VW boss agrees to a bonus cut
Volkswagen said Wednesday that the deal would be approved at a supervisory board meeting on April 22, when the company’s directors are also expected to review a report on the diesel scandal from Jones Day. Volkswagen commissioned the U.S. law firm in September to conduct a thorough independent investigation into the events surrounding the company’s decision to rig diesel engines to cheat on emissions tests.
The board of directors will also review Volkswagen’s 2015 accounts the same day. The company is planning to publish a few details from the accounts, which could include the dividend, which could be sharply reduced or scrapped, as well as any additional charges Volkswagen will take to fund potential fines and compensation linked to its emissions scandal. The full earnings report will be published on April 28.
The agreement to cut management bonuses comes after days of wrangling between the company’s senior management, core shareholders and labor representatives. The state of Lower Saxony, which holds 20% of Volkswagen’s voting capital, and the IG Metall trade union pushed the company’s management to accept a sweeping cut in bonuses.
“I very much welcome this step by Mr. Potsch," Stephan Weil, the prime minister of Lower Saxony, who was driving the push to cut bonuses, told the state’s legislature on Wednesday.
Mr. Weil also said that Volkswagen’s directors would be briefed in detail on the Jones Day investigation at the next board meeting. It isn’t clear how much of the report will be made public.
The news comes as Volkswagen is embroiled in legal proceedings in the U.S. and Germany ranging from criminal investigation into allegations of fraud, a major civil lawsuit with more than 500 plaintiffs in San Francisco, and an investigation by the Federal Trade Commission into whether Volkswagen’s advertising for “clean diesel" broke constituted fraud in advertising.
The company faces potential fines and compensation that could total tens of billions of dollars, though some legal experts believe the costs will be much lower.
Volkswagen’s board set their next meeting to come after the April 21 deadline set by a U.S. federal judge for the car maker and U.S. environmental authorities to agree on a plan to recall nearly 600,000 diesel-powered vehicles in the U.S.
In Germany, Volkswagen has failed to gain approval for its planned fix for its 2-liter Passat sedans, forcing the company to withdraw its plan and further delay a European recall of one of its best-selling models.
Instead, Volkswagen said it now plans to move forward with the recall for other models, such as the Golf. It wasn’t immediately clear if Germany’s motor vehicle authority, known as the KBA, has approved a recall of Golf-class vehicles. =Hendrik Varnholt contributed to this article.