Shell’s £80m boss Ben van Beurden is preparing to join the stream of FTSE100 bosses heading for the door
- van Beurden could resign as early as 2023 as a replacement is being sought
- Shell is under pressure to adopt sustainable technologies
Shell’s £80m boss is preparing to join the stream of FTSE100 bosses heading for the door.
Ben van Beurden – who, it emerged in March, bagged £4.6m in bonuses last year on top of his £1.4m salary, taking his total pay and bonuses to almost 80 in his nine years at the helm Millions of pounds raised – could step down as early as 2023, the oil giant will start looking for a replacement.
His departure will mark the end of an era for Shell as the company seeks to hit the tricky line of increasing Britain’s energy security by adopting sustainable technologies. While Van Beurden’s legacy includes a commitment to reducing oil production, he has been criticized for not taking more drastic action.
End of an era: Ben van Beurden’s legacy includes a commitment to reducing oil production
In a landmark court case brought by activists in the Netherlands last year, the oil giant was ordered to accelerate the pace of its green transition and ensure its carbon emissions in 2030 are 45 percent lower than in 2019.
Competitors like BP are also increasing the pressure as they ramp up investments in areas like bioenergy and hydrogen power, which will help spur the shift to “greener” manufacturing.
BP chief executive Bernard Looney has promised to make a series of investments in more sustainable energy sources by 2025, but Van Beurden is viewed by many in the industry as catching up.
Shell’s shock came from Reckitt Benckiser boss Laxman Narasimhan leaving the Dettol maker to return to the US. Hours later, on Thursday night, coffee giant Starbucks announced it had hired the Indian-American businessman as its new chief executive. Dutchman Van Beurden, 64, joined Shell in 1983 and has held various positions across the company in oil exploration and refinement.
Shortly after becoming Chief Executive in 2014, he orchestrated the £47bn acquisition of oil and gas exploration company BG Group.
He also oversaw the transfer of Shell’s headquarters from the Netherlands to London. But when the pandemic hit, he disappointed investors by cutting the company’s dividend for the first time since World War II.
Shareholders who had relied on the ‘never sell shell’ motto for their reliable payouts had faltered as the postponement underscored how badly the oil and gas industry has been hit by Covid.
Two years later, the picture has changed again. Oil and gas giants are now making record profits as Russia’s brutal attack on Ukraine has pushed up fuel prices.
Shell has hit a £9.9 billion cash windfall in the three months to June – sparking fury among households and businesses struggling to afford soaring energy bills.
For Van Beurden, who has been at the helm for eight years and whose awards are under increasing scrutiny, now seems an attractive time to say goodbye.
Analysts said it’s no surprise Shell’s lifesaver was headed for the door, considering few oil and gas chiefs stay in their roles longer than a decade. According to Reuters, Shell began nominating successors last summer and has shortlisted four candidates. At the top of that list are Wael Sawan, Head of Integrated Gas and Renewable Energy, and Huibert Vigeveno, Head of Downstream Refining Operations.
Oswald Clint of investment bank Bernstein said: ‘The board is deep and well staffed and ready to continue the profitable transformation of the company for tomorrow.’ Shell declined to comment on speculation about Van Beurden’s departure.
Why have so many bosses quit?
The FTSE100 has seen an exodus of CEOs this year – evidence that the ‘great resignation’ is also practiced by the city’s top executives.
So far, 17 blue-chip CEOs have announced their resignations, well above the average for a normal year. The departure of Ben van Beurden from Shell would bring that number to 18.
Other high-profile names include Prudential’s Mike Wells, Taylor Wimpey’s Pete Redfern and JD Sports’ Peter Cowgill, who have already been replaced.
There are countless theories as to why they decided to resign. They range from burnout after two years of Covid, while some are unwilling to face the looming recession – and choosing to get out before times get tough. Some foreign bosses have also decided to return to their families after the pandemic has passed.
A leading headhunter also told the Daily Mail that the exodus was being prompted by escalating bureaucracy and ticking boxes.
Odgers Berndtson’s Mark Freebairn said bosses who come to a public company to run operations are frustrated by the constant interaction with regulators and shareholders.
He added, “If you’re a CEO and a private equity firm comes along and gives you an opportunity to run a business … for the same money but without the exam, without the checking of the boxes, without your neighbors if you.” know all about your reward – why don’t you take it?’