News in The Observer, May 11 2008, that Royal Dutch Shell is to pay Â£3m ($6 billion) to directors simply to stay on the board for three years will be met with strong criticism not only by the investor community but also by one of Shell’s forgotten set of stakeholders – their Pensioners in the UK . Many of Shell’s 30,000 plus Pensioners live on monthly stipends of well below the British minimum wage and a proportion of these, perhaps as many as 5000 in number, receive Â£5000 ($10,000) per annum or less. These lowly paid Pensioners, most of whom worked for Shell for 30 years or more and are now in their late 70s, 80s or older, received a paltry 4% increase in their pensions in a recent review. Shell Pensioners made a persuasive case to Shell earlier this year saying that a rise in line with the Retail Price Index (4%) would not “…address the needs of the majority of our pensioner population in terms of protection from real cost inflation.” They argued that a discretionary increase above RPI was warranted and pointed out that such increases were permitted by the regulations of the Shell Pension Fund – and had happened in the past. Shell rejected this request out of hand.
Sources close to the Shell pensioner community report that many Shell pensioners are incensed by the fact that not only are the remuneration packages of Shell’s board members well into seven figures but that special arrangements have been made and funded by Shell to ensure that directors’ pensions when they retire will be well into seven figures as well. These spources say that Shell seems very willing to ensure that its top executives maintain their high-living lifestyles when they retire, whilst turning a blind eye to the thousands of their ex-employees who live in less comfortable circumstances. The news about the “golden handcuffs” has fueled the fire of this discontent.