News
Wolfsburg, 2016-04-22
Significant reduction in variable Board of Management remuneration
In the light of the current overall situation of the
Volkswagen Group, the Supervisory Board and the
Board of Management of Volkswagen
Aktiengesellschaft have agreed on a reduction in
variable Board of Management remuneration for the
2015 fiscal year.
In an intensive decision-making process over the past
few weeks, justified public expectations and contractual
conditions have been weighed up against each other.
The remuneration of Board of Management members at Volkswagen was based on the
considerable economic success of the company over a series of years. The remuneration
system at Volkswagen considers a long-term approach. Financial developments in 2015
stand out as an exception from this series and lead to an automatic reduction in the amount
to be paid.
As a result of the current performance figures, which are poorer, there will be a reduction in
the variable remuneration covering several years and also in the individual
performance-related bonus component. The same applies to the four-year long-term
incentive component, which will be 25 percent lower than for the previous year.
This effect will also be felt over the next few years.
In addition to this calculated reduction in the variable components of Board of Management
remuneration, the Supervisory Board has accepted the proposal made by the Board of
Management to reduce the Board’s contractual rights to remuneration still further on a
voluntary basis.
Furthermore, at the suggestion of the Board of Management, it has been decided that the
variable remuneration for current Board of Management members will initially not be paid in
full. The payment of 30 percent will be postponed for three years. This amount is to be
converted into virtual preference shares and will only be paid in full if the price of the
preference share rises by at least 25 percent at the end of the retention period, compared
with the initial reference price.
This will present both a risk and an incentive for the Board of Management as further parts of
the remuneration will be linked to the future business success of the Volkswagen Group.
In total, the variable remuneration of an ordinary member of the Board of Management will
fall by 39 percent (from €5.3 million in 2014 to €3.2 million in 2015). The amount of variable
remuneration actually paid for 2015 will be about €1 million lower than this figure (€2.2
million) or 57 percent lower than the amount paid for the previous year. This remuneration
proposal takes into account the current crisis and also considers that the business of the
Group may develop successfully in the future.
The Chairman of the Board of Management of Volkswagen Aktiengesellschaft, Matthias
Müller, emphasized: “The Board of Management is making tremendous efforts to reinforce
the trust of customers, to motivate the workforce and to safeguard employment at all
locations. The proposal concerning remuneration has therefore been made unanimously by
the Board of Management. This arrangement expresses the commitment of the Board of
Management to the company, its employees and its customers.”
The Chairman of the Supervisory Board, Hans Dieter Pötsch, also stated that he was
retroactively waiving part of his variable remuneration for the 2015 fiscal year amounting to
€2.3 million at his own request.