In 2014 Ben Van Beurden was appointed CEO of Royal Dutch Shell plc (AMS:RDSA). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Royal Dutch Shell
How Does Ben Van Beurden's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Royal Dutch Shell plc has a market cap of €200b, and is paying total annual CEO compensation of US$20m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.5m. We took a group of companies with market capitalizations over €7.2b, and calculated the median CEO total compensation to be €3.5m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Royal Dutch Shell plc pays Ben Van Beurden more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Royal Dutch Shell has changed from year to year.
Is Royal Dutch Shell plc Growing?
Over the last three years Royal Dutch Shell plc has grown its earnings per share (EPS) by an average of 63% per year (using a line of best fit). Its revenue is up 8.5% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Royal Dutch Shell plc Been A Good Investment?
Boasting a total shareholder return of 38% over three years, Royal Dutch Shell plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by Royal Dutch Shell plc, and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that group.