Global oil concern Shell spent more than £100,000 last year on advisory services from Deloitte and Willis Towers Watson. The firms advised the remuneration committee of the oil giant in the field of directors' remuneration and the impact thereof on governance and senior management.
Shell’s remuneration committee, internally known a REMCO, determines, in consultation with the Executive Board, the remuneration policy and individual salary packages of the Chairman, CEO, Executive Directors and senior management of the oil company. The remuneration committee also monitors the remuneration structure and amount of remuneration for all other senior managers and makes recommendations, in regards thereof, to the Board.
Currently, Shell’s remuneration committee is headed by Gerard Kleisterlee (Chairman), the former CEO of Philips and current supervisory board chairman of ASML; Patricia Woertz, a former Executive Vice President of oil company Chevron and former President and CEO of Archer Daniels Midland; and Gerrit Zalm, the current Chairman of ABN Amro, who was also, until the end of 2015, part of a committee at Shell that deals with sustainability and corporate social responsibility.
An analysis of Shell’s most recent annual report reveals that the remuneration committee of the oil company, in the past year, spent around £108,000 on advice from two consulting firms. It concerns audit and consulting firm Deloitte and Willis Towers Watson, one of the world’s largest HR specialists. Deloitte earned the £58,000 from its advice (the services were supplied by tax experts and HR consultants), while Willis Towers Watson billed around £50,000.
It is not the first time that the Shell’s Remuneration Committee has sought assistance from external consultants. Last year the oil giant spent £100,000+ to leverage expertise from two consulting firms: Willis Towers Watson (then Towers Watson*), once again, and the British consulting firm Kepler & Associates. And also in previous years, REMCO brought in external consultants to review and benchmark its remunerations policy.
Deloitte and Willis Towers Watson were tapped by Shell, not only for remuneration advice, but also for additional advisory assignments; for example, Deloitte was engaged for tax services and Willis Towers Watson to benchmark salary data. No information has been disclosed about the fees charged for these and other additional assignments.
* Willis Towers Watson was formed earlier this year through the merger between Towers Watson and Willis Group.