Dec 10, 2021
Royal Dutch Shell Plc shareholders approved the relocation of the company’s headquarters to London from The Netherlands, a move that will help it to boost returns while transitioning to clean energy.
A “resounding” 99.8% of votes cast by investors were in favor of the proposal, Shell Chairman Andrew Mackenzie said in a statement on Friday. Shell’s board still needs to hold a meeting to give final approval to the decision. The company expects the process to be completed in early 2022.
The proposal required approval from 75% of investors. The resolution also drops “Royal Dutch” from the company name, because Shell expects it will no longer meet the conditions for using the honorary designation.
Shell’s current dual-listing has existed since the unification of Royal Dutch and Shell Transport & Trading Co. in 2005, an arrangement the company says was never envisaged to be permanent. A key drawback of this structure is that share buybacks are subject to a withholding tax in The Netherlands and not in the U.K. Until now, Shell has only repurchased stock in London, limiting the volume it can acquire at a given time due to lower liquidity and market-abuse regulations.
Shell has pledged to give investors $7 billion of the proceeds from the sale of its Permian shale oil fields in the form of buybacks. Adopting a single line of shares traded in London will “facilitate the most efficient way of returning cash to our shareholders,” Chief Financial Officer Jessica Uhl said at the meeting. “We’ll have greater ability to execute share buybacks” as quickly as possible and at the lowest cost, she said.