt from its registration rules.

The Netherlands Authority for the Financial Markets (AFM) said that after "careful consideration this weekend" it had decided that the packages had been "granted under specific conditions to be met in the future" and did not need to be registered.

The decision reverses indications given by the regulator on Friday, when Werner van Bastelaar of AFM said: "We are of the opinion that bonus packages should be registered with us. We are examining the facts carefully."

Sjoerd Eisma, a Royal Dutch/Shell legal adviser, however, had said it was his view that there was "no legal obligation for Shell or the beneficiary to make any announcement to the Dutch regulator at this time."

"It is Dutch law that if the award is made under suspensive conditions (where the effect of the award is suspended until the condition is satisfied), the obligation to inform the regulator arises on the satisfaction of the condition."

The AFM's statement suggests that it now agrees with Shell's reading. Under the packages for Mr van der Veer and Rob Routs, chief executive of fuel refining and marketing, long-term incentive bonuses would be paid out after three years and only if Shell's shareholder return beats its closest peers, a condition that has not yet been met.

Shell had disclosed options in shares of Royal Dutch granted to Mr van der Veer and Mr Routs. It had had also disclosed to the London Stock Exchange options and long-term incentive bonus of shares in the UK arm for Malcolm Brinded, head of exploration and production.