Shell’s executive pay and carbon reduction targets

Shell’s new chief got a pay package of around £8m in his first year in the role, the energy giant has announced.

Executive Pay Details:

Wael Sawan, the CEO of Shell, received a total pay package of £7.94 million in 2022, including bonuses. Although this amount was lower than his predecessor’s pay of £9.7 million in 2022, it still drew criticism from pressure groups.

Criticism from Pressure Groups:

Jonathan Noronha-Gant from Global Witness criticized the size of Sawan’s pay package, describing it as “a bitter pill to swallow for the millions of workers living with the high costs of energy.”

Changes in Carbon Reduction Targets:

Shell announced changes to its carbon reduction targets, including:

• Reducing the “net carbon intensity” of the energy it sells by 15-20% by 2030, compared to the previous target of 20%.
• Dropping the plan to reduce net carbon intensity by 45% by 2035 due to uncertainty in the energy transition pace.

Shift in Focus:

Shell stated its intention to prioritize “value over volume” and focus on selling electricity to business customers rather than households. Additionally, it set a new goal to reduce customer emissions from the use of oil products by 15-20% by 2030.

Comparison with BP:

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BP, a rival energy giant, also scaled back its carbon emission reduction plans. Its CEO, Murray Auchincloss, received a pay packet of over £8 million last year.

Scrutiny on Executive Pay:

The size of pay packages at energy firms, including Shell and BP, has faced scrutiny, especially after these companies witnessed significant profits following the surge in oil and gas prices due to Russia’s invasion of Ukraine.

Calls for Reform:

Andrew Speke from the High Pay Centre criticized Shell for prioritizing executive enrichment over addressing excessive executive pay. He emphasized the need for reforms in company law to compel companies like Shell to tackle excessive executive pay.