Remuneration Committee and principles

Remuneration Committee

Neil Carson

Chair

100% attendance

8 out of 8 possible meetings attended

Member since: June 1, 2019

Euleen Goh

Committee Member

100% attendance

8 out of 8 possible meetings attended

Member since: May 20, 2020

Catherine Hughes

Committee Member

100% attendance

8 out of 8 possible meetings attended

Member since: July 26, 2017

Gerrit Zalm [A]

Committee Member

100% attendance

7 out of 8 possible meetings attended

Member since: May 21, 2014

Biographies are given in section “The Board of Royal Dutch Shell plc"; and the REMCO meeting attendance is set out below:

• Download table (XLS, 11 kB)

Committee Member	Member since	Maximum possible meetings	Number of meetings attended	% of meetings attended
Neil Carson (Chair)	June 1, 2019	8	8	100%
Euleen Goh	May 20, 2020	8	8	100%
Catherine Hughes	July 26, 2017	8	8	100%
Gerrit Zalm [A]	May 21, 2014	8	7	88%
[A] Mr Zalm was unable to attend one meeting due to the short notice with which it had been scheduled.

The REMCO’s key responsibilities include determining:

The REMCO is also responsible for determining the Chair of the Board’s remuneration. The REMCO monitors the level and structure of remuneration for senior executives below Senior Management and makes recommendations if appropriate to ensure consistency and alignment with Shell’s remuneration objectives. When setting the policy for Executive Director remuneration, the REMCO reviews and considers workforce remuneration and related policies, and how pay and benefits align with culture.

In exercising its responsibilities, the REMCO takes into account a variety of stakeholder considerations.

The REMCO operates within its Terms of Reference, which are reviewed annually. They were last updated on December 7, 2021, and are available on www.shell.com.

Advice from within Shell was provided by:

• Ben van Beurden, Chief Executive Officer (CEO);
• Ronan Cassidy, Chief Human Resources and Corporate Officer and Secretary to the REMCO; and
• Stephanie Boyde, Executive Vice President Performance and Reward.

The Chair of the Board was consulted on remuneration proposals affecting the CEO. The CEO was consulted on proposals relating to the Chief Financial Officer (CFO) and Senior Management.

The REMCO met eight times in 2021 and its activities included:

• determining vesting of the 2018 Long-term Incentive Plan (LTIP) award for Senior Management;
• determining 2021 target bonuses and 2021 LTIP awards for Senior Management;
• approving the 2020 Directors’ Remuneration Report;
• setting 2021 annual bonus and LTIP performance measures and targets;
• considering matters relating to the updated strategy and the transition of our business to net-zero emissions, and the potential implications for the 2022 annual bonus and LTIP performance measures and targets;
• setting exit and appointment remuneration for changes in the Executive Committee;
• setting terms for the relocation, and pay arrangements of the Executive Directors from the Hague to London; and
• monitoring external developments and assessing their impact on the Directors’ Remuneration Policy.

After a competitive tender process, in 2021 Deloitte was chosen to provide external advice on Shell’s remuneration structures and developments in market practice around remuneration. The choice was based on ability to assess the risk profile of policies, knowledge of investors’ expectations and familiarity with international market practices. Deloitte is a member of the Remuneration Consultants Group and operates according to the group’s code of conduct when advising clients. REMCO is satisfied that the advice provided was objective and independent. The total fees in relation to the advice were £55,000 (excluding value-added tax). Deloitte provided other consultancy and accountancy services to Shell during the year, but the REMCO is satisfied that this did not compromise the independence of the advice on executive remuneration. The REMCO also reviewed benchmarking data and analysis prepared by Shell’s internal HR function on market developments in executive pay.

Principles

The principles that underpin the REMCO’s approach to executive remuneration are set out in section "Directors’ remuneration policy".

The REMCO considered the provisions of the UK Corporate Governance Code when deciding 2021 pay outcomes. It also sought to reflect the principles of clarity, simplicity, risk management, predictability, proportionality and alignment with culture.

Shell has a consistent global reward and performance philosophy that sets clear expectations of employees. The annual bonus scorecard and LTIP are designed to ensure that remuneration is clearly aligned with Shell’s operating plan and strategic ambitions. The same measures apply to Executive Directors and Senior Management and to a significantly broader employee base. This provides alignment throughout the organisation with Shell’s culture and strategy. The annual operating plan translates into targets on the annual bonus scorecard, and a quarterly update on performance against scorecard targets is provided to employees. The LTIP is largely based on outperforming the competition. Employees receive regular updates on Shell’s performance against competitors. To assist in the mitigation of reputational risk and to ensure proportionality, the REMCO will use discretion to ensure the highest pay outcomes are delivered only for outstanding performance.