Hi Tom,
That shading is perfectly normal.
When you use Shade Smooth, the Shading Normals are interpolated between the Face Normals.
If you look at the Vertex Normals, that are ‘halfway’ between the connected Faces, you can see that the Faces near the top of that flat backside, have a rather different angle than the lower ones, so the Shadig Normals (use when Shade Smooth) are differnt near the top:

Sorry, not the best visual representation.