Shell gives almost £19bn to shareholders and promises even more cash to come

Shell has pledged to further reward its shareholders after passing nearly £19bn to them in 2024, alongside announcing plans to reduce expenditures and improve cost efficiency.

Before its capital market day event today, the oil behemoth told investors it is set on enhancing cost savings and cutting spending as part of its commitment to "deliver more value with less emissions," as reported by City AM.

This comes despite the company facing criticism last year for abandoning its target to cut net carbon intensity by 45 per cent by 2035.

The firm now intends to eliminate a total of £3.9bn to £5.4bn annually by the end of 2028, a substantial increase from the earlier goal of saving £1.5bn to £2.3bn by the close of 2025.

Additionally, Shell plans to trim its capital expenditure to between £15.5bn and £17bn yearly over the next three years.

Assuring its investors, the FTSE 100 entity has stated that it will enhance returns via share repurchases and dividend payments.

Other key goals announced include an ambition to lift production in the company's upstream and integrated gas operations by one per cent annually for the next half-decade.

Moreover, Shell aims to boost liquefied natural gas (LNG) sales by four to five per cent each year up until 2030.

In its strategy outline, Shell has committed to allocating 10 per cent of its investment budget into low-carbon ventures by the decade's end, coming after it significantly toned down its climate change commitments last year.

Shell issued a warning about plans to shut down some chemical operations in Europe, stating its intention to "unlock more value from our strong portfolio of chemicals assets by exploring strategic and partnership opportunities in the US and both high-grading and selective closures in Europe."

Chief Executive Wael Sawan commented: "Today we are raising the bar across our key financial targets, investing where we have competitive strengths and delivering more for our shareholders."

In 2023, Shell announced plans to reduce the "net carbon intensity" of the energy it sells by 15-20% by 2030 compared to 2016, revising its previous target of a 20% reduction.

According to Shell's latest annual report, the CEO's pay package surged to over £8m in 2024. Wael Sawan's total pay rose to £8.6m for 2024, up from £7.9m in 2023.

Sawan's total pay increased by 9%, comprising a £2.9m annual bonus and £3.9m in long-term share awards. Shell also announced that Sawan's base salary would increase by 5.5% to £1.5m for 2025.

In January, it was reported that Shell paid out over £18.7bn to shareholders in 2024 while reducing spending on renewable energy. The FTSE 100 giant reported a decline in earnings from £23bn in 2023 to £19.1bn in 2024 due to weaker oil prices and lower demand for fossil fuels.

Despite a decrease in earnings, Shell announced a four per cent dividend increase in the fourth quarter and unveiled a £2.8bn share buyback scheme.

In related news, City AM reported earlier this month that BP's CEO took a significant pay cut as profits dwindled at the FTSE 100 behemoth.

Murray Auchincloss, the chief executive of BP, received a salary of £5.4m for 2024, a drop from the £7.7m he pocketed in 2023.

This reduction was due to a more than £1.1m cut to his bonus, bringing it down to £734,000, and a £1.6m decrease in share-related payments to £2.8m.

However, his base salary saw an increase of approximately £450,000, taking it to £1.5m.

In February, it was disclosed that BP's net income dropped to $8.9bn (£7.2bn) in 2024, a decline from $13.8bn the previous year.