Herbert Diess
The CEO is putting pressure on the subject of an early extension of a contract that will expire in 2023.
(Photo: Reuters)
Wolfsburg, Frankfurt VW CEO Herbert Diess is aiming for the early extension of his contract, which will expire in spring 2023: “He now needs this confirmation that the supervisory board supports his course,” confirmed corporate circles this Friday. A meeting of the 20 inspectors is planned for this year. The subject of contract renewal will inevitably become an issue, even if it was not on the agenda.
Diess still has a contract until 2023, so the discussion is not necessary according to the rules. Only in the last year of its validity, the supervisory board and management board may therefore talk about an extension. From the 62-year-old’s point of view, however, there are several scenarios. On the one hand: His contract will be extended for another five years with immediate effect, it said.
Alternatively, it is also possible for Diess to fulfill his current contract until 2023 and then to be promised an extension of another three years.
At the end of an extended term, he would be 67 years old. It is precisely this fact that is now becoming a major problem for Diess. An extension beyond the age of 65 is only possible if this is necessary for a particular reason. The VW Act, for example, provides employees with special rights. Important decisions such as a board member contract beyond the 65-year limit fall under this rule.
The powerful works council boss Bernd Osterloh can block a contract extension. But even without the ten votes from the workers’ bank, Diess could fail with his request. In the supervisory board, the wish of the VW boss met with little love, as it was said.
Volkswagen has to become more efficient, they say
A spokesman for the works council asked Diess to take a public position on the issue. The state of Lower Saxony as the second largest shareholder declined to comment. A spokesman for the Porsche / Piech family emphasized that the largest shareholder was behind VW’s strategy and behind Diess. When asked if the family wanted to talk about extending the contract, the spokesman replied: “No comment”.
This also makes filling important positions on the corporate board a question of power. CFO Frank Witter will retire next year. Diess’ favorite is Arno Antlitz, currently Audi CFO. Osterloh rejects face all around. When Antlitz was CFO of the Volkswagen Passenger Cars brand in Wolfsburg, there were repeated arguments with the works council chairman.
With his fellow campaigner, Diess wants to drive cost reductions and productivity increases, especially at the German locations. According to corporate circles, Volkswagen must become more efficient in order to ensure its continued existence.
More: “The change will take place in ten years – with or without a Volkswagen,” says Herbert Diess in the Handelsblatt guest article.