Shell boss bags 26% leap in annual pay package after COVID oil price recovery

The chief executive of Shell’s pay package rose by 26% to €7.4bn (£6.2m) last year amid a recovery in oil prices from COVID crisis lows, according to the company’s annual report.

Ben van Beurden enjoyed the first increase in total awards since 2018 – a year when he took home €20m.

The 2021 package included a €2.6m annual bonus on top of his €2m salary. The rest comprised of long-term incentive payments.

The report showed that Mr van Beurden’s package was 57 times more than the median Shell worker received.

Last year saw oil prices climb steadily – recovering from a pandemic-induced collapse in demand that forced Shell to cut its dividend for the first time since World War Two after recording a $19.9bn loss.

Brent crude, for example, started 2021 at around the $50 per barrel level and ended the year at $80. Natural gas costs also surged ahead of winter amid tight European supplies.

It was revealed last month that the improved price picture helped Shell to annual profits of $17bn.

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Neil Carson, who chairs the company’s pay-setting committee, told investors the awards reflected “a year of impressive financial performance and strong strategic progress” and an acceleration in Shell’s transition towards a net zero-emissions business.

The current year may also prove fruitful, thanks to further increases in energy prices as a result of Russia’s invasion of Ukraine at the end of last month.

It has sent Brent crude costs rocketing to $139 a barrel – the highest level for 14 years.

However, Shell is also facing the prospect of billions in losses from its decision to exit Russia as a result of president Putin’s war.

The company revealed on Tuesday it would stop “all involvement” with the country’s oil, gas and other hydrocarbon products.

That was on top of its decision the previous week that it intended to end its involvement in the Nord Stream 2 pipeline project and exit its equity partnerships with Gazprom, including its 27.5 % stake in the Sakhalin-II liquefied natural gas facility.

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Shell’s decision to have the UK as its sole headquarters has also forced Mr van Beurden to make the decision to move to London, where he and the remuneration committee are facing increased pressure over the size of future awards.

Bank of England governor Andrew Bailey urged companies last month to exercise restraint in setting future pay levels across the board, fearing inflation-busting increases will add to the existing inflation problem in the months ahead.

The energy-led surge in the headline measure – already at its highest level for almost 30 years – is tipped to spiral further following the most recent increases in oil and other commodity costs related to the war.

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