Executive staff at Shell will not have their pay reviewed until July 2011.

Royal Dutch Shell has announced plans to freeze the pay of its top executives until 2011, a move that will be welcomed by its shareholders.

In a letter to shareholders Hans Wijers, Chairman of the Royal Dutch Shell Remuneration Committee, outlined proposals to review executive remuneration.

After a shareholder revolt at is AGM last May when 60% voted against a pay deal that included discretionary bonuses for top directors, Wijers, who only took up his position in September 2009, had been forced to take action.

Thanking shareholders for their patience and feedback, Wijers said that despite an agreement that Shell was going in the right direction with its remuneration policies, there was still room for improvement.

“There needed to be changes in various elements in order to better align the remuneration policy with shareholder interests and the company’s long-term strategy,” Wijers said.

The result of Shell’s review means that base salaries will be frozen until July 2011 – they were last reviewed in July 2008; and new annual bonus measures will be introduced including the assessment of Executives by the CEO who will determine either a rise or fall in bonus depending on individual performance.

The only salaries which will see a small increase are those of CEO Peter Voser and CFO Simon Henry, who were both promoted to their roles in 2009, although the oil giant pointed out that their salaries will still be 20% less than their predecessors.

Earlier this month Shell reported a sharp fall in profits for 2009 compared to the previous year, blaming a “weaker demand” in oil and a “weak global economy”.

It also said it would be cutting its global workforce by 1,000 as part of a $1 billion (£700m) cost-cutting exercise.

Shareholders will be given their next opportunity to air their opinions at Shell’s next AGM on 18 May in The Hague in the Netherlands.

Shell’s share price on the London Stock Exchange has seen a slight rise this morning following a month of losses. 

Click here ^[1]to read the full version of Hans Wijer’s letter to shareholders.