Rolls-Royce names ex-bp veteran as £6m boss to revive jet maker

ROLLS-ROYCE’S new boss Tufan Erginbilgic could be paid up to £6m in his first year if he hits stretching turnaround targets at the industrial giant.

The jet engine maker has hired the former oil boss to replace Warren East as chief executive, once again looking outside the industry to find someone to reinvigorate the company’s fortunes. Mr Erginbilgic, 62, headed up BP’S downstream business, which refines and sells products including Castrol oil, petrol and chemicals.

While having a limited public profile, Mr Erginbilgic is known for growing businesses, having increased earnings at BP’S downstream business by $5bn (£4.1bn) during his six-year tenure leading the division. Mr Erginbilgic will start at Rolls-royce in January with a clear brief to improve the company’s performance and share price. The business is still reeling from the impact of the pandemic, which brought air travel to a halt and crushed revenues. Shares have lost about four fifths of their value since hitting a peak in January 2014.

Mr Erginbilgic is in line for pay and bonuses of £6.05m in his first year if he can deliver a profit higher than the board asks for. This has yet to be set, but it would mean earnings in 2023 of more than even the highest of analyst targets of £1.1bn, and he would also have to place the company’s share performance in the top quarter of the FTSE 100.

A final decision will be taken on his exact targets later this year. He will be paid a salary of £1.25m, 30pc of which will be paid in shares on a two-year lag. He will ultimately be expected to hold shares worth four times that, or £5m.

Mr Erginbilgic will be eligible to earn 220pc of his salary as a bonus but if he exceeds targets he can earn up to 385pc, delivering a total package worth £6.05m including his basic pay. Mr Erginbilgic has both Turkish and UK citizenship and is direct and driven, according to an insider.

Nick Cunningham, an aviation analyst at Agency Partners, said: “His top priority should be to get more orders for its jet engines for large airliners.”

Mr Erginbilgic said: “I am honoured to be joining Rolls-royce.”