VW to cut managers’ bonuses

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Following internal pressures over the hefty bonuses for senior managers amid the diesel scandal, Volkswagen will cut them by around 30 percent, sources say.

Large bonuses for Volkswagen’s executives triggered an internal dispute and drew criticism from the company’s investors and labor leaders. The German state of Lower Saxony, the second biggest shareholder in Volkswagen by voting rights called for those extra hefty payments to be scrapped or cut, as the automaker is struggling with high costs over the emissions scandal. Recent reports revealed that management board members were refusing to voluntarily give up entirely on their bonuses, agreeing instead to shrink them to some extent. However, VW’s supervisory and management boards are planning to make significant cuts in variable pay, people familiar with the company’s strategy disclosed. Other sources said that the executives’ bonus payments are to be cut by at least 30 percent.

There is at least a common sense matter that people up top should set an example amid such crisis, which forced Europe’s biggest automaker to make major budget adjustments and to lay-off workers. VW’s nine executives earned about 70 million euros (80 million dollars) in total compensation in 2014, including 54 million euros in variable pay, according to company data.

The cutting proposals over manager’s bonuses is to be approved during the supervisory board’s meeting, originally scheduled for April 20, which will ratify 2015 annual results, data that will be published on April 28. However, that meeting is likely to be delayed for a couple of days, as Volkswagen faces a 21 April court deadline in the US to make a deal with the regulators over a fix for the 580,000 over-polluting diesels.

Via Reuters