ISS backs Rolls-Royce plan to nearly double CEO incentives

April 9 (Reuters) - Rolls-Royce RR.L has won support from proxy adviser Institutional Shareholder Services (ISS) for a remuneration policy that would nearly double the British aerospace and defence firm's CEO pay opportunity.

Here are details on ISS' recommendation and the pay proposal:

• In a report dated March 27, ISS recommended Rolls-Royce investors approve the company's pay proposals ahead of its shareholder meeting at the end of April, citing the company's "exceptional performance" since Chief Executive Tufan Erginbilgic joined in January 2023.

• Under the proposed remuneration policy, Rolls-Royce plans significant increases in Erginbilgic's variable pay, including raising the maximum annual bonus to 300% of salary from 200% and increasing long-term incentive awards to 750% from 375% of base salary.

• ISS said Rolls-Royce's share price return under Erginbilgic had reached 1,100% and that 88 billion pounds ($118.12 billion) of shareholder value had been created as of December 31, 2025.

• Erginbilgic's total compensation in 2025 was 4.7 million pounds ($6.31 million), according to the company's latest annual report.

• However, ISS cautioned that it would keep Rolls-Royce's pay arrangements "under review" in future years due to the significant increase in remuneration opportunity, while noting that variable pay remains linked to financial and market-based performance metrics.

($1 = 0.7450 pounds)