Less money for misconduct, repayment in case of gross mistakes – Volkswagen wants to tighten the bonuses of its 450 top managers stricter. The hope: a cultural change.
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Wednesday, 19.12.2018
14:29 clock
From 2019, the Volkswagen Group plans to introduce a new top management compensation system – and above all to significantly change the bonus system. Individual bonus payments should then be eliminated, and in the future two-thirds instead of the previous one-third of the variable remuneration will depend on group targets such as profit or the share price. That told VW on Wednesday.
The much-cited cultural change is thus anchored in the remuneration system, said VW HR Director Gunnar Kilian. In the event of grave misconduct, the Group may claim that it will also demand bonus payments in the future.
The new compensation system is based on rules for around 450 executives below the Group Executive Board. In the long-term bonus, the managers will receive virtual VW shares every year in the future and only after three years will they receive a corresponding payment.
In recent years, and given “Dieselgate”, the bonuses for the VW managers had caused a stir. The Group reformed its system of determining management board salaries for the 2017 financial year. Since then, there has been a maximum limit of 10 million euros for the CEO and 5.5 million euros for members of the Executive Board.
Top earner among the top ten VW executives last year was former CEO Matthias Müller, who received more than 10.1 million euros.