Rolls-Royce recently announced that it had made profits of £1.1 billion in the first half of this year, almost double the profits it made in the same period in 2023. The company has decided to share the profits with its employees. Each of its 42,000 employees worldwide will receive 150 shares, currently worth around £700, or the equivalent of 3,500 złoty.
According to the BBC, this is the first time in history that Roylls-Royce, the second largest manufacturer of aircraft engines, has given shares to its employees. Information about the bonus was given to employees in internal correspondence. Each of the 42,000 employees, regardless of location, will receive 150 shares currently worth around 700 pounds, or 3,500 PLN.
The company previously announced it had recorded profits of £1.1 billion in the first half of this year, almost double the amount for the same period in 2023.
“Our strong performance in the first half and the progress we are making in our transformation were made possible by the hard work and performance of our employees,” the company said in a message to employees.
The move is expected to cost the company around £30m. Interestingly, UK employees will not be able to sell the shares for three years, after which they will be subject to tax unless the shares are held for five years.
First the low, then the bounce
Rolls-Royce has been hit hard by the Covid-19 pandemic, which has caused a sharp decline in air travel around the world. This has had a huge impact on the company’s commercial aviation business, which sells and services jet engines.
Tufan Erginbilgic, the chief executive, launched a transformation program in January last year shortly after his appointment. He described the struggling company as a “burning platform” and told employees at the time that they had “one last chance” to make a change.
Rolls-Royce, which employs 21,000 people in the UK, announced plans in October 2023 to cut 2,500 jobs globally to make the company “more efficient and effective”.
The company's fortunes have improved significantly since the changes were made, with its recovery in recent months seeing shares hit a record high of 501p on Thursday after it provided an updated profit forecast and reinstated its payout for the first time since the pandemic. dividends.
“These results were possible thanks to your hard work and our joint efforts. You make a difference. That is why it is important that you share in our success,” he told Erginbilgic employees in a memo first reported by the Financial Times. He added that “that is why we are giving you the opportunity to own a part of Rolls-Royce.”
“We want to recognize your contribution to our future success and reward you for the role you will play in it,” the president said. Interestingly, he himself will not receive a share award.
Russ Mould, chief investment officer at AJ Bell, told the BBC that Rolls-Royce had made “one of the most impressive turnarounds in living memory”.
“It is certainly unusual for a company of this size to be able to generate such a high share price return, but it just goes to show that Rolls-Royce was stuck in a very deep hole at one point and managed to get out of it,” he said.
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