Disgraced Shell chief given $2.85m pay-off

Shell has outraged investors by giving its disgraced former chairman Sir Philip Watts a pay-off worth more than £1 million ($2.85 million).

Sir Philip, who was ousted from the oil giant in March after a scandal over the misreporting of oil reserves, also has been allowed to keep 2.9 million share options in Shell and start drawing a £584,000-a-year pension immediately.

The size of the pay-off is certain to provoke fury from shareholders at today's twin annual meetings of the Anglo-Dutch company in London and The Hague.

Investors are still recovering from January's shock reserves downgrade which wiped £16 billion from Shell's market value.

A top-10 shareholder said yesterday: "It is hard to square the pay-off with the damage done to Shell's share price in the short term and its reputation in the longer term."

The company is not thought to have consulted any of its big institutional shareholders directly about Sir Philip's severance deal before going ahead with the payment.

Shell said Sir Philip had received a lump sum payment of £1,057,971 to compensate him for loss of employment until his normal retirement date of June next year.

A spokesman said the payment reflected the contribution Sir Philip had made to Shell during his 36 years with the company.

"In the circumstances, the board determined that a payment was appropriate taking into account the longevity of service," he added.

Sir Philip, like the rest of the Shell board, was on a three-month service contract and so legally was entitled to a pay-off worth only £192,000.

There was further bad news for Shell yesterday after a fresh multibillion-dollar class action lawsuit was filed against the company and several of its serving directors in the US.

- INDEPENDENT