Rolls-Royce Gifts Every Employee a Substantial Amount in Shares

Rolls-Royce is set to distribute more than £700 worth of shares to each of its employees, following a notable rebound in its business. This resurgence has allowed the company to raise its profit guidance and resume dividend payments for the first time in five years.

Chief Executive Tufan Erginbilgic announced that the engine maker would grant 150 shares to “every colleague, in every part of our organisation” in September. This generous move comes on the heels of the company’s strong half-year results, which included the reinstatement of a dividend for the first time since the pandemic’s onset.

Investors, who had been urging Erginbilgic to restore the prized payout, welcomed the decision. Rolls-Royce, striving to become “more efficient and effective,” had cut 2,500 jobs globally in October. Despite the initial struggles during the pandemic, the company has recently experienced a significant resurgence, with share prices hitting an all-time high of 501p and financial challenges appearing to ease.

In a memo to employees, Erginbilgic commended their hard work and collective efforts: “These results have been made possible thanks to your hard work and our collective actions. You are making the difference. It is therefore important that you share in our success.” He elaborated on the reasoning behind gifting shares, emphasizing the company’s desire to recognize employees’ significant contributions to its future successes.

The CEO, who will not receive the shares, highlighted the crucial role of employees in the company’s turnaround, stating, “These results are thanks to your hard work. It is important that you share in our success. We want to recognize your contribution to our future success and reward you for the role you will play in it.”

Rolls-Royce may issue new shares or utilize stock held in its own treasury, as the company has flexibility in designing its share plans, granted by shareholders at its annual meeting. With a global workforce of just over 40,000 according to its latest annual report, the share awards are estimated to cost the group around £30 million.