Shell faces revolt on executive pay

By Raji Menon and Tom Bergin

LONDON (Reuters) - Royal Dutch Shell (RDSa.L) faces a possible shareholder revolt over its executive pay policy after the Association of British Insurers (ABI), a large investor and a corporate governance agency expressed concerns about the plan.

The ABI said on Tuesday it had issued an "amber top" notice to members about the Shell Remuneration Committee's decision to exercise their discretion and award managers bonuses despite the company's failure to meet pre-set targets.

The ABI issues an "amber top" notice when it believes a company has deviated from best corporate governance practice.

ABI members account for around 20 percent of investments in the London stock market.

One of Shell's 10 largest institutional investors said it had already voted against the plan.

"We have voted against the company's remuneration report mainly because discretion seems to have been applied without any justification - there seems to be no control over remuneration," said an official at the group, who spoke on condition of anonymity.

"I think there will be a significant vote against the company -- possibly 30-40 percent," the official said.

Sarah Wilson, chief executive of Manifest, an independent governance and proxy voting agency, also criticised Shell's remuneration report, which will be put to investors at the oil major's Annual General Meeting later this month.