Job done at Shell

Shell said after a meeting in the Hague that Job, a non-executive director, will step down as chairman of the board's remuneration committee on 1 October and leave the company entirely at the next AGM in May 2010. It appointed Hans Wijers, a former Dutch economics minister, as his replacement.

Job, 68, became a focus for unprecedented shareholder anger at Shell's annual meeting in May after awarding what were widely considered to be overly generous bonuses to Shell executives. Investors holding almost 60 per cent of shares voted down the pay settlement. There were cheers at the humiliating board defeat.

Following the vote, some of Shell's institutional investors called for Job's resignation. Franklin Mutual, part of the Templeton group of funds in America, said the defence offered by Job was “pathetic”.

Under a three-year scheme he set out in 2005, Shell directors would have earned up to 200 per cent of their salaries in shares if the company outperformed three of its competitors. The company finished fourth but the remuneration committee decided to exercise discretion and allow some of the award anyway.

Since May, Shell’s chairman Jorma Ollila has met many of the group’s top shareholders. One said: “We made clear we expected to see the chairman of the remuneration committee move on. The company is paying the price for two years of contentious pay schemes.”

Friday's announcement from Shell pointed out that by the time Job retires from Shell he will have served as a non-executive director for nine years - affecting his independence as a director. He joined Shell in 2001. He is also a non-executive director of Schroders and TIBCO Software and a member of the supervisory board of Deutsche Bank.

Under corporate governance guidelines, serving for more than nine years is seen as a potential conflict with requirements for certain directors to be independent. Those who do serve for longer than nine years are expected to face annual re-election.

Peter Montagnon, former Reuters correspondent now director of investment affairs at the Association of British Insurers, said: 'The rejection by shareholders of the remuneration report at the last AGM required a response from the company. This is now an opportunity for a fresh start.”

The Financial Times' Lombard columnist commented that the outcome looks very much like that envisaged by a review of governance and remuneration at financial institutions which said a vote against pay policy should oblige the chairman of the remuneration committee to stand for re-election the following year. "Shell’s elegant solution spares Sir Peter Job that indignity, but institutional investors can still claim a scalp in their campaign to get a proper hearing on pay: Sir Peter will step down as remco chairman in three weeks’ time and leave the board when his nine years are up next year. One small step for a man, one giant leap for pay restraint."

Job joined Reuters as a graduate trainee journalist in 1963. After assignments as a correspondent in Paris, New Delhi, Kuala Lumpur and Jakarta, he served as manager in  Buenos Aires before taking over the Asian operation in 1978. He became chief executive in 1991 and retired in 2001. ■