- Davey: Shell boss £10m pay packet shows need for “bonanza bonus” tax
- HS2 Delay Must Trigger Barnett Consequential Funding for Wales
Davey: Shell boss £10m pay packet shows need for “bonanza bonus” tax
The Liberal Democrats have reiterated their calls for a tax on the bonuses of oil and gas company bosses, following the news that the former chief executive of Shell’s pay rose more than 50% to nearly £10m in 2022.
Shell announced today that former chief executive Ben van Beurden received a bonus of £2.6m in 2022, up from £2.2m the previous year. Under Liberal Democrat plans, this would be taxed at 50% raising £1.3 million to help families struggling to afford their bills.
The Liberal Democrats are calling for a “bonanza bonus” tax on oil and gas bosses making millions from sky-high energy bills, similar to the bankers’ bonus tax in 2009-10.
Liberal Democrat Leader Ed Davey said:
It is outrageous that oil and gas bosses are raking in millions in bonuses while families struggle to heat their homes.
Rishi Sunak’s refusal to properly tax these eye-watering bonuses and record profits is mind boggling and shows how out of touch he is. It is completely unfair at a time when the Conservative government is choosing to put people’s energy bills up.
Whether it is executive bonuses or soaring profits, the money being made out of Putin’s illegal war should be helping struggling families not oil and gas barons.
HS2 Delay Must Trigger Barnett Consequential Funding for Wales
The Welsh Liberal Democrats have reiterated calls for Wales to receive consequential transport funding from HS2 following news that large sections of the rail line are to be delayed.
Key sections of the line from Manchester to Crewe and Birmingham to Crewe will now be delayed to “save money”.
To date, the UK Government has refused to release the estimated £5 billion in funding for transport Wales should be entitled to under the Barnett formula because the Conservative Government claims the rail line passes through Crewe which is close to the Welsh border. This is despite the fact it did release consequential funding for Scotland.
The Welsh Liberal Democrats have claimed that with the section to Crewe now delayed, the Conservatives are out of flimsy excuses to deny Wales much-needed funding for public transport.
Commenting Welsh Liberal Democrat Leader Jane Dodds MS said:
With this delay, the Conservatives are out of flimsy excuses to deny releases of this much-needed funding for public transport in Wales.
We face a climate crisis and a cost of living crisis and improving public transport is key to tackling both of these. It is absolutely unacceptable the Conservatives continue to deny Wales the investment it needs to face these challenges head-on.
Public transport in Wales is creaking under the pressure of decades of underinvestment and poor transport links are putting off investment in our economy. The Conservatives must now urgently correct their atrocious record on this issue.
Follow @LibDemVoice on Twitter
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Mystery at Witchend is Went the Day Well? and Seven White Gates is A Matter of Life and Death
The long role of the Jewish community in Liverpool
Labour's post-election (non-)honeymoon: The Week in Polls
September now
Farron photos
Joe Bourke
Peter Martin
Mick Taylor
Michael BG
Jennie
17 Comments
Just a question: is Ben Van Beurden subject to UK taxation?
@mel – I suspect not and I suspect his contract stipulates payment will be made by the Dutch subsidiary…
But if he were, the gain would only be 5% not 50% at best, as he would be paying 45% income tax on that bonus (ignoring any permitted deductions),
@Mel Borthwaite ‘Ben Van Beurden subject to UK taxation’
Possibly not. Shell used to be a Anglo-Dutch corporation, but now it seems to be solely Dutch.
Half a century ago, Robert Townsend, who was famous for making Avis profitable for the first time, wrote an iconoclastic book on management called ‘Up the Organisation’. One of his points was that a chief executive should NOT have increases in remuneration during his/her time in office. It was part of his basic job description from the start that he (it was always a he in those days) would improve the organisation. So if things got better he was only doing the job for the pay he’d originally agreed.
Ian, Shell plc continues to be an Anglo-Dutch conglomerate.
Since early 2022, its HQ has been in London. Prior to that it was in the Hague.
Roland: the bonus tax would be additional to the existing 45%.
2.6m bonus. 1.3m bonus tax. Leaves 1.3m to be taxed at 45%: 615k. So total tax 1.915m.
Sorry, wrong maths: 1.3m at 0.45 is 585k. Total tax: 1.885m.
Another way it could work is by simply taxing the whole bonus twice. This would give a tax rate of 95%.
@chris – thanks for clarification(s) 🙂 .
Double (and triple) taxation can be tricky as both the order and principle amounts for each tax take has an impact on the total tax take.
@Ian, Robert was quite enlightened, as was Tom Peters who noted the days of golden parachute executive pay were numbered as people will ultimately find them out.
