Executive remuneration

Annual bonus

In 2019, sustainable development continued to account for 20% of Shell’s Executive Scorecard, which helps to determine the annual bonuses awarded to Royal Dutch Shell plc’s Executive Directors. The metrics had equal weighting between Shell’s safety (10%) and environmental (10%) performance. Scorecard measures for 2020 will remain the same.

Targets are set each year by the Board’s Remuneration Committee, based on recommendations from the Safety, Environment and Sustainability Committee (previously called the Corporate and Social Responsibility Committee), with outcomes reported retrospectively in the Annual Report. The same annual bonus scorecard used for the Executive Directors applies to the majority of Shell’s employees around the world.

Read more about the 2019 directors’ remuneration in the Annual Report.

Scorecard structure

Long-term incentive plan

In 2017, we were the first international oil and gas organisation to set the ambition to reduce the Net Carbon Footprint of the energy products we sell (a carbon intensity measure that takes into account their full life-cycle emissions including customers’ emissions associated with using them) in the period to 2050. We aim to do that in step with society’s drive to meet the goals of the Paris Agreement on climate change (see Net Carbon Footprint).

We announced plans in 2018 to link executive remuneration to short-term targets to reduce the Net Carbon Footprint of the energy products we sell, including our customers’ emissions from their use of our energy products. We accelerated our plans by including an energy transition condition in the performance conditions for the 2019 long-term incentive plan. The condition includes the first three-year target to reduce the Net Carbon Footprint of the energy products we sell, as well as other measures that we consider will help us achieve our strategic ambitions in the long term, such as growing Shell’s power business, commercialising advanced biofuel technologies and developing carbon capture and storage (see Business strategy). These measures are based on recommendations from the Board's Safety, Environment and Sustainability Committee.

The energy transition condition applied to the Executive Directors, Executive Committee members and around 150 of Shell’s senior executives in 2019. From 2020, we will incorporate the energy transition condition into the performance share awards made to around 16,500 employees globally.

Long-term incentive plan

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