The Shell Centre, a registered office of Royal Dutch Shell Plc, in London, U.K., on Friday, Dec. 3, 2021. Royal Dutch Shell PlcĀ 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 āresounding support from shareholdersā after they voted 99.77 percent in favour of the plan at a meeting in Rotterdam. Europeās 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 āunpleasantly surprisedā by the plan, while Britain has hailed it as a vote of confidence in the British economy post-Brexit. The move āwill strengthen Shellās 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,ā Mackenzie said in a statement.
Shellās board must formally approve the plans before they come into effect āas soon as reasonably practicableā, 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.
āWe have always been and will continue to be very proud of how important the Netherlands is to our heritage,ā 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 Netherlandsā 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 āShellā 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 āflexibleā as it transitioned away from fossil fuels, and said it would not āimpactā on the courtās decision.
The Shell chairman also sought to play down his comments in November that the company was also ādriven to go to the UKā by Dutch Prime Minister Mark Rutteās decision in 2018 to abandon plans to scrap a tax on big companiesā dividends.
āIt is not dominated by considerations about the dividend withholding tax,ā he said, adding that there were āmany factorsā in the decision.
The tax hit to the country from Shellās departure could amount to billions of euros, local media said. In return, the Dutch parliament could insist on a ādeparture taxā that Shell has previously put at around ā¬400-million. Mackenzie however said he thought there was a ālow probabilityā that Dutch MPs would back such a penalty. – AFP