A number of Volkswagen executives will not be seeing their full bonus for 2015. In a statement today, Volkswagen announced bonus payments for top executives will be cut "significantly." This announcement comes a week after it was revealed that Volkswagen Group Chairman Hans Dieter Poetsch would be getting about 10 million euros (about $11.4 million) as compensation for stepping down as the company's CFO.
News about this bonus angered Volkswagen's labor leaders and the state of Lower Saxony, Volkswagen's second-largest shareholder. They argued Volkswagen should just scrap the bonuses since Volkswagen could experience more financial pains due to the diesel emission scandal.
"Supervisory Board and Management Board jointly agreed that – given the current situation of the company – a signal should also be sent with respect to the topic of the Management Board's remuneration," said Volkswagen in a statement.
Volkswagen hasn't said how much the bonuses will be cut, but a source tells Reuters that it will be around 30 percent. Sources also reveal that further measures are being discussed to reduce variable pay even further, but that might be enough resolve the dispute with the union leaders and Lower Saxony.
Volkswagen's supervisory board will make a decision on the cuts at its next meeting later this April.
Source: Reuters, Volkswagen
Press Release is on Page 2
Volkswagen AG informs on Wednesday:
"Supervisory Board and Management Board jointly agreed that – given the current situation of the company – a signal should also be sent with respect to the topic of the Management Board's remuneration.
Different models which would constitute a reasonable and fair solution for all parties involved are currently discussed and coordinated.
As a consequence, this would lead to a significant reduction of the variable remuneration. This would also subsequently apply to Mr. Poetsch at his own request.
The individual compensation components will be adopted in the forthcoming Supervisory Board meeting and will be published in the annual report on 28 April."