£23m payoff for VW boss behind scandal

‘Clearing the way for a fresh start’

The disgraced former chief executive of Volkswagen could walk away with a £20.8million pension pot on top of a £2.3million payoff.

Martin Winterkorn quit on Wednesday following the revelation that the firm rigged diesel engine emissions tests, but could still leave with the bulk of his pension.

Dr Winterkorn, who was one of europe’s bestr-ewarded bosses, received £11.7million in pay and perks last year.

According to Volkswagen’s annual report he may also receive two years’ salary or ‘severance pay’ if the reason for his departure was not his fault.

When he resigned he said he was ‘not aware of any wrongdoing on my part.’

The pension pot equates to annual payments of around £750,000.

Since the scandal engulfed VW, its shares have slumped by 30 per cent – wiping around £20billion from its value. News of the potential pension payout will further damage VW’s reputation. Critics compared it to the scandal that followed news of former Royal Bank of Scotland boss Fred Goodwin’s lucrative pension – after the State had intervened to bail out the bank he worked for.

In some instances companies have sought to claw back the pension pots of disgraced bosses. however, in many instances it has not been possible because of the complex contracts that prevent it.

Thomas Cook looked at options to retrieve payments made to its former chief executive Manny Fontenla-Novoa in 2011.

he received almost £15million pay over four years and walked away with a £1.1million payoff despite the holiday firm reporting heavy losses.

It is uncertain whether the 68-year-old Dr Winterkorn will get the full pension package because, says the annual report, ‘no severance payment is made if membership of the board of management is terminated for a reason for which the board of management member is responsible’.

however, he has insisted since his resignation that he was not personally involved in any ‘wrongdoing.’

The Volkswagen Group, based in Wolfsburg near hanover in northern Germany, declined to comment on the subject.

In his resignation statement Dr Winterkorn said that he accepted his ‘responsibility for the irregularities that have been found in diesel engines,’ but he insisted ‘I am not aware of any wrongdoing on my part.’

he said: ‘Volkswagen needs a fresh start – also in terms of personnel,’ and added. ‘I am clearing the way for this fresh start with my resignation.’

Investors appeared to agree, with VW shares shooting up 7.9 per cent on the news of his departure.

The steering committee of the VW group’s supervisory board expressly said in its own separate statement that Dr Winterkorn ‘had no knowledge of the manipulation of emissions data’.

Rumours of potential successors have circulated widely in German media and it is likely the new boss will come from one of the brands that make up the group – which include Porsche, Audi, Seat and Skoda as well as VW.

Three frontrunners are being touted as candidates to take Dr Winterkorn’s place.

Matthias Mueller, the 62-year-old head of the sports car maker Porsche, had already been tipped as a replacement during Dr Winterkorn’s bitter feud with his one-time mentor and former supervisory board chief Ferdinand Piech this year.

herbert Diess, 56, is a defector from rival maker BMW who is currently head of the VW brand. At BMW he was responsible for getting new generation Mini production under way in the UK and has a reputation as a cost-killer.

Rupert Stadler, the 52-year-old head of luxury brand Audi, is also said to be in the running.

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