Ger­man min­is­ter crit­i­cizes Volkswagen man­age­ment over bonuses

Enterprise - - International news -

Ger­many’s fi­nance min­is­ter Wolf­gang Schaeu­ble has crit­i­cized the ex­ec­u­tive board of scandal-rid­den car­maker Volkswagen for not waiv­ing bonuses de­spite bring­ing the com­pany to the brink of col­lapse.

“I have no sym­pa­thy for man­agers who first drive a large blue chip-listed com­pany into an ex­is­tence-threat­en­ing cri­sis and then de­fend their own bonuses in a pub­lic de­bate,” Schaeu­ble told Ger­man weekly Frank­furter All­ge­meine Son­ntagszeitung. “That shows that some­thing is not work­ing.”

Volkswagen plans to pay the 12 cur­rent and for­mer mem­bers of its man­age­ment board 63.24 mil­lion euros ($72.44 mil­lion) for 2015, a year when Europe’s largest car­maker posted a record loss due to le­gal and com­pen­sa­tion costs for cheat­ing diesel emissions tests.

The com­pany with­held a small part of bonus pay­ments but will award them later if cer­tain per­for­mance cri­te­ria are ful­filled, in­clud­ing a re­cov­ery of the Volkswagen’s share price.

The bonus pay­outs have sparked pub­lic out­rage in Ger­many and a spat within Volkswagen’s su­per­vi­sory board. Lower Sax­ony, VW’s sec­ond-largest share­holder, had called for ex­ec­u­tive bonuses to be scrapped or cut as Europe’s largest au­tomaker counts the multi-bil­lion-euro costs of “Diesel­gate.”

Jo­erg Bode, a for­mer su­per­vi­sory board mem­ber who had rep­re­sented Lower Sax­ony, told weekly Welt am Son­ntag that ex-CEO Martin Win­terkorn and his col­leagues should pay back the part of the bonuses that had been gen­er­ated by “cost cuts through fraud.”

Cur­rent su­per­vi­sory board mem­ber Bernd Oster­loh said that the car­maker should look be­yond con­trac­tual obli­ga­tions and that the man­age­ment board should vol­un­teer to cut their bonus pay­ments. “It is also about morals,” he said. Oster­loh also said that the su­per­vi­sory board should also dis­cuss changes to its own re­mu­ner­a­tion sys­tem once the diesel­gate scandal has been re­solved.

“As soon as busi­ness is back to nor­mal, we should think about chang­ing the (re­mu­ner­a­tion) sys­tem (of the su­per­vi­sory board),” Oster­loh was quoted by Welt am Son­ntag as say­ing.

A swift change to fixed salaries and abol­ish­ing vari­able pay com­po­nents tied to div­i­dends would be a wrong sig­nal as that would ef­fec­tively lead to a hike in re­mu­ner­a­tion, the Volkswagen labour chief told the pa­per.

Fol­low­ing its record 2015 loss VW had slashed its div­i­dend to 0.17 euros per pre­ferred share from 4.86 euros.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.