Manager Salaries Are Being Scrutinized At VW

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

The supervisory board of the VW group is discussing this Friday on a reform of the remuneration system at the car manufacturer. The CEO should therefore only collect ten million euros annually. But it will also be exciting because of other topics.

After massive criticism of the high salaries of its top managers, the car group Volkswagen is facing a reform of the remuneration system. The supervisory board will meet for deliberations on Friday. Accordingly, the head of the VW board of directors should receive a maximum of ten million euros in salary per year, as the German press agency learned from the group.

High salaries and severance payments in the millions at VW had recently again caused criticism. The ex-boss Martin Winterkorn, who fell over the exhaust gas scandal, had in a few years also received significantly more sumptuous sums than ten million euros. High manager salaries against the backdrop of the diesel scandal also reignited the political debate. Federal Minister of Justice Heiko Maas (SPD) had told the dpa that it was a question of justice that politics took action against excessive salaries and pensions for top managers.

First results in the afternoon

The results of the supervisory board meeting at VW, which according to reports should begin at noon, are expected in the later afternoon or early evening. The world's largest automaker announced in 2016 that it wanted to change its executive compensation system. The initiative for this was taken by the state of Lower Saxony and the works council, as was further heard. The country is a major VW shareholder and has two members on the supervisory board.

In addition, it is expected that the company will present the first key points of its balance sheet for 2016 after the meeting of the supervisory body. In 2015, Volkswagen recorded the largest loss in the company's history in view of the immense costs of the diesel scandal. The bottom line was the result was minus 1.6 billion euros. Last year, however, VW is likely to have significantly increased earnings before interest and taxes again at no cost, for example for various comparisons in the USA and Canada, as analysts estimated.

Stadler supports the supervisory board

When dealing with the diesel affair, Audi boss Rupert Stadler, who has been in office since 2007, recently came into focus. A former chief developer of diesel engines who had been dismissed by Audi had made allegations against him. The Audi boss told him when he was on leave that “everything happened under pressure from VW and the VW supervisory board,” the lawyer for engineer Ulrich Weiß had quoted from an interview at the Heilbronn Labor Court on Tuesday. Audi denied that White had correctly reproduced the content.

VW CEO Matthias Müller and the Audi supervisory board expressed their trust in Stadler on Friday. The supervisory board had the allegations made examined by a law firm. "This examination comes to the conclusion that the allegations made against Mr. Stadler are not applicable," said the VW subsidiary. In September 2015, it was first officially announced in the USA that Volkswagen had been using a program to manipulate diesel emission values for years. In addition to the core brand VW passenger cars, models from the subsidiaries Audi, Seat and Skoda are also affected. VW has so far emphasized that only a few managers below the top management level were responsible for the manipulation.

Allegations from Piech

When coming to terms with the scandal, allegations by ex-supervisory board chairman Ferdinand Piëch also caused a stir. According to this, Piëch had accused members of the supervisory board presidium such as Lower Saxony's Prime Minister Stephan Weil and works council chief Osterloh of having known about a suspected exhaust gas manipulation in the USA earlier than previously known. These had sharply rejected this.

In a response from the Lower Saxony State Chancellery to a request from the CDU parliamentary group, it is now said that, according to the current status of the investigation, there is “no initial suspicion against any member of the Volkswagen supervisory board”. In addition, there were recently disputes between the VW brand boss Herbert Diess and the works council. The reason was the implementation of the “Future Pact” reform program. With the savings and conversion concept, the Group's core brand VW is to become more profitable. Works council chief and VW supervisory board Bernd Osterloh had accused Diess of breaking his word and therefore put some projects on hold for the time being. The dispute was settled earlier this week.

The question is whether the next row will break out soon. Because Osterloh and Diess had already clashed several times in the past. The "Handelsblatt" wrote on Friday that the Supervisory Board would also discuss this issue. Even an expulsion of Diess is considered "some in the leadership circle" as no longer excluded. (dpa)