Shell has revealed the full details of the latest pay package of its CEO, at a time of public concern over sky-high returns for investors and industry executives after high energy prices stoked the cost-of-living crisis.
Wael Sawan got £7.9 million for 2023, having become chief executive at the start of last year on an annual salary of £1.4 million.
The rest included an annual bonus of £2.7 million and his payout from the firm’s “long-term incentive plan” reached £2.6 million. That took his total “variable remuneration” to £5.3 million. There were also pension and car benefits and “relocation-related costs” of £334,778.
Global Witness, an anti-fossil fuels campaigner, called such levels of pay “eyewatering … at a time when people are struggling to pay bills” and has hit out at levels of spending on renewable energy.
The group said today that it would take the average UK worker “227 years” to earn £8 million and that it “could pay for 4,700 household energy bills”.
Jonathan Noronha-Gant, senior fossil fuels campaigner at Global Witness, said:⯓Nothing highlights our broken energy system more than the Shell boss receiving 227 times more money than an average UK worker. Shell’s CEO pay packet is a bitter pill to swallow for the millions of workers living with the high costs of energy.”
Sawan’s predecessor, Ben van Beurden received a total pay package of £9.7 million for 2022, up 50%.
Shell is the UK’s biggest energy firm and the second most valuable member of the FTSE 100 . Before its annual report came out today, there was been speculation among campaign groups that Sawan’s total pay package could amount to between £8 million and £10 million.
A Shell spokesman said: “Our executive remuneration is benchmarked against a broad range of European multinational companies. Data over the last ten years show that, on the basis of delivery against our targets, our senior executives are paid competitively.”
The company smashed profit records when energy prices spiked higher after Vladimir Putin’s invasion of Ukraine. For 2022, Shell made one of the biggest profits in UK history at £32 billion. That slipped to £22 billion for 2023.
Windfall taxes levied on the profits by the government were extended in Chancellor Jeremy Hunt’s recent Budget and will now run until 2029, taking the headline rate on oil and gas sector UK profits to 65%.
In the City, attention has focused on the outlook for sustained dividends. Payouts for investors have also caused controversy among campaigners. Shell paid out $23 billion in 2023.
According to analysis from the Reuters news agency on Shell’s numbers of the year, spending on its “Renewables and Energy Solutions” division fell by over fifth to $2.7 billion.
Recent analysis from broker Jeffries said for the current rates of share buybacks to be maintained at $3.5 billion, Shell’s needs cash flow from operations of $14.5 billion, with the company’s policy to return 30% to 40% of that measure of its performance.
In a note from earlier this year, Jeffries pointed to “concerns around Shell's ability to maintain the current level of buybacks”.
Shell says it intends to spend $10 billion to $15 billion in “low-carbon energy solutions” from 2023 to 2025 and denies the suggestion from campaign groups that it counts gas trading within its green operations. Its capital expenditure on low carbon energy for 2023 was $5.6 billion.
Russ Mould, investment director at AJ Bell said: “Shell CEO Wael Sawan has provided a clear indication he is prepared to prioritise returns over any commitment to net zero as he looks to close the valuation gap to US rivals.
“Or to put it another way, investments in renewables and other forms of green energy have to stand up on their own merits.”
