Royal Dutch Shell cut the pay of its chief executive by 42% in 2020, as the oil company’s profits slumped because of the coronavirus pandemic.
Ben van Beurden’s total remuneration for 2020 was €5.8m (£5m), compared with about €10m the year before, the company revealed in its annual report on Thursday.
Shell also announced on Thursday that former BHP chief executive Andrew Mackenzie will take over as its chairman in May. He will replace Chad Holliday, who is stepping down after six years as Shell chairman and more than 10 years as a board director.
The pandemic caused a precipitous fall in oil prices in March 2020 as traders adjusted to the prospect of a deep global recession caused by movement restrictions.
Oil companies responded by slashing spending: Shell in September said it would cut 9,000 jobs, about 10% of its global workforce, as part of a £2bn cost-reduction plan.
Shell also cut its dividend payments to shareholders for the first time since the end of the second world war. It lost almost $20bn (£14.7bn) during 2020 as it was forced to write down the value of its oil and gas assets by billions of pounds.
Van Beurden’s fixed pay was worth €2.1m, and he declined to take an annual bonus for 2020 as the value of shares slumped. However, he still received a bonus of £3.7m under his long-term incentive plan, down from £8m in 2019.
Shell’s chief financial officer, Jessica Uhl, received pay of £3.7m, including a long-term bonus of £2m.
Oil prices have recovered in the early months of 2021, in part because of dramatic production cuts but also because of hopes for the global economic recovery as vaccination programmes roll out.
Brent crude oil futures were sold for more than $65 a barrel on Thursday, above the $63 levels seen at the start of 2020, before the extent of the pandemic’s impact on the global economy became clear.
The improvement in oil prices has lifted the price of Shell’s shares, although they remain 31% below their levels at the start of 2020.