Rolls-Royce is planning to award each staff member with shares valued at around £700 as a result of the company’s recovery.
The major engineering company stated in a private message that it would give 150 shares to each of its 42,000 employees around the globe.
The announcement follows the Derby-based company’s report of profits totaling £1.1bn in the first half of this year, nearly twice the amount earned during the same period in 2023.
This is the initial instance Rolls-Royce will be granting shares to its employees, to be distributed in September.
The company is anticipated to incur roughly £30m in costs due to the move. UK employees must hold onto their shares for three years before being able to sell them, at which point they become taxable, unless they are kept for a total of five years.
“The company attributed our strong first half results and progress in our transformation to the dedication and effort of our employees,” said in a communication with staff.
The Covid pandemic dealt a severe blow to Rolls-Royce, leading to a significant drop in worldwide air travel and severely affecting the company’s commercial aerospace division that manufactures and maintains jet engines.
The CEO, Tufan Erginbilgic, initiated a transformation program last January shortly after he was appointed, referring to the struggling company as a “burning platform” and warning employees that they had a final opportunity to make changes.
Rolls-Royce, employing 21,000 individuals in the UK, revealed intentions in October to cut 2500 positions worldwide in order to enhance the company’s efficiency.
Participate in the achievement of success.
Following the changes, the company’s luck has turned around, as its recent resurgence led to a record high share price of 501p on Thursday, due to the company raising its profit forecast and reintroducing its dividend for the first time since the pandemic.
The hard work you and our joint efforts have made it possible to achieve these results. You are creating an impact. Mr. Erginbilgic emphasized the importance of employees sharing in the company’s success in the memo, as reported by the Financial Times.
The former BP executive stated that they are offering the chance for individuals to own a portion of Rolls-Royce.
We aim to acknowledge your input to our upcoming achievement and compensate you for the part you will have in it.
Mr. Erginbilgic will not be granted the stock awards.
Investment director at AJ Bell, Russ Mould, praised Rolls-Royce for accomplishing “an extremely remarkable recovery that will not be easily forgotten”.
He noted that it is rare for a company of its size to achieve such impressive share price growth, highlighting Rolls-Royce’s remarkable turnaround from a significant decline.
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