BG chief paid £5.5m for nine-month stint at firm

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Helge Lund, the former chief executive of BG, was paid £5.5m for his 11-month tenure at the oil exploration and production company, which was taken over by Shell earlier this year.

The figure for the short period he worked for BG in 2015 does not include £9.7m of shares he received in February 2016, when the takeover took place after being approved by shareholders – triggering the share payout from the BG scheme.

The £5.5m figure is contained in BG’s annual report filed at Companies House last week, which showed that the Norwegian – who joined BG in March 2015 just weeks before Shell tabled its £47bn bid – had his £1.4m salary topped up with other payments for 2015.

The BG annual report shows that he received a relocation allowance of £906,000 – almost double the £480,000 previously announced by the company. He also received a £2.5m annual bonus and a £402,000 contribution to his pension.

Lund was hired from Norway’s Statoil to overhaul the underperforming company but his tenure at BG was dominated by his pay. The company cut his signing-on deal to £10.6m rather than £12m, even before the Shell deal had been announced, to head off a row with shareholders. The row intensified when BG agreed to be bought by Shell only weeks after he joined.

Sir John Hood, the non-executive director who chaired the remuneration committee, said in the annual report that when pay deals were considered for 2015, the committee had taken into account the “unusually long period” between the Shell deal being announced and it being completed.

Hood wrote: “2015 was Helge Lund’s first year as chief executive, and during a period of prolonged uncertainty for BG and its employees, Mr Lund continued to lead high standards of safety, project delivery and operational performance, while also maintaining staff morale. Despite the very challenging external environment, BG delivered strongly in all these areas.”

During the period when the deal was announced, the price of oil fell from $65 a barrel to $36. It led to questions about the terms of the deal, which was based on 383p cash plus 0.4454 of a Shell “B” share for every BG share.

“Under Mr Lund’s leadership, BG grew production by 16% on 2014,” Hood said, saying the committee had also reviewed the pay deals against this backdrop.

Lund received 951,138 BG shares, worth £9.7m, when the deal completed in February, Shell said. This includes three tranches: 733,954 shares of a £1.1m share award he received in May 2015, some 168,208 from a 756,938 award of shares he also received in May and 48,976 he received to buy him out of shares from his previous employer.

Powered by article was written by Jill Treanor, for The Guardian on Sunday 10th July 2016 16.01 Europe/London © Guardian News and Media Limited 2010


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