Wednesday, 27 May 2009

Linda Cook, Shell's top woman executive, is first casualty of boardroom shake-up

Linda Cook, the head of Shell’s gas business, resigned abruptly yesterday, the first boardroom casualty at the hands of Peter Voser, the new chief executive of the oil company.
Mrs Cook, who fought Mr Voser for the top job, is leaving after a “mutual decision” with the new boss and is forgoing an £800,000 loyalty bonus because she is quitting before 2011. It is believed that Mr Voser, who is stepping up from chief financial officer, is in the process of choosing his new leadership team.
Mrs Cook’s departure comes as four large institutional investors were understood to have grown frustrated with her. They are thought to have found her grasp of the business outside her immediate gas operations to be “underwhelming”.
Big investors are known to have changed the dates and times of meetings with the company when it was clear that Mrs Cook was to have led the discussion. They then demanded to speak to other executives to discuss the group’s performance.
Mrs Cook, 50, is expected to receive a payoff worth at least £4.2 million, which represents the sum of last year’s total pay, excluding her pension. At the end of December her retirement pot — into which she has paid during her 29 years of service — was valued at $11.499 million (£7.22 million). It is not known whether Shell will enhance her pension arrangements as part of her departure package. The company declined to comment.
Mrs Cook’s replacement, as yet unnamed, has been earmarked and is said to be an internal candidate.
The £800,000 loyalty bonus that Mrs Cook will not receive was devised by Shell last year to try to retain key executives. It was calculated as equivalent to the executive’s annual basic salary in 2008. As such, Malcolm Brinded, the head of Shell’s exploration and production operations, will get £937,000 if he stays with the oil company for the next two years.
The retention bonuses were hotly debated by institutional shareholders and voted through with a reduced majority. Last week big investors rejected Shell’s pay report with 59 per cent voting against it, and several City shareholders lambasted the board over executive share awards.
The vote was an embarrassing blow to Sir Peter Job, who chairs the remuneration committee and rubber-stamped the loyalty bonuses. Sir Peter is no stranger to controversy over executive pay packages. The former head of Reuters, the financial news provider, also served on the remuneration committee of GlaxoSmithKline. In 2003 the drugs company awarded Jean-Pierre Garnier, its chief executive at the time, a £22 million golden goodbye.
At the Shell annual meeting last week Franklin Mutual, part of the giant Templeton group of funds in the United States, described as “pathetic” the defence offered by Sir Peter of the pay report and called for the resignation of the committee.
Its members include Josef Ackermann, the Deutsche Bank chairman and chief executive, and Lord Kerr of Kinlochard, the Shell deputy chairman and a former Ambassador to the United States.
Mrs Cook, who is Shell’s highest-ranking woman, will leave her post at the end of this week. Mr Voser will take the top job on July 1.
A Shell spokesman said: “She will continue to be available to advise the company on strategic and management developments in the near term and to ensure an orderly succession in Gas and Power. Linda’s replacement is the subject of a future decision, and there is no update on this today.”
Source: The Times

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