Shell announced the streamlining of their share structure on Monday which would see the removal of A/B share classes.
The energy giant said the move was necessary to facilitate simpler distributions back to shareholders and help the business transition to Net-Zero.
Shell will also now align its tax residence with the UK and now locate their CEO and CFO here.
Shell’s Chair, Sir Andrew Mackenzie, said: “At a time of unprecedented change for the industry, it’s even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system. A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy, while creating value for our shareholders, customers and wider society.”
Shell will remain listed in London as part of the proposals as well as keeping listings in Amsterdam and ADR access in New York.
“Shell’s proposed a change to the way it’s organised, eliminating its share classes and unifying its tax home to the UK. Ultimately, the new structure would be a net positive for shareholders as it will streamline the company and make it easier to manoeuvre moving forward,” said Laura Hoy Equity Analyst at Hargreaves Lansdown.
“Aside from the fact that the shares they hold will no longer come with a ‘Royal’ designation, this new alignment won’t change much for investors. The long-term growth story for Shell still rests heavily on the oil price. For now, buoyant oil prices are keeping the group’s cash coffers topped up, which has had a positive impact on debt and given the group the means to boost shareholder returns. However, with the inevitable shift to more sustainable energy picking up steam we suspect the need to invest in greener operations will keep a lid on what the group can pass on to shareholders.”