Shell to give staff 8% bonus after record profits
Shell is handing nearly all its 82,000 staff a bonus equivalent to 8% of their salary after the oil company reported record profits amid soaring energy prices.
The British multinational is making the one-off payment to the vast majority of its employees around the world, only excluding those on its executive committee, executive vice-presidents and contractors.
The oil firm said: “In recognition of the contribution our people have made to Shell’s strong operational performance against a recent challenging backdrop, our executive committee has decided to make a special recognition award of 8% of salary to all eligible staff across the world.
“The award enables those employees to share in our current operational and financial success – it is not a response to inflation or cost of living challenges.”
Last Thursday, the FTSE 100 company revealed it had made record profits of nearly $11.5bn (£9.5bn) for the second quarter in a row on the back of soaring oil and gas prices, and strong refining profit margins, and promised to give shareholders payouts worth £6.5bn.
It is a significant turnaround for a company that laid off thousands of workers, suspended bonuses and capped salaries during the Covid-19 pandemic.
Frances O’Grady, the general secretary of the Trades Union Congress, described the profits as “an insult to the millions of working people struggling to get by because of soaring energy bills”.
Overall, the world’s five biggest oil companies shared bumper profits of nearly $100bn in the first six months of this year.
On Tuesday, Shell’s UK rival BP was accused of “unfettered profiteering” after its underlying profits tripled to $8.5bn (£6.9bn) between April and June, thanks to high oil prices. It was its biggest quarterly profit in 14 years and BP said it would hand out nearly £4bn to shareholders as a result.
This prompted calls for a tougher windfall tax on energy companies, which are enjoying a profits bonanza while consumers struggle with a cost of living crisis as energy and food prices surge. Households’ average annual energy bills are expected to exceed £3,600 this winter.
As Russia’s invasion grinds on, the research firm Cornwall Insight predicted the energy price cap on annual bills in Great Britain was on track to rise to £3,615 a year from January.
The cap, which is set quarterly by the energy industry regulator, Ofgem, was at £1,400 a year in October. Cornwall predicts the cap will remain above £3,400 for the entirety of 2023, piling further pressure on household finances.
Energy prices have soared amid fears over supplies caused in part by the war in Ukraine. The oil cartel Opec and its allies agreed a small increase in oil output by just 100,000 barrels a day on Wednesday, dashing hopes of a larger increase, which is likely to keep oil prices elevated.
The BP chief executive, Bernard Looney, whose total pay reached £4.5m last year, in February described BP as a “cash machine”, even before the war raised prices further.