Rolls-Royce will distribute shares worth approximately £700 to each employee, marking a significant recovery for the company. As reported by the Financial Times, the engineering giant announced in an internal memo that it would grant 150 shares to its 42,000 global workers. This announcement follows the Derby-based firm’s report of £1.1bn in profits for the first half of the year, a significant increase from last year’s £673m.
In a message to employees, Rolls-Royce attributed its strong performance and ongoing transformation to the dedication and efforts of its workforce. This will be the first time the company has awarded shares to employees, with the distribution set for September. UK employees will not be able to sell the shares for three years, after which they will be subject to taxes unless held for five years. The initiative is expected to cost the company around £30m, with CEO Tufan Erginbilgic not included in the share award.
The company, which produces jet engines, was severely impacted by the Covid pandemic, leading to a decline in global air travel and affecting its commercial aerospace business. Erginbilgic, a former BP executive, initiated a transformation program in January last year, urging staff to seize a “last chance” for change.
Rolls-Royce, which employs 21,000 people in the UK, announced plans in October to cut 2,500 jobs globally to enhance efficiency. The company’s recent revival has seen its shares reach a peak of 501p on Thursday, following an upgraded profit forecast and the reinstatement of its dividend for the first time since the pandemic.
In the memo, Erginbilgic acknowledged the hard work and collective efforts of employees, emphasizing the importance of sharing in the company’s success. Russ Mould, investment director at AJ Bell, highlighted Rolls-Royce’s impressive turnaround, noting its exceptional share price performance as a testament to its recovery from a challenging period.
