The National Association of Pension Funds (NAPF) told BBC News Online that it was close to publishing its report on corporate governance in preparation for Shell's Annual General Meeting (AGM).

The report include recommendations on how shareholders should vote on directors' pay packages at the AGM.

A spokesman for NAPF, which represents about 1,000 UK pension funds, said: "At this stage we are unlikely to be supportive."

Flawed packages

Shell's chairman Sir Philip Watts received a 55% jump in salary and bonuses for 2002, a total package of £1.8m which included a bonus of £874,000.

Last year, Shell reported a 23% fall in profits to $9.2bn (£5.9bn).

The price of its shares slid 14% last year.

Shareholders in the group, the world's second-largest publicly listed oil company, will vote at the AGM on April 23 to approve existing pay deals and on a new incentive scheme for directors.

The NAPF spokesman said the current bonus schemes proposed for directors, including the possibility of substantial bonuses, were not something they could endorse.

"The incentive scheme for directors has flaws in it," he told BBC News Online.

Shareholders in Shell, the world's second-largest publicly listed oil company, will vote at the AGM on April 23 to approve existing pay deals and on a new incentive scheme for directors.