Shell: Seeks Shareholder Approval to Change Articles to Implement a Simplified Structure

Royal Dutch Shell plc posted a circular which includes the notice of its GM, which can be viewed and downloaded from www.shell.com/gm. The Notice states that the GM is scheduled to be held at Rotterdam Ahoy, Ahoyweg 10, 3084 BA Rotterdam, the Netherlands at 10:00 (Dutch time) on Friday December 10, 2021.

• Shareholders are asked to vote on a special resolution to amend the Royal Dutch Shell plc Articles of Association to allow the simplification of the company’s structure
• Virtual and physical attendance and participation enabled for the General Meeting (“GM”)
• Shareholders encouraged to submit their proxies in advance of the GM, but voting is enabled during the meeting

Shell proposes simplified structure

• Proposal will establish a single line of shares to eliminate the complexity of Shell’s A/B share structure.
• Proposal will also align Shell’s tax residence with its country of incorporation in the UK, where it will hold Board and Executive Committee meetings, and locate its chief executive and chief financial officer.

THE HAGUE, November 15, 2021

The Board of Royal Dutch Shell plc (Shell) today announced a proposal to simplify the company’s share structure to increase the speed and flexibility of capital and portfolio actions. The simplification is designed to strengthen Shell’s competitiveness and accelerate both shareholder distributions and the delivery of its strategy to become a net-zero emissions business.

Shell’s Chair, Sir Andrew Mackenzie, said: “At a time of unprecedented change for the industry, it’s even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system. A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy, while creating value for our shareholders, customers and wider society.”

Under the proposal announced today, Shell intends to change its share structure to establish a single line of shares, which is simpler for investors to understand and value. The company will also align its tax residence with its country of incorporation in the UK.

Shell has been incorporated in the UK with Dutch tax residence and a dual share structure since the 2005 unification of Koninklijke Nederlandsche Petroleum Maatschappij and The Shell Transport and Trading Company under a single parent company. It was not envisaged at the time of unification that the current A/B share structure would be permanent.

A conventional single share structure will allow Shell to compete more effectively. It will:

• Allow for an acceleration in distributions by way of share buybacks, as there will be a larger single pool of ordinary shares that can be bought back. Following the start of a $2 billion buyback programme in July, Shell announced in September that it will return an additional $7 billion to shareholders following completion of the sale of its Permian assets in the United States.
• Strengthen Shell’s ability to rise to the challenges posed by the energy transition, by managing its portfolio with greater agility.
• Reduce risk for shareholders by simplifying and normalising Shell’s share structure in line with its competitors and most other global companies. The current complex share structure is subject to constraints and may not be sustainable in the long term.