Remuneration roadshow – Q1 2020 engagement

Accessibility Script for Remuneration Report 2019

Title: Remuneration Report 2019

Duration 04:46

Description:

A video led by Gerard Kleisterlee summarising the 2019 Remuneration Report

Accessibility Script

[Graphic]

White introduction slide with animated text saying:

2019 Director’ Remuneration Report A message from the Remuneration Committee Chair 12 March 2020

[Vision]

Gerard Kleisterlee seated at a table talking to camera

[Animation footage]

Graphic on screen reads: Gerard Kleisterlee Remuneration Committee Chair & Senior Independent Director, Royal Dutch Shell plc

[Gerard to Camera]

I am Gerard Kleisterlee, Chair of the Remuneration Committee and Senior Independent Director at Royal Dutch Shell.

Today I want to report the 2019 Remuneration outcome and the changes we are proposing to the remuneration policy going forward.

Financially, 2019 was not an easy year for the industry in a very challenging macroeconomic environment. In addition, operational and safety challenges meant that Shell’s performance, as measured by the 2019 annual bonus scorecard, was well below target at 48%. Also seven people working under Shell’s operational control died in the course of their work in 2019. So, the Remuneration Committee made a further discretionary downward adjustment to the scorecard outcome for senior management because of these fatalities. The final annual bonus for 2019 for Executive Directors is based on a scorecard outcome of 43% of target and is around 70% lower than last year.

Accessibility Script for Remuneration Report 2019

[Animation footage] 2019 BONUS AWARDS: CEO €800,000

CFO €500,000 21% of the maximum awards

[Gerard to Camera]

Despite of a weaker 2019, our performance from 2017 through 2019 reflects the continued success of our strategy and the progress we are making in building a world-class investment case. We beat nearly all of our main competitors across the three key financial metrics that we measure relative to our peers and we beat our absolute free cash flow target by nearly 10%. Based on this performance, the Long-Term Incentive Plan vests well above target at 147%, down from last year at 190%.

[Animation footage] 2017 – 2019

1st on ROACE growth 2nd on Total Shareholder Return 3rd on CFFO growth FCF $93.4 bn

[Gerard to Camera]

While this is the fourth time in the last 10 years that the plan has vested above target, the average vesting over the decade is around target at 104%.

With our CEO pay being so heavily weighted to performance over a three-year period, this latest vesting means his 2019 single figure of remuneration is just under €10 million Euros which is 50% lower than last year.

[Animation footage]

CEO Single Figure:

2018 €20.14m

2019 €9.96m

[Gerard to Camera]

Nearly 20% of our employees have similar share awards and have also benefitted from Shell’s success, as have the millions of people who benefit from Shell’s dividend payments in their investments and pensions.

Accessibility Script for Remuneration Report 2019

Turning now to 2020 policy. We already simplified our executive directors’ bonus structure by removing the individual performance factor and reduced the CEO’s target bonus from 150% to 125% of base salary. In addition reflecting further on matters of quantum we are reducing the maximum LTIP performance opportunity from 800% to 600% of base salary.

The LTIP provides pay for performance which shareholders support but we intend to place a much greater emphasis on the use of discretion to manage Single Figure outcomes for the CEO. The Remuneration Committee will adjust as needed so that the highest outcomes are only achieved in the years of highest quality performance, recognised by shareholders. The Committee is not afraid of exercising downward discretion as we have used it in five of the last ten years on the bonus scorecard.

Last year following collaboration with shareholders, and in an industry first, we linked executive remuneration to nearer-term targets, towards achieving our ambition to reduce the Net Carbon Footprint of the energy products we sell. This link applied to around 150 leaders in Shell in 2019 and has been extended to around 16,500 employees in 2020. We remain committed to increasing the proportion of the link over time, as we learn more about the transition to lower carbon energy.

This is my last year as Chair of the Remuneration Committee and it has been a pleasure to engage with shareholders on the design of our revised policy and as we made our 2019 pay decisions. I encourage you to have a look at my full statement in the Directors’ Remuneration Report and the other materials on our website and I welcome any feedback you may have.

Thank you.

[Animation footage] Investor relations:

ir-europe@shell.com ir-usa@shell.com

[Graphic]

Shell logo

©Shell International Limited 2020

[Audio}

Shell mnecmonic piano

[Graphic]

A graphic appears titled Definitions and cautionary note, relevant to the video.