Volkswagen AG slashed compensation of senior executives by 37 percent last year as the German automaker reacted to criticism of past generous pay packages in the wake of the diesel-cheating scandal.
Volkswagen AG slashed compensation of senior executives by 37 percent last year as the German automaker reacted to criticism of past generous pay packages in the wake of the diesel-cheating scandal. Remuneration for management-board members dropped to 39.5 million euros ($42 million) from 63.2 million euros in 2015, according to the Wolfsburg-based company’s annual report published Tuesday. Last year’s compensation would have been even lower if not for a 10 million-euro payout to legal-affairs chief Christine Hohmann-Dennhardt, who is leaving after just a year on the job following clashes with other executives.
Chief Executive Officer Matthias Mueller’s wages, benefits and bonuses jumped 52 percent to 7.25 million euros in 2016, his first full year on the job, from 4.76 million euros in 2015, when he served in the role for just a few months following predecessor Martin Winterkorn’s sudden departure stemming from the revelation of diesel-model emissions manipulation.
Volkswagen revised its compensation system last month to gear it more toward share performance than the carmaker’s results. The changes cap the CEO’s remuneration at 10 million euros and limit compensation for other management-board members. The manufacturer’s previously high pay came under fire in the aftermath of the emissions-cheating scandal, which has so far triggered 22.6 billion euros in damages for the company.
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Former CEO Winterkorn was Germany’s best-paid executive for years as Volkswagen raked in record profits. The compensation policy was backed by the government of the German state of Lower Saxony, VW’s second-largest shareholder, as well as labor leaders. Outside investors effectively had no say as the majority of the manufacturer’s voting stock is controlled by Lower Saxony and members of the Porsche and Piech families.
The new pay rates put Volkswagen more in line with peers. Mercedes-Benz parent Daimler AG paid its top managers 37.3 million euros in 2015, while BMW AG’s management board earned 34.8 million euros.