VW executives “in danger” of giving back their bonuses

#hashtags: #Granting #Lower Saxony

One of VW’s biggest shareholders said that managers may have to return their bonuses if German prosecutors fine the company.

Granting large bonuses for Volkswagen’s executives triggered an internal dispute earlier this year and drew criticism from the company’s investors and labor leaders, as the automaker reported its biggest ever operating loss for 2015. The German state of Lower Saxony, the second largest shareholder by voting rights, called for those extra hefty payments to be scrapped, for the state to eventually later agree on some cuts only. However, Lower Saxony Economy Minister Olaf Lies recently revealed the situation may by drastically reviewed if the German prosecutors will eventually make the automaker pay for its trickery. “We will have to examine the law to see how this can be done,” he said, cited by Reuters.

Prosecutors from the regional court of Braunschweig are now seeking for pecuniary penalties by assessing the “economic advantage” VW benefited from by using bypass engine software, rather than spending money on the development of cleaner technologies. They have also opened an investigation against former CEO Martin Winterkorn and brand chief Herbert Diess in June, for manipulating the markets.

Industry observers in Germany estimate that the use of the software could result in a fine of several hundreds of millions of euros. However, such a fine would be nowhere near the 15.3 billion agreement that was enforced by the US authorities.

Via Reuters