Bonuses will be tied to dividends and the company’s stock price.
It’s not an easy time to be a Volkswagen employee these days. Following the biggest scandal in the automotive industry, the German company announced it will cut 30,000 jobs worldwide in an effort to save €3.7 billion ($3.92 billion) annually by 2020. Some executives are being investigated and Oliver Schmidt was even arrested. Heinz-Jakob Neusser, Jens Hadler, Richard Dorenkamp, Bernd Gottweis, and Juergen Peter, all part of the board of management, will probably be charged for deleting emails and destroying documents about the Dieselgate.
And now, following a letter from activist investor TCI Fund Management sent to the company, Volkswagen is planning to cap the pay package for its top executives. Last year the manufacturer paid €63 million ($71 million) in bonuses, despite the record losses for 2015. From now on, there will be a fixed pay package of €10 million ($10.7 million) for the CEO and all execs below that position will receive less.
Under the new plan, bosses would have a higher fixed salary, but the variable bonuses will be lowered. What’s more, the additional payments would be tied to dividends and the company’s stock price, according to information from German business daily Handelsblatt.
The new pay rules are not effective yet, as the 20-member supervisory board of the manufacturer is due to discuss and approve them on a meeting, scheduled for February 24. Handelsblatt and Reuters say there’s no official statement from the Wolfsburg-based company so far.
Earlier this year Volkswagen pleaded guilty to three criminal felony counts – conspiracy, obstruction of justice, and using false statements to import cars to the U.S. The automaker agreed to pay $4.3 billion dollars in penalties and will be on probation period for the next three years. Meanwhile, during the next three months, the company will be monitored whether it complies with the terms of the resolution.