Former Shell US Oil Trading Executive Seeks $29 Million Bonus Payment

Dimech, who previously led Shell’s oil trading operations in the U.S., claims he was shortchanged by over $29 million on his bonus for that year. His lawsuit reveals significant insights into how compensation is structured within one of the world’s largest oil companies.

The crux of Dimech’s argument is that despite his unit’s profits doubling during a tumultuous year marked by pandemic-related shutdowns, his bonus remained largely unchanged due to what he describes as an abrupt alteration in how bonuses were calculated. He asserts that had Shell followed its usual formula for determining bonuses, he woudl have received around $40 million instead of just about $11 million.

Interestingly enough, Shell does not publicly disclose details about its trading unit’s performance. though, Dimech contends that their North American crude group achieved record profits while many businesses struggled and people stayed home during lockdowns.

A spokesperson from Shell stated that they maintain a competitive pay structure benchmarked against industry standards but refrained from commenting further due to ongoing legal proceedings.

This lawsuit comes after unsuccessful attempts at internal arbitration and negotiations. Currently,shell is looking to move the case to a court in the U.K., wich adds another layer of complexity to this unfolding situation.

Dimech has a long history with Shell—spending three decades with them and over twenty years specifically within their trading division before leaving for Australia in 2021. At the time of these events described in his lawsuit filed earlier this year, he held dual roles as president of U.S. trading and general manager for North America crude operations.

the Bigger Picture

While exact figures regarding profits from North American crude trading remain unclear—Dimech mentions averages nearing $1 billion—he argues there was ample prospect for traders given fluctuating oil prices during lockdowns which initially plummeted before rebounding sharply.

Dimech recalls being assured throughout 2020 by company executives that there would be no changes made to their commercial bonus program despite unprecedented circumstances brought on by COVID-19—a promise he feels was broken when it came time for payouts. The result? A staggering shortfall amounting to nearly $29.4 million compared to what he expected based on previous calculations.

 In contrast,Ben van Beurden—the CEO at the time—received total compensation amounting only €5.84 million ($6.74 million) without any bonuses awarded due largely because of substantial losses reported by Shell totaling around $21.7 billion primarily attributed towards impairments and write-downs.
 

Dimech played an integral role overseeing bonus distributions within his unit over approximately fifteen years; responsible not just for calculating payouts but also guiding recommendations through various approval processes involving multiple stakeholders including oversight committees.

In prior statements made publically through court filings however; it’s been noted that such awards are ultimately left up entirely up discretionally determined solely based upon performance metrics rather than fixed percentages tied directly back profit accrued annually.