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Rolls-Royce hires new chief executive; aims to end fossil fuel reliance

Story Highlights

Aerospace and defence company Rolls-Royce has appointed Tufan Erginbilgic as the new chief executive of the company. He will succeed Warren East and will take over the role in 2023, with an eye on reducing the company’s carbon footprint.

Rolls-Royce Holdings (GB:RR) announced Tufan Erginbilgic as the company’s new chief executive officer and executive director. He is expected to lead the way in transitioning the company away from fossil fuels.

Erginbilgic will join the company on January 1, 2023, from Global Infrastructure Partners, where he is a partner. Before this he was with BP (GB:BP) for around 20 years and left the company in 2020.

He will succeed Warren East, who announced his intention to step down in February this year. East was appointed as chief executive in July 2015.

Erginbilgic had a successful tenure at BP, and his last role before leaving the company was leading the downstream business. He transformed the business with better profitability and safe performance.

Erginbilgic will join the company at a base salary of £1.25 Million. He will receive 30% of his salary as shares deferred for two years.

Captain during turbulent times

East had led Rolls-Royce during a very unstable time. In his second year of joining, the company witnessed the biggest loss of £4.6 Billion in its history, including £671 Million of fines for bribery and corruption charges.

Another round of problems started when Rolls-Royce Trent 1000 and Trent 900 engines were found faulty and the repair costs hit the company hard by £2.4 Billion spread over 2017 to 2023. And then came the COVID pandemic, which created more financial troubles for the company with so many travel restrictions in place.

Rolls-Royce is in a much better position now with its restructuring programme and the lifting of travel restrictions. It generated a profit of £124 Million in 2021.

The new captain of the ship, Erginbilgic, said, “I am honoured to be joining Rolls-Royce at a time of significant commercial opportunity, and strategic evolution as its customers embrace the energy transition. I am determined to deliver the full potential of the market positions that the company has built over many years, through its engineering excellence and innovative technology, and to build a platform for growth in order to create value for all stakeholders.”

The company’s shares are trading down by 31.2% YTD and by 14.1% year-over-year.

View from the city

According to TipRanks’ analyst rating consensus, Rolls-Royce stock has a Hold rating. The stock has ratings from eight analysts, out of which five are Hold, two are Buy, and one is a Sell recommendation.

The average price target is 106.25p, with an upside potential of 21.6%. The analyst price targets range from a low of 70.2p to a high of 145.2p.


The new leader comes with experience in generating value for companies. The challenge now is to transition from a business based on fossil fuels to one based on zero carbon.


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