Shell: FTSE 100 giant vows to boost investor returns after £19bn pay day
Shell has vowed to reward its shareholders even further after the FTSE 100 giant handed almost £19bn to its investors in 2024 while also revealing plans to cut spending and reduce costs
Ahead of its capital market day event today, the oil giant told investors it also plans to ramp up cost savings and cut spending as it promised to “deliver more value with less emissions”.
That comes despite having last year controversially dropping a plan to reduce net carbon intensity by 45 per cent by 2035.
Shell said it would now look to strip out a cumulative £3.9bn to £5.4bn a year by the end of 2028.
This is up from the previous aim for £1.5bn to £2.3bn by the end of 2025.
It will also lower its spending to £15.5bn to £17bn a year over the next three years.
The FTSE 100 firm told shareholders it would look to boost investor returns through share buybacks and dividends payouts.
Other targets outlined included aims to grow its top-line production across the group’s upstream and integrated gas business by one per cent a year over the next five years.
It added it would seek to grow sales of liquefied natural gas (LNG) by four per cent to five per cent a year through to 2030.
It cautioned over plans to shut some chemicals operations across Europe, saying it wants to “unlock more value from our strong portfolio of chemicals assets by exploring strategic and partnership opportunities in the US and both high-grading and selective closures in Europe”.
Chief executive Wael Sawan said: “Today we are raising the bar across our key financial targets, investing where we have competitive strengths and delivering more for our shareholders.”
Last year Shell also revealed plans to reduce the “net carbon intensity” of the energy it sells by 15 per cent to 20 per cent by 2030 compared with 2016, having previously targeted a 20 per cent reduction.
CEO gets bumper pay boost
According to its latest annual report, pay of Shell’s chief executive swelled to more than £8m in 2024.
Wael Sawan’s pay packet increased to £8.6m for 2024, up from the £7.9m he received in 2023.
Sawan’s total pay increased by nine per cent as he landed a £2.9m annual bonus and £3.9m in long-term share awards.
Shell added that Sawan’s base salary would rise by 5.5 per cent for 2025 to £1.5m.
In January, Morning Wire reported that Shell had paid out more than £18.7bn to shareholders in 2024 while cutting spending on renewable energy.
The FTSE 100 giant reported a dip in earnings from £23bn in 2023 to £19.1bn in 2024 amid weaker oil prices and lower demand for fossil fuels.
Despite the drop-off in earnings, Shell said it had hiked dividends by four per cent in the fourth quarter and announced a £2.8bn share buyback programme.
CEO of Shell rival BP takes huge pay cut
The news comes after Morning Wire reported earlier this month that the chief executive of BP had taken a £2.3m pay cut as profit was slashed at the FTSE 100 giant.
Murray Auchincloss received a pay packet of £5.4m for 2024, down from the £7.7m he received in 2023.
The drop came amid a more than £1.1m cut to his bonus to £734,000, and a £1.6m fall in share-related payments to £2.8m.
His base salary rose by about £450,000 to £1.5m.
In February, it was revealed that BP’s net income fell to $8.9bn (£7.2bn) in 2024, down from $13.8bn the previous year.
The giant said lower oil and gas prices, as well as reduced profit from its refineries, had impacted its earnings.