It is perhaps noteworthy, that energy sector bonus’s are arising because of market conditions improving profits not because of executive actions, similarly in the banking sector bonuses are arising because of the Bank of England increasing base rate and thus increasing the amounts of money flowing through the banks….
Personally I look at executives through the 80:20 filter: 80% are adding little and potentially negative value to the business…
With regards to 45%/50%/95% taxation, my understanding is that it is intended to be like Labour’s tax on bankers’ bonuses in 2009/10, so (assuming he’s a UK taxpayer, etc.) Ben van Beurden would pay 45% income tax on the bonus and Shell would pay a 50% “bonus” tax.
Vince cable took a deep dive into the issue of executive remuneration during his time as business minister. The issues to be addressed are outlined in his oral statement to parliament in January 2012 Executive Remuneration
Thanks, Peter. That does make more sense.
@ Joe Bourke, “Vince cable took a deep dive into the issue of executive remuneration during his time as business minister”.
It wasn’t that deep, Joe, and in April, 2021, Sir Vince admitted this was the case :
The Guardian 7 April, 2021 : “Vince Cable has said government policies aimed at tackling the vast pay gap between chief executives and their staff do not address the root cause of the issue and in some cases may have made the problem worse. The former business secretary said measures to increase the transparency of executive pay had backfired by sparking a one-upmanship between large corporations eager to offer the most lucrative pay.
Cable added that recent measures that forced the disclosure of pay ratios may also fail to expose the true nature of a company’s remuneration culture depending on the industry”.
The former Liberal Democrat leader was business secretary in the coalition government, which was criticised – “on balance fairly,” he said – for failing to introduce mandatory disclosure of the ratio between the pay of a chief executive and that of a median employee in a company.
@Chris Moore “Thanks”
No worries. I had to Google it, as my first thought was to hope he wouldn’t have any unpaid UK student loan and a 104% tax rate! 😮
David Raw,
it is good to see a former minister admitting “failing to introduce mandatory disclosure of the ratio between the pay of a chief executive and that of a median employee in a company.
Cable said he “regretted failing to pursue this measure while a minister because it appeared to show a greater divergence in companies such as retailers, which have a large workforce, than in financial services firms where even junior employees are paid a reasonable salary.”
The Guardian article UK policies on tackling runaway CEO pay have backfired, says Vince Cableconcludes with comments from the Deborah Harding of the High Pay Centre ““We have been tinkering around the edges of corporate governance,” she said. “We have to start talking about bolder measures. What’s wrong with a maximum wage? What’s wrong with a maximum pay ratio?”
Mel Borthwaite 10th Mar ’23 – 7:28am:
is Ben Van Beurden subject to UK taxation?
Most likely. In July 2022, it was reported that he was “looking to buy a mansion in London” having “been given an undisclosed relocation and housing allowance” to move from the Netherlands.
Ian Sanderson (RM3) 10th Mar ’23 – 10:24am:
Shell used to be a Anglo-Dutch corporation, but now it seems to be solely Dutch.
Chris Moore 10th Mar ’23 – 10:47am
Ian, Shell plc continues to be an Anglo-Dutch conglomerate.
Since early 2022, its HQ has been in London. Prior to that it was in the Hague.
Shell is now a British company…
‘Shell plans to become 100% British and move its headquarters to the UK’ [November 2021]:
https://www.dutchnews.nl/news/2021/11/shell-plans-to-become-100-british-and-move-its-headquarters-to-the-uk/
Northern Ireland was recently forced into a referendum on EU membership they didn’t want, forced to accept a result which put the Good Friday Agreement at risk, forced to accept a Northern Ireland protocol which could never work (in order for Boris Johnson to win votes in England) and now have contributors to Lib Dem voice describing the latest changes being Westminster re-learning how to wag its Irish tail.
I admire, respect and agree with Jane Dodd’s view that Wales gets next to nothing out of HS2 anyway and now gets less than that with delays so should get retrospective funding for it. I cannot see any way that Ed Davey comes out and says the same, especially if Lib Dems were anywhere close to being party in power, although it would be notable if he did.
I’m afraid Wales is being robbed of investment until people start to drift away, constituency seats are re-drawn and it’s becoming more like Northern Ireland (sans violent past and border with EU) where it’s either a play thing or something to be ignored for Westminster’s gain.
In reality, though its HQ is now in Britain, it’s really a multi-national with heavy British and Dutch presence – to wit, the Chief Exec.
Personally, I don’t think the description of it as a 100% British captures the complex nature of the beast.
Exec pay: try changing shareholder voting on exec pay to one person/ body, one vote.
It’s a particular problem in small companies, where grossly inflated and exec pay is at the expense of minority shareholders and company profitability.