Shell-BG deal: Investor warns BG over boss Helge Lund's possible multi-million payout

A leading City fund manager has called on energy firm BG Group, which earlier this week accepted a £47 billion takeover offer from Shell, to “exercise appropriate judgement” when it decides how much to pay to its outgoing chief executive.

Helge Lund, who joined the firm in February after being poached from Norway's Statoil, could walk away from the oil explorer with £25 million in pay next year if the tie-up completes as planned.

The 52-year-old Norwegian is expected to stay on for at least a year to help Ben van Beurden, Shell’s chief executive, shepherd the deal through.

Before this happens, BG’s remuneration committee, led by Sir John Hood, will meet to work out how large a pay-off Lund will receive.

Royal London Asset Management, which owns shares in both companies, urged BG not to repeat the mistakes it made when it handed Lund a £12 million “golden hello” last year.

This was watered down after investors and politicians expressed their anger.

Ashley Hamilton Claxton, corporate governance manager at Royal London, said: “Helge Lund was awarded an initial recruitment award of 1.1 million shares after joining the company in February.

“The rules set out that awards will become exercisable on a change in control, subject to performance. However the remuneration committee has the discretion to decide if they will pro-rate the award for time served.

“It is presumed that Mr Lund will leave the newly created company and we expect the remuneration committee to exercise appropriate judgement to pro-rate his initial recruitment award, given his short tenure.”

The warning came as advisers began a tour of investors to win approval for the deal.