Rolls-Royce Holdings is preparing to hand its chief executive, Tufan Erginbilgic, a multimillion-pound annual pay rise, Sky News has learned. The proposed overhaul could see his total annual compensation reach more than £13 million.
Details of the Proposed Pay Overhaul
The FTSE-100 engineering giant's board has consulted major shareholders on a radical revision of its executive pay policy. The plans, which have reportedly won backing from top investors, include significant increases to both short and long-term incentive schemes.
Mr Erginbilgic's annual bonus entitlement is set to rise from two times to three times his base salary, which is approximately £1.2 million. More dramatically, the maximum value of his long-term incentive plan (LTIP) award will double from 375% to 750% of his salary.
This revamped structure positions the Rolls-Royce reward package as one of the most lucrative among Britain's blue-chip companies. Combined, his salary, annual bonus, and LTIP could total over £13 million per year.
A Turnaround Justifying the Reward
The proposed pay hike follows what investors have described as a stellar corporate recovery engineered by Mr Erginbilgic since he joined in January 2023. He took the helm when the company was struggling for survival after the pandemic crippled global aviation.
Describing the company he inherited as a burning platform that had been poorly managed, he has overseen a remarkable transformation. Rolls-Royce's share price has soared from just 93.2p before his arrival to 1285.5p at Friday's close, boosting its market valuation to over £108 billion—a more than twelvefold increase.
The company is expected to report operating profit of £3.1bn to £3.2bn and free cash flow exceeding £3bn in its upcoming annual results.
Paradoxes and Shareholder Support
Despite the headline increase, Mr Erginbilgic is likely to earn less under the new annual policy than he has previously, due to the enormous one-off share award he received upon joining. He was granted 8.3 million shares then worth £7.5 million, which are now valued at roughly £107 million.
City sources indicate the board is keen to retain his world-class talent, a concern highlighted by recent leadership changes at BP, his former employer. Leading shareholders have expressed strong support for the new policy.
Stephen Anness, head of global equities at Invesco, a top-ten shareholder, stated: "We struggle to think of a more successful corporate turnaround and resulting value creation... this is the opposite of egregious pay for poor performance."
A Rolls-Royce spokesperson said the review was a "proactive measure" driven by the company's performance shift and the competitive market for talent. The revised policy will be put to a shareholder vote at the 2026 Annual General Meeting, with full details published in the annual report in March.
