Shell's Labor Costs Rose In 2011 Despite Fewer Workers
March 15 2012 - 3:47PM
Dow Jones News
The cost of Royal Dutch Shell PLC's (RDSA.LN, RDSB.LN, RDSA,
RDSB) global work force rose 2.8% last year, even though the
Anglo-Dutch company reduced its overall number of employees by some
7.2% as the company continues to roll out a long-term plan to
shrink headcount.
In recent years, Shell has sought to reshape its portfolio,
selling off assets in less-profitable areas like refining and
marketing. Chief Executive Peter Voser had made reducing the firm's
overall cost base, including labor, part of his strategic mandate
when he assumed his position in 2009.
Since then, the firm has cut its work force by 10% with the
majority of the departures coming from the refining and marketing
division.
Remuneration for the firm's remaining 90,000 employees increased
to $11.1 billion for 2011. The previous year, Shell paid $10.6
billion to 97,000 workers, figures from the company's annual report
showed.
The overall cost of labor--including share options given to
employees, tax obligations and retirement benefits--rose to $14.5
billion from $14.1 billion in 2010.
Senior executive take-home pay soared, thanks in large part to
long-term incentive bonuses and awards being vested.
Voser's overall compensation more than doubled from a year
earlier to EUR11.7 million ($15.3 million). This was lifted in
large part by a bonus of EUR3.5 million and EUR6.5 million awarded
under a long-term incentive scheme. Voser's base salary for 2011
was EUR1.5 million.
Outgoing exploration director Malcolm Brinded will receive
EUR2.52 million in severance pay, Shell said. His overall
remuneration package for 2011 was EUR11.4 million, according to the
report.
"The key reason for the increase in overall employee
remuneration, despite the headcount reduction--which was mainly due
to divestments that occurred in 2011--was the increased bonus
payment across the company, reflecting the positive year that 2011
was for Shell," a Shell spokesman said.
The company posted a 54% increase in net profit for 2011 to $29
billion.
-By Alexis Flynn, Dow Jones Newswires, +44 207 842 9471,
alexis.flynn@dowjones.com
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