When Shell slashed its dividend by 66% on 30 April, it not only sent shock waves through financial and business communities throughout the world, it “tore up the industry’s financial playbook,” according to Laura Hurst at Bloomberg. Amid the chaos and damage churned up by the pandemic, what had long been unthinkable—the world’s largest supermajors ceasing to defend their dividends at almost any cost, given the importance of payouts to North American investors—suddenly became fact. The last time Shell had slashed its dividend coincided with World War II, nearly 80 years ago. Equinor also cut its dividend, and ExxonMobil froze its dividend for the first time in 13 years.
Asked whether the long-held strategy of sacred payouts to shareholders was sustainable in the current situation, Shell Chief Executive Officer Ben van Beurden said, “I would say, no.”
“I think a crisis like this has the potential to catalyze society into a different way of thinking,” van Beurden said.
https://pubs.spe.org/en/jpt/jpt-article-detail/?art=7079
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