/ 16 December 2021

Shell shareholders support move to the UK

Royal Dutch Shell Plc's U.k. Headquarters
The Shell Centre, a registered office of Royal Dutch Shell Plc, in London, U.K., on Friday, Dec. 3, 2021. Royal Dutch Shell Plc announced a major overhaul of its legal and tax structure that will see the company walk away from the Netherlands amid deteriorating relations with whats been its home country for a century. Photographer: Chris J. Ratcliffe/Bloomberg via Getty Images

Shell shareholders have overwhelmingly backed plans to switch the oil giant’s headquarters from the Netherlands to Britain after a century and drop Royal Dutch from the name.

Chairperson Andrew Mackenzie hailed the “resounding support from shareholders” after they voted 99.77 percent in favour of the plan at a meeting in Rotterdam. Europe’s biggest energy firm says the move will simplify its tax and share arrangements, and speed up its transition from fossil fuels that cause climate change.

The Dutch government has said it was “unpleasantly surprised” by the plan, while Britain has hailed it as a vote of confidence in the British economy post-Brexit. The move “will strengthen Shell’s competitiveness and accelerate both shareholder distributions and delivery of its strategy to become a net-zero emissions energy business by 2050, in step with society,” Mackenzie said in a statement.

Shell’s board must formally approve the plans before they come into effect “as soon as reasonably practicable”, it said.

During questions from shareholders, Mackenzie had earlier denied the move was motivated by a Dutch court ruling earlier this year that Shell must cut its emissions.

But he admitted a Dutch government decision to drop plans for the scrapping of a dividend tax on big companies was a factor.

“We have always been and will continue to be very proud of how important the Netherlands is to our heritage,” he added.

Under the plans, Shell will switch its tax residence and move its top executives including chief executive Ben van Beurden from The Hague to London. Its 8 500 staff in the Netherlands will remain. The loss of the Netherlands’ biggest company is a major blow for the Dutch government, which had positioned itself as a key venue for investment after Brexit.

It will be the second big firm to depart for London after Unilever last year.

Royal Dutch Shell was formed in 1907 from a merger of Koninklijke Nederlandsche Petroleum Maatschappij and British firm Shell Transport and Trading. The “Shell” name and logo came from seashells imported in the 19th century by the father of Marcus and Samuel Samuel, the brothers who founded the British firm.

But pressure for change has been building, particularly from the activist investor Third Point, which has demanded Shell be broken up, bolster low-carbon investment and return more cash to shareholders. The landmark court victory for climate activists earlier this year that Shell must slash greenhouse gas emissions also came as a major blow.

Several shareholders quizzed the Shell top brass on whether their plans would do enough to address climate change.

Mackenzie insisted the London move would make the company more “flexible” as it transitioned away from fossil fuels, and said it would not “impact” on the court’s decision.

The Shell chairman also sought to play down his comments in November that the company was also “driven to go to the UK” by Dutch Prime Minister Mark Rutte’s decision in 2018 to abandon plans to scrap a tax on big companies’ dividends.

“It is not dominated by considerations about the dividend withholding tax,” he said, adding that there were “many factors” in the decision.

The tax hit to the country from Shell’s departure could amount to billions of euros, local media said. In return, the Dutch parliament could insist on a “departure tax” that Shell has previously put at around €400-million. Mackenzie however said he thought there was a “low probability” that Dutch MPs would back such a penalty. – AFP