Martin Winterkorn (r.) And Rupert Stadler
VW demands compensation from the then CEO Winterkorn and the then Audi boss Stadler.
(Photo: dpa)
Düsseldorf The official statement from Volkswagen on the agreement in the struggle for damages for misconduct by group managers in the diesel scandal is short and sweet: “The supervisory board decided in yesterday’s meeting the main terms of the settlement,” said a group spokesman on Sunday afternoon. “The agreements should be concluded in the coming days.”
In fact, this is likely to be the highest sum that insurers in Germany have ever paid for breaches of duty by managers. With a sum of presumably between 200 and 300 million euros, a group of insurers around Zurich is said to step into the breach in the diesel scandal. This framework had already leaked a few days ago.
Neither Volkswagen nor the insurers wanted to comment on this when asked. At the more than ten insurance companies, including Allianz, Volkswagen had taken out manager liability insurance for its executives for 500 million euros.
According to research by the Handelsblatt, the agreement with the insurers was the last open and at the same time the most important part in the struggle for compensation payments. The details are fought to the last: According to insider circles, the final conclusion is not expected until Tuesday or Wednesday.
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In the course of the past week it had already become known that long-time VW CEO Martin Winterkorn had agreed to personally pay eleven million euros. Five other managers should also be asked to pay millions with sums of money.
Demands on Winterkorn, Stadler and other ex-board members
At the end of March, the VW supervisory board had decided to claim damages from Winterkorn, the former Audi boss Rupert Stadler and four other ex-board members for violating stock corporation law. The group based its claims for recourse on an expert opinion from the law firm Gleiss Lutz. The law firm came to the conclusion that the then CEO Winterkorn had failed to clarify the background to the use of impermissible software functions in diesel engines immediately and comprehensively as of July 27, 2015.
The lawyers also found breaches of duty at the ex-Audi boss Stadler and the former Audi development directors Ulrich Hackenberg and Stefan Knirsch as well as ex-Porsche development director Wolfgang Hatz and Heinz-Jakob Neußer, the ex-development director at Volkswagen. The insurers obviously only assume negligent breaches of duty on the part of the managers.
To this day, all the board members concerned have always rejected breaches of duty. There are already charges against all six, and Stadler and Hatz are currently on trial at the Munich Regional Court.
Should the criminal courts come to the conclusion that the VW managers have deliberately violated their duties and convict them of fraud, the insurers would probably not have had to pay anything. If, on the other hand, the courts assume the innocence of Winterkorn and Co., it could have been much more expensive for the insurers.
For Volkswagen, the decision of the Supervisory Board paves the way to a final conclusion of the compensation package. Now the annual general meeting has to approve the settlement in mid-July. The consent there is considered certain.
Pötsch enjoys the trust of the shareholder groups
The confirmation of Hans Dieter Pötsch as chairman of the supervisory board is also considered certain there. Pötsch wants to be appointed head of the control committee for another five years. The VW supervisory board also passed a resolution on this on Saturday.
The renewed candidacy of Pötsch was generally expected in the Wolfsburg car company. The former VW CFO enjoys the trust of all important shareholder groups. On Saturday, the group’s supervisory board also proposed Louise Kiesling, 63, also for a further five years as the representative of the Porsche-Piëch family of owners for the highest supervisory body. Because of the majority, the confirmation at the general meeting is, as with Pötsch, only a matter of form.
Conflicts are a constant threat at Volkswagen. There are regular problems, especially between the management board and the powerful works council. In this flammable atmosphere, Hans Dieter Pötsch is the decisive dormant pole for many in Wolfsburg. Its main task is to bring the heated minds together and to prepare the ground for compromises and solutions.
Hans Dieter Pötsch extended
Hans Dieter Pötsch at the last VW general meeting before Corona with a shareholder presence: The former Volkswagen CFO can be elected a second time as head of the supervisory board.
(Photo: Bloomberg)
The owner family brought the 70-year-old Upper Austrian into office a good five years ago; he is their mainstay. But not only: The state of Lower Saxony and the desert state of Qatar, the other two important shareholders of Volkswagen, do not want to do without Pötsch’s services if his term of office ends regularly at the next annual general meeting. “When he is ready, the largest shareholders will confirm him in office,” said Wolfsburg in March.
“Dieselgate” brought Pötsch to the top of the supervisory board
“I value Mr. Pötsch’s experience, his pragmatism and his calmness,” said family spokesman Wolfgang Porsche to the Handelsblatt at the time. Pötsch is an honest broker for the different interests of the Volkswagen Group. “For him, it’s basically about the thing, not about himself.”
“Mr. Pötsch’s competence and ability to integrate play an important role in the fact that the group has mastered many problems and is on the right track,” praised Lower Saxony’s Prime Minister Stephan Weil (SPD).
Five years ago it was unthinkable for many that Pötsch would be granted another term of office. Of all things, the affair involving manipulated emissions from diesel cars, which has cost the group more than 30 billion euros and which shook the entire automotive industry in autumn 2015, brought him to the top of the supervisory board.
At the time, the public prosecutor and investors attributed the suspicion to long-time VW CFO Pötsch that he might have kept the billion-dollar “Dieselgate” risk from investors for too long. It was suspected that he had been in a crucial position in the company for so long that he should have heard of the cover-ups. Pötsch belonged to the extended circle of confidants around the long-standing management duo Martin Winterkorn and Ferdinand Piëch.
Despite the knowledge of the risk of prosecution, the major shareholders prevailed in autumn 2015 and appointed Pötsch as chairman of the supervisory board. They disregarded the resistance of small investors as well as the code of good corporate governance, corporate governance. It does not provide for a direct change from the management board to the supervisory board, but requires a two-year break, a cooling-off phase.
In the case of Volkswagen, however, a quick solution was needed, explained a supervisory board. Pötsch not only enjoyed the trust of major shareholders. The works council and management also gave Pötsch the necessary support. “He enjoys a high level of recognition from shareholders and employees,” said Jörg Hofmann, head of IG Metall and his deputy on the VW supervisory board.
Pötsch’s integrative role “was and is extremely important for managing the group in a difficult environment”. Pötsch was supposed to ensure stability after the exhaust gas affair became known. At the time, no one was sure whether the company would even survive the scandal.
Meanwhile, the minds about Dieselgate have calmed down. Also because the public prosecutor’s office in Braunschweig closed its investigation against Pötsch against a monetary issue last year. 4.5 million euros from the VW coffers flowed to the state, Pötsch did not have to pay the additional money himself. It is a second class acquittal, but the risk of prosecution was off the table. This also paves the way for Pötsch’s second term as head of the VW supervisory board.
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