UK - The Local Authority Pension Fund Forum (LAPFF) has urged members to vote against Royal Dutch Shell's remuneration report amid health and safety concerns.
Royal Dutch Shell is due to hold its annual general meeting on May 15, but the £75bn LAPFF, whose members own over 1% of shares in Royal Dutch Shell, has recommended an opposing vote.
In the forum’s view, Royal Dutch Shell has failed to link directors’ management of non-financial issues such as health and safety with long term pay awards.
Currently, the LAPFF said there was only linkage to the annual bonus and the sustainable development component of the bonus, which covered a range of non-financial factors including safety, represented a maximum of only 5% of a director’s potential pay package.
The LAPFF has subsequently proposed that the company’s long term incentive plan (LITP) should contain safety-related and other non-financial business performance elements.
Royal Dutch Shell’s climate change targets have also caused concern for the (LAPFF).
This is because the forum is not convinced about the firm’s target to reduce emissions to 5% below 1990 levels by 2010 is adequate.
A Shell spokeswoman said the company's executive directors' remuneration structures were designed to reward overall achievement of the group's objectives.
She said: "The annual bonus is determined by performance against the Shell Group Scorecard. This scorecard has financial, operational and sustainable development targets, which include investing to keep our facilities safe and working hard to strengthen our safety culture further."
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