Oil boss to get more than £20m for two months' work

Mr Lund joined BG at the start of February

Updated: 
BP Plc Chief Executive Offficer Bob Dudley And Petroleum Industry Chiefs At The 21st World Petroleum Congress

BG boss Helge Lund is set to enjoy a bumper pay package that could be worth more than £20 million, despite agreeing to a takeover just two months into the job.

Mr Lund is likely to stay on until the completion of the deal, expected to take about a year, which will see the exploration firm swallowed up by Royal Dutch Shell.

The scale of his planned remuneration caused an outcry last year before it was trimmed slightly and pegged to stringent performance criteria by the company as it sidestepped a potential shareholder revolt.

Mr Lund joined BG at the start of February - a month earlier than previously planned - after 10 years running Norwegian energy giant Statoil.

His basic salary is £1.5 million with a payment in lieu of pension worth £450,000, plus bonuses and a golden hello package that multiply the value of his earnings several times.

Mr Lund's annual cash bonus is worth up to £3 million and a long-term incentive plan (LTIP) for 2015 is expected to be worth up to £4 million.

However the future value of this LTIP is unclear since it is based on BG performance conditions over three years, by which time it will have become part of Shell.

Meanwhile, the golden hello package grants Mr Lund an LTIP with a face value of £10.6 million - tied to tough criteria - plus a relocation allowance of £480,000 and shares to replace awards from his former employer, valued at £750,000.

While it is not yet known whether he will meet maximum performance targets, the surge in BG's share price on agreeing Shell's takeover plan means that its stock performance looks likely to have exceeded expectations.

Mr Lund said: "The transaction will take time to complete, during which my team and I will remain committed to BG and our shareholders, and to safely delivering our 2015 business plan."

A source close to BG said the chief executive would remain in place to ensure a "smooth transition" but would then "most likely move on from the business".

"His intention had been to come in and to look to turn around the business but Shell made the approach and it was felt to be a strong offer," the source said.

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