The Royal Dutch/Shell Group on Thursday proposed tightening executive compensation policies to end the use of stock option grants. The plan, which must be approved by shareholders, would make the awarding of share bonuses to its directors dependent on the company’s performance.

The plan would make bonus payments contingent on the performance of the group’s shares compared with those of other major oil companies. Performance would be evaluated over three years. Executives also would be required to invest between 25-50% of their annual cash bonus in shares.

“These proposals are designed to reward performance that enhances the value of the group, and we believe they will serve shareholders well,” said Aarnout Loudon, chairman of the committee that made the recommendations.

The company noted that the new plan does not mean there would be an increase in directors’ pay. The final details are expected to be published in Shell’s annual report, expected in May.

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