Rolls-Royce cancels bonuses for employees forced out after scandal

LONDON (Reuters) - Rolls-Royce (RR.L) said it has cancelled the bonus payments of employees who were forced to leave the aero-engine maker during an internal investigation into its bribery scandal.

The company, which reported a record annual loss last month, agreed a 671 million pound (673.3 million pounds) settlement in January after lengthy investigations into bribery at the company between 1989 and 2013.

In its annual report, published on Thursday, Rolls-Royce said its provisions for "clawback" of pay - introduced in 2014 to allow the company to reclaim bonuses from executives caught up in allegations including bribery or corruption - came after the "relevant period" of the bribery investigation.

However, it said that employees that left as a result of the internal investigation would not receive their bonuses.

"In cases where employees have been dismissed or resigned as a result of Rolls-Royce's own internal investigation, shares and incentives have been cancelled in full," Rolls-Royce said in its annual report.

No current member of the Rolls-Royce board was involved in the scandal, and Chief Executive Warren East was appointed in 2015 to restructure the company.

The annual report said that East would receive a 2 percent salary increase, in line with a rise for other employees.

No other executive directors would receive increases and all salary increases for management have been delayed until September, it said.

($1 = 0.8204 pounds)

(Reporting by Alistair Smout; Editing by Susan Fenton)