Automotive - - Feb 25,2017
According to an announcement made on Friday, German automaker Volkswagen said it would limit the executive pay following the diesel scandal.
Volkswagen clarified that as it aims to suppress widespread anger over offered bonuses even when the carmaker ached record losses in the aftershock of the emissions scandal in 2015.
The supervisory board approved the new rules on Friday. It states that, Volkswagen (VW) will cap the total pay for its chief executive at a value of 10 million euros ($10.6 million) along with other top managers at 5.5 million euros.
Former chief executive Martin Winterkorn, who quit his post over the diesel scandal, took with him 17.5m euros in 2011 as part of large bonus payments.
According to VW, bonus eligibility will be constricted under the new forward-looking system that will allow about 30 percent increase in fixed salaries.
Moreover, it is reported that the managers will lose their annual bonuses if VW’s operating profit is contained below 9 billion euros, linked with a current threshold of 5 billion euros, and also if the return on sales stays at 4 percent.
Also, VW issued a net profit of 5.1bn euros for last year, reviving from a 1.6bn euro loss for 2015 due to the infamous emissions-cheating scandal.
Chief executive Matthias Mueller after a meeting at its Wolfsburg headquarters said, “While the past fiscal year posed major challenges for us, despite the crisis the group's operating business gave its best-ever performance”.
The effects of the scandal did not stop the automaker as it delivered a record 10.3 million vehicles last year. This efficiency was largely driven by strong demand in Europe as well as the Asia-Pacific region.
Mr. Mueller said also added that, “Volkswagen is very solidly positioned in both operational and financial terms”, which makes the company optimistic about the coming future.