Shell Approves Multimillion-Pound Raise for CEO Sawan
The FTSE-100 oil company Shell is poised to announce a significant overhaul of its executive compensation strategy. This updated pay policy could provide Chief Executive Officer Wael Sawan with an annual pay incentive exceeding £4.5 million. The change follows discussions with major shareholders and is intended to align rewards with company performance.
Proposed Pay Increase for CEO Sawan
Under the new structure, Sawan’s long-term incentive stock award could rise to nine times his base salary of £1.535 million. This represents a 50% increase compared to the existing arrangement, which allows for a long-term incentive payment of up to six times his salary.
Projected Total Compensation
- Base Salary: £1.535 million
- Potential Long-Term Incentive Stock Award: Up to £13.815 million (based on performance)
- Annual Bonus: Up to £3.837 million (250% of salary)
- Estimated Total Pay Package: Up to £19.2 million (excluding pension contributions)
This proposed total compensation stands out as one of the most substantial pay packages for a FTSE-100 CEO. While institutional shareholders generally support the revised policy, they emphasize the importance of “pay for performance” as a guiding principle.
Context of Executive Compensation in the FTSE-100
The move to enhance CEO pay comes at a time when other FTSE-100 firms are similarly aiming to increase their leaders’ compensation. Many companies, including Flutter Entertainment, are relocating their primary listings to the United States to achieve better market valuations.
Share Performance and Market Position
As of Wednesday, Shell’s shares were priced around 2833p, reflecting a 6% increase over the past year. The company holds a market valuation of approximately £158 billion, though it still trails behind American counterparts such as ExxonMobil and Chevron.
Recent Trends and Future Plans
During the last fiscal year, Sawan earned £8.6 million, while the Chief Financial Officer, Sinead Gorman, received £7.25 million. In response to recent inquiries, a Shell representative clarified that the company seeks shareholder approval for its executive pay policies every three years — a standard practice for UK-listed companies. Details of the new strategy are expected to be revealed in the upcoming annual report.
