The Sunday Telegraph: Shell gives Watts a £1m golden farewell

By Sylvia Pfeifer and Robert Peston (Filed: 23/05/2004)

Sir Philip Watts, the disgraced former chairman of Royal Dutch/Shell who was sacked by the oil giant in March, has received a payoff of just under £1m. 

Like all Shell directors, Watts was on only three months' notice, but the board felt the payoff should recognise his long service. One director said: "The norm is that you get a year when you retire. Some of us felt that was too much and that he should sue us if he wanted more. But that is not the Shell way."

Watts, who joined the oil group in 1969, was asked to resign after an internal investigation found that he had known about Shell's massive overbooking of its proven oil and gas reserves.

The company is under investigation in the US for allegedly misleading the stock market by both the Securities and Exchange Commission and the Department of Justice.

The £1m is still less than Watts's £1.8m salary and bonus for 2002. It is understood that Watts has received no bonus for last year. He will, however, be able to draw an annual pension of £500,000. He also has some 2m Shell shares under option, although the price of buying 1.7m of them is higher than the current share price of 392p.

The payoff will be disclosed in Shell's annual report, which is due to be published on Thursday. It comes as Watts's successor, Jeroen van der Veer, prepares to meet City investors ahead of the company's annual meeting on June 28 and assure them that the company recognises the need to change its management structures.

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