Rolls-Royce workers receive £100m windfall early after taking 10% pay delay from April
- Nearly 50,000 staff at the engineer had 10 per cent pay deferred from April
- It made the payout on Christmas Eve, bringing it forward by three months
Rolls-Royce workers have received a £100million windfall after the beleaguered firm honoured a promise to pay up a portion of salary sacrificed in the heat of the Covid crisis.
Nearly 50,000 staff at the engineer had 10 per cent pay deferred from April until the end of the year as it conserved costs to ride out the pandemic.
The company confirmed to The Mail on Sunday that it had made the payout on Christmas Eve, bringing it forward by three months.
Nearly 50,000 staff at engineer Rolls-Royce had 10 per cent pay deferred from April
The payment will help lift morale at the troubled 136-year-old firm, which cut 5,500 jobs this year and saw workers at its Barnoldswick site in Lancashire go on strike.
Around 120 senior employees, including chief executive Warren East, suffered an additional 10 per cent cut which will not be repaid.
For East this means his salary for 2020 was reduced to £872,737. From January, he will return to full pay. There will be no pay increases for board members in 2021.
The Mail on Sunday has revealed a string of bosses in hard-hit industries had quietly hiked their pay back up after similar cuts, including easyJet chief executive Johan Lundgren and Wetherspoons founder Tim Martin.
The cuts at Rolls-Royce were part of plans to save £750million in 2020. It also raised £2 billion from shareholders.
But the return to full board pay could raise questions with the firm still reeling from the Covid crisis. Its aviation contracts rely on servicing plane engines and the collapse in air travel has hit it hard.
A Rolls-Royce spokesman said the cuts had been ‘to conserve cash as we dealt with the immediate and dramatic impact’ of the pandemic.
‘This has been an extremely difficult year for everyone connected with Rolls-Royce, but we promised all our employees that we would reverse the salary deferral by March next year.’
East told The Mail on Sunday earlier this month that it had been a ‘rough’ year after taking the decision to axe 9,000 jobs by the end of 2022.
He said he was ‘very aware of the human side of it’ and cuts meant ‘more than 5,500 lives’ in towns such as Barnoldswick had been impacted.
But he said: ‘You have to balance that against the remaining 44,000 people.
‘If you don’t make the business work, there won’t be any jobs for any of them.’