Rolls-Royce Board changes

Thursday, 30 September 2010

Rolls-Royce, the global power systems company, announced today that Sir John Rose will retire from the company at the end of March 2011. He will be succeeded by John Rishton, currently Chief Executive of the Dutch retail group Royal Ahold. John Rishton has been a non-executive director of Rolls-Royce since 2007 and chairs the Audit Committee.

Sir John Rose has been Chief Executive since 1996, having joined the company in 1984.

Sir Simon Robertson, Chairman of Rolls-Royce, said of him:

“John has led a transformation in Rolls-Royce which has few parallels. As he would be the first to point out this has been a team effort, but it has been his leadership, strategic vision and tenacity which has made this extraordinary achievement possible. With John at the helm, the Group has developed into a truly global company, it has built a powerful portfolio, and constructed a platform from which we expect revenues to double in the decade ahead. This presents a tremendous opportunity which I know John Rishton and the rest of the management team will take forward.

“Since joining the Board John Rishton has gained a deep understanding of Rolls-Royce and established an excellent relationship with the management team. He has a proven track record as a Chief Executive of a global company and has a background in aerospace and manufacturing. He was the unanimous choice of the Board and I am certain will do an outstanding job at Rolls-Royce.”

Sir John Rose joined Rolls-Royce in 1984, and became a Board member in 1993 before being appointed Chief Executive. He said:

“It has been my great good fortune to work for Rolls-Royce for the past twenty six years, and to have been its Chief Executive for nearly fifteen. The success of Rolls-Royce is founded on teamwork and technology. The people in this extraordinary company have my deepest admiration and it has been a tremendous privilege to work with them. Rolls-Royce has earned the opportunity to grow and to prosper in the coming years. John Rishton is an excellent choice, and I wish him and all my many other friends and colleagues in the company well.”

Before joining Royal Ahold in 2006, John Rishton was Chief Financial Officer of British Airways for four years. He has also held senior positions at the Ford Motor Company. He said:

"Rolls-Royce is an outstanding company which I have come to know well since joining the Board. It has a tremendously strong executive team which has been led with distinction by John Rose. I feel extremely proud and excited by the opportunity to take the strategy forward and to lead Rolls-Royce into its next phase of development.”

Ian Strachan, who is a non executive director of Rolls-Royce, will replace John Rishton as Chairman of the Audit Committee on an interim basis. A permanent Chairman to the Audit Committee will be appointed in due course.

  1. Rolls-Royce, a world-leading provider of power systems and services for use on land, at sea and in the air, has established a strong position in global markets - civil aerospace, defence aerospace, marine and energy.
  2. As a result of this strategy, Rolls-Royce today has a broad customer base comprising more than 600 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces, more than 2,000 marine customers, including 70 navies, and energy customers in nearly 120 countries, with an installed base of 54,000 gas turbines.
  3. Rolls-Royce employs over 39,000 skilled people in offices, manufacturing and service facilities in 50 countries. The Group has a strong commitment to apprentice and graduate recruitment, and to further developing employee skills.
  4. In 2009, Rolls-Royce invested £864 million on research and development, two thirds of which had the objective of further improving the environmental aspects of its products, in particular the reduction of emissions.
  5. Annual underlying revenues were £10.1 billion in 2009, of which about half came from services revenues. The firm and announced order book stood at £58.4 billion at 30 June 2010, providing visibility of future levels of activity.
  6. John Rishton will join Rolls-Royce under similar terms and conditions as Sir John Rose. These comprise a base salary of £850,000 and a maximum bonus entitlement of 135% which may be increased by 20% to reflect exceptional personal performance. He is also eligible to receive an annual grant of performance shares under the Rolls-Royce Performance Share Plan which would equate to a maximum of 120% of base salary. The proportion of these shares released after a 3 year performance period would depend on the extent to which profit, cash and total shareholder return (TSR) performance conditions were met.
  7. John Rishton will receive pension benefits consistent with standard Rolls-Royce terms and conditions for senior executives based on 38% of salary. In addition to his remuneration package he will receive a special grant of shares in Rolls-Royce intended to mirror the fair value and vesting profile of the incentives forfeited on resigning from his current employer. The fair value of these shares is currently assessed as £2.8 million, attributed 56%/44% to performance and restricted shares respectively. These proportions mirror his existing arrangements.
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