Rolls-Royce CEO’s pay slashed by almost £10m despite rocketing FTSE 100 shares
The chief executive of Rolls-Royce, Tufan Erginbilgic, has seen his pay slashed by almost £10m despite transforming the fortunes of the FTSE 100 giant.
The CEO took home a pay packet of £4.1m for the Derby-headquartered group’s latest financial year, down from the £13.6m he received in the prior 12 months.
Erginbilgic’s previous remuneration package was bolstered by a one-off £7.5m he was given to compensate him for lost earnings from a previous job.
Also contributing to the fall was Erginbilgic’s earnings through the annual incentive plan going from £4.6m to £2.5m which was given until an old policy.
Rolls-Royce said it has now introduced a new separate bonus and long-term incentive plan scheme for its CEO.
His previous pay packet meant he was the third highest FTSE 100 chief executive in 2023 behind only Astrazeneca’s Pascal Soriot and Relx boss Erix Engstrom.
The chief executive’s base salary increased from £875,000 to £1.1m in the year and has been upped by five per cent for 2025.
A Rolls-Royce spokesperson said: “We delivered record results in 2024 thanks to our ongoing transformation, achieving our mid-term targets two years earlier than planned and enabling us to upgrade our guidance for 2028.
“It is in the interests of all stakeholders that such strong performance and progress is rewarded. UK companies must be able to attract excellent talent and reward them when they deliver.”
Rolls-Royce hired the Turkish businessman in July 2022 and started his role at the beginning of 2023.
He had previously spent more than 20 years at BP before leaving in 2020.
Since Erginbilgic succeeded Warren East at Rolls-Royce’s chief executive, the company’s share price has rocketed from around 150p to more than 800p.
A decent chunk of that rise has happened in recent weeks – from around 610p to its current level – following the defence summit in London, at which European leaders emphasised support for Ukraine and pledged to raise defence spending.
At the end of February, Morning Wire reported that Rolls-Royce had reinstated dividends and unveiled a £1bn share buyback programme as full-year profit comfortably beat expectations.
Rolls-Royce CEO helps make ‘impressive progress’
Writing in Rolls-Royce’s annual report, remuneration committee chair Lord Jitesh Gadhia said: “Tufan Erginbilgic and the executive team have delivered continued improvement in performance levels with impressive progress made on the group’s transformation, generating real value for shareholders.
“Achievement of the medium-term guidance will take Rolls-Royce significantly beyond any previously achieved level of financial performance and we are on track to deliver the commitments ahead of schedule.
“We are determined to incentivise the management to build upon the progress made and maintain momentum.
“Success will require continued and intense focus from management to embed the transformation and deliver a sustained cultural shift in performance.”