Tufan Erginbilgic, the CEO of Rolls-Royce, has experienced a significant reduction in his pay by nearly £10m, despite his successful turnaround of the FTSE 100 heavyweight.
The Derby-based company's latest financial year saw Erginbilgic pocketing £4.1m, a stark contrast to the £13.6m he earned in the previous 12 months, as reported by .
His earlier remuneration was inflated by a £7.5m compensation for earnings lost from a former job.
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Another factor contributing to the drop was the decrease in Erginbilgic's annual incentive plan earnings, which fell from £4.6m to £2.5m. Rolls-Royce has now introduced a changed separate bonus and long-term incentive plan scheme for its CEO, with the first LTIP not due to vest until the end of 2026.
In 2023, his hefty pay package placed him as the third highest earning FTSE 100 CEO, trailing only Astrazeneca's Pascal Soriot and Relx's Erix Engstrom.
However, Erginbilgic's base salary did see an increase, rising from £875,000 to £1.1m over the year, with a further five per cent hike planned 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. 海角视频 companies must be able to attract excellent talent and reward them when they deliver.”
The Turkish businessman joined Rolls-Royce in July 2022 and assumed his role at the start of 2023, following a two-decade stint at BP that ended in 2020.
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Since succeeding Warren East as Rolls-Royce's chief executive, Erginbilgic has seen the company's share price soar from approximately 150p to over 800p.
A substantial portion of this surge occurred recently – jumping from around 610p to its current level – in the wake of the defence summit in London, where European leaders expressed their support for Ukraine and committed to increasing defence spending.
Rolls-Royce CEO helps make ‘impressive progress’
At the culmination of February, City AM disclosed that Rolls-Royce had decided to restart dividend payments to its shareholders and announced a bold £1bn initiative for repurchasing shares after reporting annual profits that exceeded market forecasts. Rolls-Royce's CEO hailed for spearheading 'impressive progress'.
In the company's annual report, remuneration committee chair Lord Jitesh Gadhia was quoted praising the leadership team's accomplishments: "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."
He elaborated on the future targets, saying, "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."
Lord Gadhia also emphasised the importance of incentivising management: "We are determined to incentivise the management to build upon the progress made and maintain momentum."
To ensure ongoing success, he underlined the critical need for focus from the company's leaders: "Success will require continued and intense focus from management to embed the transformation and deliver a sustained cultural shift in performance."