Members of pension funds are being urged to vote against the remuneration report of Shell at its AGM on 15 May following the oil giant’s failure to link directors’ management of non-financial issues, such as health and safety, with long-term pay awards.
In the wake of a similar push recently at BP, the £75bn Local Authority Pension Fund Forum has recommended its members, which include some of the largest local councils in the UK, vote against the company’s remuneration report.
The forum believes that Shell should link management of these issues to its long-term incentive plan.
Local Authority Pension Fund Forum chairman Darrell Pulk said: “If companies believe that issues such as climate change, or safety, are critical to their future success, then they need to make this crystal clear in the manner in which they reward their directors.
“Simply linking a small portion of the annual bonus to non-financial targets does not focus executives enough on the longer term instead of the quarterly results treadmill. These are long-term issues, so why not link them to long-term incentives?”