BG Group revises Chief Exec remuneration package

1 December 2014

BG Group revises Chief Executive remuneration package

Following extensive shareholder consultation, the BG Group Board and Helge Lund wish to respond to BG Group shareholder concerns. The Company today announces revisions to the remuneration package for its new Chief Executive, Mr Lund.

The revised package brings all elements of Mr Lund's remuneration within the Company's remuneration policy approved by shareholders in May 2014. This removes the need for shareholder approval for the conditional award of shares previously proposed for Mr Lund.

The conditional share award will no longer be made. Instead, Mr Lund will be granted an initial award of shares under the Company's Long Term Incentive Plan (LTIP), with a face value equal to £10.6 million, which will be subject to Company performance conditions.

These conditions are expected to comprise a combination of relative Total Shareholder Return, cash flow and capital efficiency measures. Any changes made to the structure of the LTIP will remain within the Company's remuneration policy and the Company will consult further with shareholders before they are finalised.

This revised package reduces the expected value of Mr Lund's initial share award from approximately £10 million to approximately £4.7 million.

* * * *

After an extensive global search, the Company announced the appointment of Mr Lund as Chief Executive and an Executive Director of BG Group on 15 October 2014, with a start date of 2 March 2015.

The Board believes that Mr Lund is an exceptional candidate, with the necessary skills and experience to lead BG Group and it is clear from the extensive consultation with shareholders over the past few weeks that this view is widely shared.

However, a significant number of shareholders questioned the structure of the package, in particular whether it was appropriate to go outside the remuneration policy approved by shareholders earlier this year.

Both the Board and Mr Lund recognise and wish to respond to shareholder concerns. The Board welcomes the active and constructive role played by Mr Lund in revising the remuneration package so that all elements fall entirely within the Company's current policy.

The initial LTIP award will be made after Mr Lund starts work at BG Group, and will be in addition to an annual LTIP award. Mr Lund has indicated that he still intends to hold any shares that vest to him (net of tax) for the duration of his employment with the Company.

The changes mean that 62% of Mr Lund's remuneration package in the first year, on an expected value basis, will now be subject to quantitative Company performance criteria.

As a result of these changes, at the General Meeting convened for 15 December 2014, the Company intends to withdraw the previously proposed ordinary resolution to approve the conditional share award. Consequently, Mr Lund has waived his right not to join the Company.

-ends-

Notes to Editors:

Chief Executive remuneration

All elements of Helge Lund's employment contract are within the policy approved by shareholders, and the principal terms are as follows:

· A base salary of £1.5 million, fixed for the first five years of employment;

· An annual cash payment in lieu of pension equivalent to 30% of salary, also fixed for the first five years of employment;

· A short term annual cash incentive worth 100% of salary for target performance with a maximum payment of 200% of salary;

· An initial LTIP grant with an expected value on award of approximately £4.7 million, and a face value of £10.6 million;

· An annual LTIP grant with a face value on award of up to £9 million (6 times salary) and, for 2015, an expected value of up to £4 million;

· All LTIP awards made to Mr Lund are subject to quantitative Company performance conditions measured over a three-year period. Any shares that vest at the end of the performance period must be held for a further two years;

· Mr Lund has indicated that he intends in any event to hold all shares that vest to him (net of tax) for the duration of his employment with the Company;

· A one-off relocation allowance up to a maximum net value of £480,000;

· A 12 month notice period, with a right for the Company to make a payment in lieu of notice equal to 130% of salary on termination of the contract (being 12 months' salary and 30% pension payment); and

· A one-off buy-out of forfeited variable Statoil pay in BG Group shares up to a maximum of £3 million and which is currently valued at £1 million.

About BG Group

BG Group plc (LSE: BG.L) is a world leader in natural gas, with a broad portfolio of business interests focused on exploration and production and liquefied natural gas. Active in more than 20 countries on five continents, BG Group combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves.

For further information visit: www.bg-group.com

There are matters set out within this announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from these forward-looking statements, refer toBG Group's Annual Report and Accounts for the year ended 31 December 2013. BG Group does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

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