Shell is considering a significant pay increase for its CEO, Wael Sawan, potentially boosting his compensation by at least £4.6 million annually through a generous long-term incentive plan. The company is in discussions with shareholders about raising Sawan’s share awards from a maximum of six times his salary—currently set at £1.535 million in 2024—to nine times. This could bring his total possible annual award to £13.8 million.
If this plan is approved, Sawan’s overall compensation—including his base salary, the new long-term plan, and a bonus that could be 2.5 times his salary—could exceed £19 million. While Shell hasn’t confirmed the specifics of the pay adjustment, they noted that executive compensation is reviewed with shareholders every three years.
The potential changes in Sawan’s compensation were first highlighted by Sky News. If accepted in the upcoming annual meeting, it would place Sawan’s pay at a higher level than many other top CEOs in the UK. For example, Pascal Soriot of AstraZeneca has a maximum long-term incentive of 8.5 times his salary, while Rolls-Royce’s Tufan Erginbilgiç is eligible for 7.5 times.
In contrast, US oil executives have even more lucrative compensation packages. For instance, Darren Woods from ExxonMobil earned $44.1 million in 2024, with $26.8 million coming from stock awards, reflecting a 19% increase from the previous year. Mike Wirth of Chevron reported earnings of $32.7 million.
Despite the discussions on Sawan’s compensation, some shareholders may oppose a significant pay hike. Johannes Kreim, an ESG analyst at Union Investment, a major Shell shareholder, expressed concerns about fairness and transparency. He pointed out that the proposed increase does not align with the modest rise in the company’s stock price, which grew only about 6% last year.
Since taking the helm in January 2023, Sawan has shifted Shell’s focus back to oil and gas production while cutting costs. Under his leadership, the company’s share price has increased by approximately 20%, compared to a 7% rise for rival BP. Additionally, Shell has spent around $3 billion quarterly for the past four years on share buybacks, reducing the number of shares available and supporting the share price.
Shell typically sees its CEOs serve five-year terms, but Sawan’s predecessor, Ben van Beurden, led the company for eight years. Sawan’s total pay reached £8.62 million in 2024, a rise from £7.94 million the previous year.