The Long Term Incentive Plan (LTIP) 2020
The Long Term Incentive Plan (LTIP) 2020
The timeline on this page illustrates the key dates 3 YEAR PERFORMANCE PERIOD
and events during the lifecycle of the award. JANUARY <> DECEMBER
Continued >
Performance Conditions Relative conditions: Performance is compared at the start and end of the
An LTIP award is a conditional award of performance period on a relative basis versus BP, Chevron, Exxon and Total
a notional number of shares. It is notional
because the number of shares that are
ultimately delivered (vested) may be higher Total Shareholder Return (TSR)
or lower, depending on the outcome of any 22.5%
Change in share price and dividends paid RANK OUT OF 5 VESTING %
conditions to which the award is subject.
1 200%
The chart on the right shows the performance
conditions applying to awards made from 2019. Cash Flow from Operations (CFFO) 2 150%
22.5%
Cashflow from operating activities 3 80%
These measures support and reward our
4 0%
employees for the achievement of the
strategic ambitions of the Shell Group. 5 0%
Return on Average Capital Employed (ROACE)
22.5%
Indicator of capital discipline
The Energy Transition performance measure
introduced in 2019 includes targets around
Absolute conditions
Net Carbon Footprint, growing our power VESTING %
business, advanced biofuels technology Outstanding 200%
and alternative fuels, and development Free Cash Flow (FCF) Target 100%
22.5%
of carbon capture systems. This measure The sum of cash flow from operating activites and cash flow from Threshold 40%
supports our intent to reduce the carbon
investing activities Below Threshold 0%
intensity of the energy products we sell
in step with society as it moves towards VESTING
the goal of the Paris Agreement. More Energy Transition
10.0% The vesting outcome will range
information can be found here A discretionary condition relating to energy transition as defined in from 0–200% and will be
your award certificate determined by the
Remuneration Committee in its
Each of these measures has a proportional sole discretion.
vesting % shown on the chart on the right. There is one additional rule: should the TSR ranking outcome be fourth or fifth, the total
vesting of the award will be capped at 100%.
Management discretion - the Company, acting reasonably and in good faith, has discretion Continued >
to reduce (including, for the avoidance of doubt, a reduction to zero) the vesting percentage
of the award, on the basis of the wider performance of the Company.
So, in this example, if 100 conditional shares were awarded then, as a result of Shell’s Energy transition 10.0% Target 100% 10.0% x 100% = 10.00%
performance, the final number of gross vested shares is 100 x 118% i.e. 118 shares EXAMPLE ONLY - TOTAL VESTING PERCENTAGE OF INITIAL CONDITIONAL AWARD 118.00%
Bear in mind that whenever a dividend is declared on RDS shares during the 3 year LTIP - EXAMPLES OF HISTORICAL OUTCOMES
performance period, notional dividends may accrue on your award which increases the 200
number of shares that can vest. dividends
DIVIDENDS ACCRUED ON
accrued
SHARES1ST YEAR AFTER VEST
The chart alongside demonstrates how performance conditions and dividends have impacted 200 - ESTIMATE (REFER TO SECTION
during 3 year
“DIVIDENDS - GROW YOUR
SHAREHOLDING”)
a notional award of 100 shares in the past. These are historical examples performance
and are based on awards subject to different performance conditions to those used currently. 150 period (actual)
DIVIDENDS ACCRUED DURING
3 YEAR PERFORMANCE
They should not be taken as an indication of what might happen in relation to future awards.
