Wednesday 21 February 2018

Volkswagen to cut managerial bonuses following diesel scandal

Volkswagen says it will cut its managerial bonus scheme
Volkswagen says it will cut its managerial bonus scheme

Volkswagen says managerial bonuses will be cut following the diesel emissions scandal that rocked the vehicle manufacturer.

The German company said in a statement that managers and directors agree the firm has to send a signal regarding the management board's pay in light of the current situation.

It said that various models are being discussed, but the result would be a significant reduction in variable pay. It did not give any precise figure.

The company says details will be released in its annual report being published on April 28.

The emissions-rigging scandal erupted in September.

The cut would apply to its management board, a group of executives that helps the CEO run the company day to day.

The supervisory board, which is the German equivalent of a board of directors, would not be affected, except for chairman Hans Dieter Poetsch - the company's chief financial officer until he switched jobs late last year. Volkswagen said this was "at his own request".

The statement followed German media reports in recent days of divisions at the company over the extent to which managers should take a hit on their bonuses.

News of the scandal broke on September 18 when the US Environmental Protection Agency said Volkswagen had installed software on 482,000 cars that enabled them to cheat on emissions tests.

On September 22, Volkswagen said about 11 million diesel vehicles worldwide were fitted with the software.

Longtime CEO Martin Winterkorn resigned on September 23, saying he was acting in the interests of the company but was not "aware of any wrongdoing on my part".

Press Association

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