As part of the changes, the company will also end the dual share structure and will have only one share class. The group will bear the short name Shell Plc in the future. The company is expected to begin moving its headquarters from The Hague to London early next year.
“The simplification is designed to strengthen Shell’s competitiveness and speed up both the payment of money to shareholders and the strategy of becoming a zero-emission company,” the company said earlier. “The current complex equity structure is subject to constraints and may no longer be suitable in the long run.”
Shell is having a protracted dispute with the Dutch authorities over the 15% withholding tax applied by the Netherlands. The company tried to avoid it precisely because it had two classes of shares – each subject to a different taxation procedure for the payment of dividends. The relocation will solve this problem definitively.
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Relations with the Netherlands were also worsened by a report in October, when the largest pension fund in the Netherlands, ABP, announced that it would exclude from its portfolio the shares of all fossil fuel companies, including Shell shares.
The unification of the share classes will create a larger volume of ordinary shares, which Shell will then be able to repurchase more easily if it deems it appropriate. However, the company’s shares will continue to be traded on the stock exchanges in Amsterdam, London and New York.
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Shell, like other major oil companies in Europe, has set a goal of phasing out hydrocarbons to meet growing environmental demands. He lost a dispute with climate activists in the spring, and a court in The Hague ordered the company to reduce its global carbon emissions by 45 percent by the end of 2030 compared to 2019. The company plans to invest more in solar and wind energy, defending itself against the court verdict.
The company was also pushed by the Third Point hedge fund, which has a stake in Shell, to simplify its corporate structure. He argued, for example, that simplifying the corporate structure would mean that the company would be able to make higher profits and thus bring better results to shareholders. Third Point also suggested that Shell split into several smaller companies. In response, Shell’s management said that Shell’s business works better when all parts of the group are together.
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