VW says top executives to be paid 63 mn euros for 2015

28th April 2016, Comments 0 comments

Embattled German auto giant Volkswagen said Thursday that its top executives would be paid a total 63.2 million euros ($72 million) for 2015 despite the huge loss incurred from the massive engine-rigging scandal.

But a large chunk of that pay will be held back for a period of three years and only be paid out if the group's share price rises by an agreed amount in the intervening period.

VW revealed in its annual report, published on Thursday, that chief executive Matthias Mueller, appointed late last year to steer the group out of its deepest-ever crisis, would be paid 4.76 million euros.

The amount comprises a fixed basic salary of 1.1 million euros plus performance-related bonuses of 3.65 million euros.

Martin Winterkorn, whom Mueller replaced soon after the scandal broke, would receive 7.31 million euros, down from 15.86 million euros the year before, the report showed.

And Hans Dieter Poetsch, who switched from his position of chief financial officer to become head of VW's supervisory board in the wake of the scandal, would be paid 5.1 million euros for his time as CFO. In addition, Poetsch would receive 13,400 euros for his supervisory board duties.

The issue of the VW board's pay has hogged the national headlines in recent weeks, with public debate raging over whether they are morally entitled to performance-related bonuses after prescribing a bout of belt-tightening in the wake of the engine-manipulation scandal.

Last September, it emerged that VW had installed emissions-cheating software into 11 million diesel engines worldwide.

The costs of the scandal are still incalculable but are expected to run into many billions of euros as a result of fines and lawsuits.

VW posted a loss of 1.6 billion euros for 2015 and set aside 16.2 billion euros to cover possible regulatory fines, lawsuits and recall costs so far resulting from the scandal.

Last week, VW announced that it would initially hold back 30 percent of the executive board members' annual bonuses for 2015.

But the money could be paid out three years later in 2018, depending on the subsequent performance of the group's shares.

The cash being held back would first be transformed into preference shares and only then paid out in full in 2018 if the price of the shares on the stock exchange had risen by at least 25 percent by the end of the three-year period, VW explained.

Given the various board changes during the course of the year, not all related to the scandal, only a total 4.22 million euros from the 63.2 million euros would be held back for the three-year period, the VW report said.

CEO Mueller would see 1.19 million euros -- or around one third of his performance-related bonuses -- withheld.

At the group's annual news conference at its headquarters in Wolfsburg on Thursday, Mueller vowed that the carmaker would overcome the crisis and not allow itself to be slowed down by the affair. And it would return to profit this year, he pledged.

© 2016 AFP

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