On Monday, in a statement Royal Dutch Shell proposed that the pay of its directors should be more closely linked to group’s climate performance and cut off the link between bonuses and liquefied natural gas (LNG) production volumes.
The development assumes significance since the weighting of Shell’s energy transition performance on its targeted path to net zero emissions by 2050 would double to 20% of the directors’ long-term incentive plan calculation if shareholders vote for the plan at a meeting on May 18.
This essentially places Shell’s efforts to curb its global warming emissions on an equal footing with financial metrics including free cash flow when it comes to remunerating directors in Shell shares.
Following the changes, the weighting of the energy transition metric to calculate directors’ bonuses would increase from 10% to 15%.
Incidentally, Shell which did not pay its Chief Executive, Ben van Beurden, a bonus in 2020, has proposed to raise his salary in 2021. In a statement Shell said, its carbon emissions peaked at around 1.7 billion tones in 2018,