Rolls-Royce has appointed a private equity partner and former BP executive to succeed Warren East as the company’s chief executive.
Engineering group FTSE 100 said on Tuesday that Tufan Erginbilgic would take up the job early next year.
Erginbilgic, 62, is a partner at Global Infrastructure Partners, a private equity firm that focuses on large-scale investments in infrastructure companies. He spent more than 20 years at BP, including five in its management team, and led the refining and marketing division before leaving the oil company in 2020.
Rolls-Royce has been looking for a new boss since East announced in February that he would leave the group at the end of the year.
The coronavirus pandemic has grounded most of the world’s airline fleet and hit Rolls-Royce, whose engines power jumbo jets. In 2020 it embarked on a massive restructuring plan to cut 9,000 jobs and had to shore up its balance sheet with £7.3bn of new equity and debt.
By choosing Erginbilgic, Rolls-Royce continued its practice of going outside the organization to fill its management positions. East was previously chief executive of chipmaker Arm Holdings.
Anita Frew, chairman of Rolls-Royce, told the Financial Times in an interview last month that she did not consider aerospace experience a must for a new chief executive. The successful candidate must be “someone who is used to a large, complex, global industrial enterprise,” she said. “I don’t think it’s necessarily aerospace. The board doesn’t think it should be aerospace.
The relatively unknown Erginbilgic will have to bring Rolls-Royce back to full financial health and deal with the threat decarbonization poses to a business built on engines powered by petroleum products. Under East, the company invested in electric planes and small modular nuclear reactors.
Deutsche Bank analysts said the news was “neutral to positive” for the group as it clarified leadership issues at the helm. While Erginbilgic had “limited experience in aerospace, he appears to be a seasoned industry professional with a wealth of experience in delivering strong profitability improvement,” they added.
Rolls-Royce shares, which have fallen 27% since the start of the year, were little changed on Tuesday morning at 92.5p.
Erginbilgic, who has dual British and Turkish nationality, will receive a base salary of £1.25 million, 30% of which will be paid in deferred shares for two years.
Frew said Tuesday that Erginbilgic was a “proven leader of winning teams in complex multinational organizations, with an ability to drive a high performance culture and deliver results for investors.”
“He has extensive strategic and operational experience and a solid understanding of security-critical industries, including aerospace, as well as the business challenges and opportunities presented by the pursuit of low-carbon technologies,” he said. -she adds.
Erginbilgic said it was determined to “build a platform for growth in order to create value for all stakeholders”.
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