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Report: Lower Saxony Falls in Line on VW Board Endorsement
Lower Saxony, the German state that owns 20% of Volkswagen AG, balked at last week’s bid by VW’s board members to absolve themselves of blame surrounding the company’s diesel scandal.
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Lower Saxony, the German state that owns 20% of Volkswagen AG, balked at last week’s bid by VW’s board members to absolve themselves of blame surrounding the company’s diesel scandal. But the state relented under pressure from Chairman Hans Dieter Poetsch, a source tells Reuters.
The supervisory board asked shareholders on May 11 to clear them of wrongdoing, citing unspecified preliminary results of a continuing probe into the scandal. Reuters’ source says Lower Saxony objected because the investigation wasn’t yet complete. The state holds two seats on the 20-member supervisory board.
Lower Saxony dropped its complaint after Poetsch argued that an objection would be seen as a vote of no-confidence in the board, thereby hampering VW’s recovery efforts, according to the source. Outside critics say the board should accept at least some blame for allowing the diesel emission cheating scandal to continue for six years.
Last month the board agreed to withhold 30% of variable bonuses for its members in response to objections by investors and labor unions over the size of the original payouts. The balance is to be restored if VW’s share price reaches €140 from Friday’s closing price of €129. Earlier today VW announced that it will pay hourly employees bonuses of €3,950 for their work in 2015, down 33% from the previous year.
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