Sector News

Shell’s CEO to step down next year

September 11, 2022
Energy & Chemical Value Chain

Shell’s CEO, Ben van Beurden, is preparing to step down next year after nearly a decade as head of the giant energy firm, Reuters reports.

According to company sources, Shell, which has declined to comment on the matter, has shortlisted four candidates to succeed van Beurden, whose departure will end a near-40-year career at the company.

Those in the running are, Upstream Director Wael Sawan; Downstream Director Huibert Vigeveno; Finance leader Sinead Gorman; and Executive Vice President Zoe Yujnovich.

Van Beurden has overseen some significant changes during his time as CEO, some of which will resonate for years to come. He spearheaded the company’s takeover of rival BG Group in 2016, an acquisition described as the biggest energy deal in more than a decade, then four years later announced Shell would cut 7,000–9,000 jobs as it looked to make annual cost savings of between US$2bn–2.5bn.

Van Beurden was also at the helm when Shell said that it would move its headquarters from the Netherlands to the UK to help “make the business more agile when it comes to decision-making”. The relocation, which was welcomed by the UK’s Energy Secretary at the time, Kwasi Kwarteng, was met with fierce opposition from the Netherlands, and also resulted in the firm dropping “Royal Dutch” from its name.

The job cuts and move were both partly attributed to restructuring of operations as Shell pushes to become net zero by 2050. During a speech in late 2020 outlining Shell’s future strategy, van Beurden said that the company’s mission to cut emissions in line with society’s demand to become more sustainable, means “dramatic change for Shell”. He further added that the company had to be net zero in all of its operations, “which means major changes at refineries, chemicals sites, onshore and offshore production facilities.”

Shell had already announced in 2017 that it would cut its emissions by 50% by 2050, but investors criticised its long-term plan, saying that it lacked any binding targets.

The job as CEO is not without its perks however. According to Shell’s annual report, in 2021, van Beurden was awarded €5.4m (US$6.7m) in bonuses and long-term incentive payments, on top of his €2m fixed pay – although this was a significant reduction from his €20m a year wage in 2018.

The collapse in energy demand in early 2020 affected not only wages, but prompted van Beurden and his board to cut Shell’s dividend – the world’s largest at the time at around US$15bn – by an unprecedented 66%.

In stark contrast, surges in gas prices and Russia’s invasion of Ukraine has seen oil companies across the world benefit from record profits in Q2 of this year. Despite calls by some politicians to impose a further windfall tax to help consumers struggling with soaring energy bills, the UK’s new PM, Liz Truss, has firmly opposed the idea.

by Kerry Hebden


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