expatica.com: Shell stock options for executives: “Shell, the third largest oil and energy group, had an "annus horribilis" in 2004 as it was forced to downgrade its estimate of oil reserves on several occasions. The scandal cost chairman Sir Philip Watts and other executives their jobs.” (ShellNews.net) Posted 18 March 05
AMSTERDAM — Anglo-Dutch oil giant Royal Dutch/Shell announced plans on Thursday to tighten up its remuneration policies for executives.
Shell, the third largest oil and energy group, had an "annus horribilis" in 2004 as it was forced to downgrade its estimate of oil reserves on several occasions. The scandal cost chairman Sir Philip Watts and other executives their jobs.
To regain investor confidence, Shell has already announced it will abolish its Dutch and British dual-company structure in favour of a unified board, based in The Hague.
On Thursday, the firm said it had decided to end stock option grants to executives.
Incentive plans for executives and its deferred bonus plan will also be altered to introduce long-term performance conditions, Shell said.
In reality, this means an executive's bonuses will be tied to how well the firm does in competition against its rivals, market leader ExxonMobil, BP and ChevronTexaco.
News agency Reuters reported that "if Shell comes fourth or fifth in this group in terms of its total shareholder return, executives will not get any bonus shares under the long-term incentive plan and will not qualify for extra shares in the deferred bonus plan".
This is one of the key recommendations made by a special review committee established after the company's turbulent experience last year.
The committee is to put forward these recommendations for shareholder approval at the annual general meeting on 28 June.
Shell shocked investors in January 2004 when it slashed its proven oil and gas reserves by 20 percent. The scandal sent its stock plummeting and led to the sacking of several top directors.
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