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Rolls-Royce Holdings is to hand its chief executive a multimillion-pound annual pay boost, even as he nears one of Britain’s most lucrative ever public company payouts after overseeing a spectacular revival of the industrial manufacturing group.
Sky News has learnt that Rolls-Royce’s board has concluded a consultation with leading shareholders on a radical overhaul of its remuneration policy.
The proposals, which have been endorsed by top investors, will see Tufan Erginbilgic’s annual bonus entitlement increase from two times to three times his base salary of about £1.2m.
The revamped scheme will also see his long-term incentive award will double from a maximum of 375% of salary to 750% – making it one of the richest such rewards programmes offered by a FTSE-100 company.
Under the plans, Mr Erginbilgic’s overall package of salary, annual bonus and LTIP award will rise to a maximum of more than £13m.
Mr Erginbilgic, who joined Rolls-Royce at the beginning of 2023, has engineered a stellar recovery for the company, which had been left fighting for its survival after the COVID pandemic brought global aviation to a near-standstill.
He described the company, which supplies engines for the world’s leading airlines and is playing a key role in the development of small modular reactors as a source of new nuclear power, as “a burning platform” and said it had been poorly managed.
City sources said this weekend that the recent announcement of a change of leadership at BP, where Mr Erginbilgic used to work, had highlighted to the Rolls-Royce board the risks of losing him to another blue-chip corporate job.
Paradoxically, however, Mr Erginbilgic is likely to earn far less under the new pay policy than he will have done under its existing one.
That is a function of the scale of the stock awards handed to him when he joined Rolls-Royce, with its share price in the doldrums.
He was given 8.3 million shares – which at the time were worth £7.5m, and are…
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