Owing to the continuing emissions scandal that has gripped Volkswagen beginning in 2015, the group’s senior managers now face a potential pay cut under pressure from the company’s stakeholders.
Volkswagen’s second largest shareholder, the state of Lower Saxony, has called for a reduction in bonus payments to Volkswagen’s nine executives according Reuters.
As the cost of falling sales, regulatory fines, and mounting class action lawsuits pertaining to the falsely stated diesel emissions figures rises, so to0 does the compensation bill, with the initial €6.7 (A$9.8 billion) billion set aside to deal with the crisis now considered considerably under-estimated.
A management meeting earlier this week failed to reach a resolution over executive bonuses with Volkswagen Group CEO, Matthias Mueller, who has been given until the end of the month to find a viable solution.
At the end of 2014, Volkswagen’s board received approximately €70 million (A$102.5 million) in fixed and bonus payments. The current pay reduction under discussion ranges from 30 to 70 percent according to internal sources.
Along with the reduction in upper management bonuses, Volkswagen has consolidated its research and development budgets to rein in costs. At the end of April a full financial report will be released, following an independent report into the emissions cheating scandal in the US that is due just days earlier.
The delayed financial report will offer the first official indication of Volkswagen’s fiscal standing since admitting to the use of emissions defeat devices in diesel vehicles in September last year.