While conflict in the Middle East pushes global energy markets into turmoil and local fuel prices climb, Shell chief executive Wael Sawan has secured a 60 percent pay increase, pushing his total compensation to £13.8 million (approximately KES 2.7 billion).

This windfall, revealed in Shell’s 2025 annual report, arrives despite a 22 percent contraction in the company’s annual profits. It underscores a widening divide between corporate executive rewards and the volatile energy reality facing consumers, particularly in import-dependent economies like Kenya, where erratic fuel costs continue to drive inflation and stifle economic growth.

The Anatomy of a Corporate Windfall

The compensation package for Wael Sawan, who assumed the chief executive role in 2023, represents a sharp escalation from the £8.6 million (approximately KES 1.67 billion) he received in 2024. According to the company’s disclosures, this increase is primarily driven not by base salary, but by performance-related share awards.

Sawan’s remuneration is structured to heavily incentivize long-term performance targets, a common but contentious practice in the global energy sector. The 2025 package breakdown includes:

• Fixed salary, benefits, and pension contributions: £1.9 million (approximately KES 370 million).
• Annual performance bonus: £2.7 million (approximately KES 526 million).
• Long-term share awards: £9.1 million (approximately KES 1.77 billion).

This is the first fiscal year in which Sawan’s pay reflects a full cycle as chief executive, as share awards are subject to three-year vesting periods. While the board maintains that these figures are aligned with the company’s long-term strategic refocus toward fossil fuels, the optics of such a significant raise during a period of falling profitability have drawn intense scrutiny from shareholder advocacy groups and retail investors alike.

A Declining Profit Trajectory

The paradox of rising executive pay amidst shrinking corporate earnings is not lost on financial analysts. Shell reported adjusted annual earnings of $18.5 billion (approximately KES 2.9 trillion) for 2025, a significant decline from the $23.7 billion (approximately KES 3.7 trillion) reported in 2024. This marks the third consecutive year of falling profits for the energy giant, which had seen its revenues skyrocket to nearly $40 billion (approximately KES 6.2 trillion) during the peak of the 2022 energy crisis.

The company attributes the downturn to weaker global oil prices over the last year. However, the disconnect between the bottom-line performance and the chief executive’s compensation package raises fundamental questions about the key performance indicators (KPIs) utilized by the remuneration committee. Critics argue that rewarding leadership with millions in stock while company profits decline creates a misalignment of interests, shielding executives from the very market volatility that impacts the company’s operational success and the financial wellbeing of its stakeholders.

The Global Geopolitical Shadow

The controversy surrounding Sawan’s pay is amplified by the precarious state of global energy security. On Thursday, oil prices briefly surpassed $100 per barrel as widespread conflict in the Middle East—specifically involving strikes on energy facilities—created fears of supply chain disruptions. This price spike occurred in the immediate aftermath of a government-ordered release of reserves by the International Energy Agency, an attempt to stabilize markets that appears to have had limited immediate impact.

For global energy conglomerates, these geopolitical tensions create a dual-edged sword. While supply scarcity can theoretically drive up commodity prices, the resulting instability and the associated risk premiums also threaten long-term investment viability. Observers note that as energy giants like Shell navigate this landscape, the focus often remains on short-term stock appreciation rather than sustainable energy transitions or price stability for the end consumer.

The View from Nairobi: Cost of Living Implications

For the average reader in Nairobi, the headlines regarding Shell’s executive compensation are more than just corporate gossip they are a grim reminder of the structural inequities in the global petroleum value chain. Kenya remains a net importer of refined petroleum products, and the nation’s economy is acutely sensitive to global crude price fluctuations. When global oil prices surge due to geopolitical conflicts—such as the current situation in the Middle East—the impact is felt instantly at the pump in Kenya.

The Energy and Petroleum Regulatory Authority in Nairobi frequently adjusts retail fuel prices in response to these global benchmarks. Consequently, the rising profits and executive bonuses of major international oil companies are effectively underwritten by the inflated transport and energy costs paid by Kenyan households. When transport costs rise, the cost of basic commodities follows, compounding the inflation crisis that has already strained household budgets across the country.

Economic experts at the University of Nairobi emphasize that this creates a cycle of dependency where Kenyan consumers are essentially "price takers" in a global market, with little leverage against the volatility driven by the strategic decisions and remuneration policies of major energy firms. While Shell shareholders may prioritize dividends and stock growth, the socio-economic reality in emerging markets necessitates a more nuanced approach to corporate earnings and pricing stability.

Governance and Accountability

The reaction from pay campaigners has been swift, with many arguing that the public is unlikely to view such a generous package favorably when energy costs remain a primary driver of global inflation. As Shell moves forward, the pressure is mounting on its remuneration committee to justify the decoupling of executive rewards from the company’s annual profit performance.

The current structure of long-term share awards, while designed to foster retention and strategic consistency, is increasingly being challenged as a tool that rewards executives regardless of the immediate economic environment. As Shell continues its refocus on fossil fuel assets, the company must balance its commitment to shareholders with its social license to operate in an increasingly cost-sensitive world. Whether this executive pay strategy survives the next annual general meeting remains a critical point of tension for the firm.