Shell will ramp up its dividend and share buybacks while keeping oil output steady into 2030, it said on Wednesday, as CEO Wael Sawan moved to regain investor confidence that wavered over its energy transition plan.
In a new financial framework announced ahead of an investor conference in New York starting at 1230 GMT, Shell said it will increase overall shareholder distribution to 30% to 40% of cash flow from operations from 20% to 30% previously.
That includes a 15% dividend boost and an increase in the rate of its share buyback programme from the second quarter to US $5 billion from US $4 billion in recent quarters.
The financial framework is the linchpin of Sawan’s effort to boost Shell’s share performance relative to its U.S. peers after many investors shunned the British company even after it posted a record US $40 billion profit last year.
The group has faced concerns that it was shifting away from oil and gas at a time of booming energy prices while returns from its growing renewables and low-carbon businesses remained poor.
“Performance, discipline, and simplification will be our guiding principles,” Sawan, who took office in January, said in a statement.
“We will invest in the models that work – those with the highest returns that play to our strengths.”
The dividend increase, to around 33 cents per share, is the sixth since Shell slashed its then 47 cent dividend by nearly two-thirds in April 2020, the first cut since the Second World War, in the wake of the COVID-19 pandemic.
The higher payout ratio will make keep Shell “competitive with peers”, RBC analy
