DAILY TELEGRAPH (UK): Shell bosses face shares shake-up (ShellNews.net) 18 March 05

By Aaron Patrick (Filed: 18/03/2005)

Shell plans to stop issuing share options to its top executives, including CEO Jeroen van der Veer, and judge their performance against the "big five" energy companies. 

The oil producer yesterday announced it would seek shareholder approval for an overhaul of executive director payments, and promised it would not increase their overall compensation.

Instead of receiving share options, which can be worthless if the share price falls, Shell's five executive directors will be given ordinary shares.

The number of shares will be determined by how Shell performs compared with its main competitors, Exxon, Total, Chevron, Texaco and BP.

If Shell's shares and dividends produce a better return than all its competitors over at least three years, the executives will receive twice as many shares as they would otherwise. If Shell is ranked fourth or fifth, they will receive none.

The new share plan is similar to the present scheme, except that the company will no longer compare its performance to the thirty largest companies on the London and Amsterdam stock exchanges.

One of Britain's larger pension funds, Hermes, said the principle of peer-comparison was sound, but it would want to discuss the detail with Shell before passing judgment.

Shell's move follows the decision by BP two months ago to replace share options for executive directors with restricted shares.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/03/18/cnshell18.xml 

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