Report: Volkswagen to Significantly Cut Management Bonuses This Year

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Volkswagen Group’s Management and Supervisory boards have “jointly agreed” that the Management Board’s 2015 yearly bonuses will be significantly less than before, according to a release on the company press site. Though bonuses will be reduced, some interested parties believe that management shouldn’t receive any bonuses amidst the current dieselgate debacle, Reuters reports.

The German state of Lower Saxony (the company’s second-largest shareholder) and the automaker’s labor leaders say the Volkswagen Management Board should go without any bonuses, according to the report. Volkswagen Group is facing a multi-billion-dollar loss due to government fines and stock losses, negative consumer perception, and also has to find a fix for nearly 11 million affected cars to bring their turbodiesel emissions into compliance.

The full statement posted on Volkswagen’s press site reads:

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. [Hans Dieter] 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.

While the company’s statement didn’t say how much management bonuses would be cut, a report from Reuters suggests the cuts could be 30 percent or more. Reuters also said there are talks to cut the bonuses even more.

Volkswagen will publish its final decision regarding management board bonuses in its annual April 28 report after an April 22 board meeting.

Source: Volkswagen, Reuters