Rolls-Royce chief executive’s pay package falls by nearly £10m

Rolls-Royce boss Tufan Erginbilgic took a nearly £10 million reduction in his pay package in 2024, despite leading the engine-maker through a financial turnaround.

Mr Erginbilgic’s pay packet was £4.1 million last year, according to Rolls-Royce’s annual report, down from £13.6 million in 2023.

Most of the fall came from a £7.5 million share package he got after joining Rolls-Royce in 2023, to compensate him for leaving his previous job in private equity.

But the chief executive also saw his annual incentive package nearly halve, to £2.5 million.

The company said this was because of a change in the way its bonuses and incentives plans worked, and that Mr Erginbilgic will be entitled to more incentive payments relating to 2024 via shares in the following years.

The drop came as Rolls-Royce sales grew in 2024, while the FTSE 100 firm also recently upgraded its profit forecast for this year and said it would buy back about £1 billion of stock from investors.

The buyback is the first in 10 years at Rolls-Royce, which makes engines for commercial aircraft.

The company is also one of Britain’s largest military suppliers, making engines and power systems for large swathes of the military.

The results marked a significant turnaround for the UK manufacturing giant, which had suffered a torrid few years after the pandemic.

It was forced to raise emergency funding when the aviation industry ground to a halt during Covid-19 lockdowns.

Mr Erginbilgic joined in early 2023 and has since slimmed down the company, including cutting 2,500 jobs from its roughly 50,000-strong workforce.

He has also tackled ongoing supply chain issues which have hampered Rolls-Royce’s financials in recent years.

Rolls-Royce shares jumped 15% after it announced the results in February.

In its annual report, the company’s pay committee chairman, Lord Jitesh Gadhia, hailed the “impressive progress” during the year.

While his overall pay deal fell considerably, Mr Erginbilgic’s base salary rose about 30% to 1.1 million.

A Rolls-Royce spokesman said: “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.”