If you don’t qualify for bronze, you can’t expect gold

Posted by Marc Hodak on May 19, 2009 under Executive compensation | Be the First to Comment

Shell Oil’s board has suffered one of the worst rebukes a board can bear–the slap down of their executive pay package in a “say on pay” vote.

I’m not a big fan of “say on pay,” but when a company sets up an incentive plan based on placing in the top three among a set of peers, then the company places fourth, you can’t expect to get away with:

“The difference between Shell and the third-ranking company, France’s Total SA, was marginal and Shell’s ranking didn’t fully reflect its relative performance.”

The Brits, especially, will not countenance a bonus for finishing behind the French.  What was the board thinking, really?