Executive gravy train stalls
Companies don't come much bigger, grander or more putatively proper than Royal Dutch Shell.
So it is profoundly shocking that Shell's shareholders should yesterday have voted against the substantial remuneration paid to its directors.
Under governance rules, the vote is advisory only: it is non-binding. But it is a public-relations disaster for Shell.
It is a warning to every company that shareholders will not tolerate discretionary pay awards when performance targets are flunked.
What angered Shell's owners is that the oil giant gave top executives substantial numbers of shares under a long-term incentive plan plus bonus shares relating to another plan, even though the company missed an important target for the period 2006-8.
This discretionary award is worth £1.2m to the chief executive, Jeroen van der Veer, on top of pay and other bonuses worth around £4.5m.
Now, here are two striking facts.
First: back in 2005, Shell explicitly told shareholders that its remuneration committee reserved the right to make discretionary awards as and when the company only narrowly missed targets. If there was a stormy campaign of protest in response, I certainly didn't notice.
And perhaps more importantly: this is the second successive year that Shell has made this kind of discretionary award after flunking the target. However, 12 months ago, shareholders gave their overwhelming approval to the company's remuneration practices.
So what's changed in 12 months?
Surely, you don't need telling.
Global recession is leading to job losses and pay cuts for millions and millions of people.
Against that background, the feather-bedding of top executives who don't hit their targets is widely seen as intolerable.
And what's slightly odd is that the non-executives on Shell's remuneration committee, the grandees who made the discretionary award to Shell's top execs, seem to have been unaware of the public mood.
Some would argue that they may be dangerously out of touch. Although to be fair to them, they are no more out of touch than our own MPs, who initially showed so little sensitivity to the outrage sparked by the way they've been systematically milking their allowances.
The importance of the shareholder rebellion at Shell is that it is an extreme manifestation of a clear trend, which is that professional investment managers - who look after our savings - are intent on making their feelings known when they see executives rewarded for performance they see as inadequate.
So, for example, sizeable minorities of shareholders recently voted against the compensation practices at BP, Pearson and Xstrata.
And at Royal Bank of Scotland, a record-breaking 80% of shareholders voted against what it paid its top team - which was really just a scream of frustration about the doubling of the pension entitlement for Sir Fred Goodwin, the former chief executive widely blamed for hobbling the bank.
You might mutter about stable doors and horses - and you might note that these professional investment managers were hopeless at reining in corporate excess during the bubble years.
That said, the Shell vote is today reverberating in the boardroom of every big company. What the directors of substantial businesses can hear and feel is a great clanking and juddering as the gravy train of executive remuneration hits the buffers.