The FTSE-100 oil giant Shell is close to unveiling a revamped boardroom pay policy which would see its boss handed a multimillion pound annual pay incentive.
Sky News has learnt that Shell has concluded a consultation with its largest shareholders which could result in Wael Sawan, chief executive, earning at least £4.5m more every year.
Investor sources said that Shell, which will report fourth-quarter and full-year results on Thursday, had drawn up plans to grant Mr Sawan a long-term incentive stock award worth up to nine times his base salary of £1.535m.
That would be a 50pc increase on the current remuneration policy, under which the Shell chief is eligible for an LTIP award of up to six times his salary.
Although the target award is significantly lower, in years of significant outperformance it would mean Mr Sawan being handed an annual long-term stock award worth £13.815m – assuming his salary remains fixed at the current level.
In addition to an annual bonus worth up to £3.837m, or 250pc of his salary, that would make his total pay package, excluding pension contributions, worth up to £19.2m.
That would continue to rank among the largest such pay deals for a FTSE-100, although as a constant fixture among the London stock market’s biggest companies, institutional shareholders are generally said to have expressed support for the move.
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One said they backed the Shell board’s move so long as there was “clear evidence of pay for performance”.
Shell’s pay policy revamp comes during a period when FTSE-100 boards are seeking permission to elevate their CEOs’ pay amid concerns that they risk losing executives to US-based rivals.
There have also been a string of companies, led by the gambling group Flutter Entertainment, which have shifted their primary listings to New York with the objective of attaining a higher valuation.
This week, shares in AstraZeneca, the drugs giant, began trading in the US.
Sky News recently revealed plans drawn up by Rolls-Royce to significantly increase chief executive Tufan Erginbilgic’s potential pay package after overseeing a stellar turnaround of the aircraft engine maker.
Shell has a market value of just over £158bn, which is still significantly smaller than American peers ExxonMobil and Chevron.
Last year, Mr Sawan was paid £8.6m, while chief financial officer Sinead Gorman received a package worth £7.25m.
On Wednesday, Shell’s London-listed shares were trading at around 2833p.
They are up about 6pc over the last year.
In June, the company denied a Wall Street Journal report that it was in talks to buy troubled British rival BP, with Mr Sawan having said he saw greater value in buying back his own company’s stock.
In response to an enquiry from Sky News, a Shell spokesperson said: “Every three years, Shell seeks shareholder approval for a new Executive Director remuneration policy as a standard part of regulations for UK-listed companies.
“The last vote was in 2023, so this is part of the usual cycle.”
The company declined to comment on the specific details of its new pay policy.
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One source said the new plans would be set out in its annual report next month.
