VW managers keep tight on their bonuses

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Top managers from Volkswagen are not willing to give up on their bonuses so easily, drawing criticisms from one of company’s biggest shareholders.

The emissions scandal forced Volkswagen to make some serious budget adjustments, planning to scale down part of its main operations in Germany, as well as to lay off workers. However, when it comes to cutting bonuses for senior managers, there seems to be no dilemma, as those in charge benefit from hefty bonuses, despite the company’s predicament. German magazine Der Spiegel cited firm sources who revealed that management board members were refusing to voluntarily give up on extra payments, agreeing instead to shrink them to some extent. As expected, this “approach” tensed the ongoing dispute with Europe’s biggest carmaker labor leaders, who have seats on the supervisory board.

The German state of Lower Saxony, the second biggest shareholder in Volkswagen AG by voting rights, also raised the moral question of giving bonuses amid the crisis. “The state is keenly aware of the problematic nature of flexible bonuses,” a spokeswoman for Lower Saxony said. “It is ultimately a decision for the supervisory board. Opinions on the matter have not yet been finalised,” she added.

A supervisory board member told Reuters that, although it was a challenging task not to comply with managers’ contracts, it would be the right thing to do not grant bonuses. “It could be argued that manipulation of diesel emissions helped increase profits in prior years, making it all the more urgent that the supervisory board advise the management board to forgo bonus payments,” the person said.

Via Reuters