ROYAL Dutch Shell has defended the bumper pay rise awarded to chief executive Ben van Beurden, whose total earnings increased to €20.1 million (£17.8m) last year from €8.9m.

The annual report of the Anglo-Dutch oil and gas giant shows Mr van Beurden’s pay rocketed as a result of a dramatic increase in long term incentive awards.

The €15.2m earned in Long Term Incentive Payment awards was up from €4m in the previous year.

Mr van Beurden also earned a €3m bonus in both years. His salary rose to €1.53 from €1.49m.

The increase in his total earnings could fuel controversy about executive pay. Last year, more than a quarter of Shell investors voted against Mr van Beurden's pay at the group's annual meeting.

Luke Hildyard of The High Pay Centre said: “Shell epitomises the flawed governance model and warped corporate culture of modern big business.The huge incentive payments that make up most of this package have decreasing credibility with pay experts.”

He added: “It's ludicrous to think that chief executives who have climbed to the top of huge organisations need the lure of enormous bonuses to motivate them to do their jobs properly (and it would be deeply troubling if they did).”

However, Shell said it was "sensitive to the wider societal discussions regarding the level of executive pay", adding that it spent a significant amount of time discussing the payout.

Shell said its directors’ remuneration policy reflected the firm’s ambition to thrive through the transition to a lower-carbon energy.

The group said: "We reviewed Shell's CEO pay ratio externally against the ratios that we see in other FTSE 30 companies … We believe our ratio is consistent with those.”

Chief financial officer Jessica Uhl saw her total pay increase to €4.9 from €3m.

Shell posted a 36% increase in annual profits to a four year high of $21.4bn (£16.3bn) for 2018, up from $15.8bn.

Announcing the results in January Mr van Beurden said Shell was focused on growth in the North Sea. The company sold assets in the area and cut around 1,000 jobs amid the downturn triggered by the crude price plunge.

The company’s annual report shows Shell paid accountancy giant PwC £61,000 for advice on directors remuneration last year.

The auditor of the accounts, EY, was paid $53m.