SHARES
PERIOD (ACTUAL)
150
shares
GROSS
total shares
PORTION OF SHARES VESTED
100 vested
BASED ON EXTERNAL COMPARATORS
NUMBERS OFof
(OVER 3 YEARS)
100
number
190%
PORTION OF SHARES VESTED
BASED ON 3 YEAR
AVERAGE BPF
50
50
84% original award
70% ORIGINAL AWARD OF SHARES
of shares
16%
0
PSP OUTCOME
2013 = 68%
award: vest 2016 PSP OUTCOME
2014 = 97%
award: vest 2017 PSP OUTCOME
2015 = 82%
award: vest 2018 PSP OUTCOME
2016 = 156%
award: vest 2019
There are three ways to track the 1. On notification of an award of shares 2. A personalised interim value statement 3. You can follow the performance of any
performance of your award during the having been made, you will receive a link is issued to you in June and December of outstanding LTIP awards in the quarterly
vesting period to a personalised Initial Value Statement, each year during the performance period. tracker found here in HROL.
indicating the value of the award at award The intention of this interim statement is to
Of course, the actual value can only (grant) date. give you an idea of the number of shares
be known when the outcome of the you may receive and what those shares
performance measures is confirmed after might be worth if the award vested on the
the end of the performance period. For statement date (based on the share price
that reason, whilst we hope you find the and exchange rate at that date).
information provided to you helpful you
should not draw any conclusions from, or
rely on, any interim statements you receive.
The Vested Share Account (VSA) Fidelity Share Account (US shares)
Your delivered shares will be held in your
Your delivered shares will be held in the
Fidelity account. For further information
VSA (administered by Computershare) in a
regarding your Fidelity account, please
paperless and secure manner.
contact Fidelity directly using one of the
To view your vested shares please login to contact methods below:
your Computershare account.
• online at www.netbenefits.com/shell
Details of the gross and net vested award
will be available to view on your account • 1-800-30-SHELL
by selecting Holding Information, and then
clicking Long Term Incentive Plan from the
drop down menu.
There is a facility to transact from the VSA,
which means that you can sell either all or
some of your shares and can also transfer
your shares to a brokerage account of your
choice. Shell will pay the annual VSA fee for
you but please note that you will have to pay
transaction fees to sell the shares.
If you transfer shares to another brokerage
account/nominee, the transfer is free of
charge, however the new broker/nominee
may charge annual fees.
Further details can be found here:
www.shellshareplans.com/vsa/
Shell Share Plans Divestment guide: For details of treatment of your award(s) if the company you are working for is being divested
Leaver guide: Details of how your plans are affected by your departure and any actions you may need to take
Transferring countries Details of what happens to your share plans on transferring countries and any actions you may need to take
Tax & Compliance Tax – summary: High level country tax positions
Tax - Q&A: QA for expatriate, LNN and local participants
Foreign Asset Reporting: High level information concerning your compliance with local reporting requirements
LTIP general Vesting Q&A
Cash out populations Information on those countries which have restrictions on share delivery
Chinese Nationals and Locally Hired Foreigners Important information related to receipt, sale and transfer of any shares
Tax Equalisation International mobility policy
FATCA and CRS Details relating to compliance under Foreign Account Tax Compliance Act and Common Reporting Standards.
Royal Dutch Shell Securities Dealing Code If you are an employee insider you must abide by the dealing code in the event that you wish to sell any shares.
Investor Centre Keep up to date with our share price, upcoming events and read our recent and archived publications and financial statements
HR Online Performance of the LTIP Quarterly trackers showing the performance of any outstanding LTIP awards
Performance of the PSP Quarterly trackers showing the performance of any outstanding PSP awards
Performance conditions LTIP - prior years LTIP performance conditions for awards in this and previous years
Performance conditions PSP - prior years. PSP performance conditions for awards in this and previous years
Plan Rules Rules of the Shell Share Plan 2014 (including LTIP and PSP)
US prospectus Specific plan information for US base or host country employees
Tax - Country tax summaries Detailed tax information by country
Share Plans Query form Use this Share Plans Query form if you have queries about your award that cannot be answered from the Plan materials
HR Operations If you are unable to access our Share Plans Query forms, please send an email to HR Operations
Let’s talk about Shell’s share plans Link to our yammer page
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