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VW Caps Executive Compensation
Volkswagen AG says it will limit the future annual compensation for its CEO at €10 million ($10.6 million) and other top executives at €5.5 million ($5.8 million).
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Volkswagen AG says it will limit the future annual compensation for its CEO at €10 million ($10.6 million) and other top executives at €5.5 million ($5.8 million).
The move aims to placate public and shareholder pressure after VW executives grudgingly agreed last year to cut bonuses for 2015 by 30% in spite of the company’s diesel emission cheating scandal and cost-cutting campaign.
The new scheme will trim by 30% the proportion of total compensation contributed by bonuses. It also will raise the proportion represented by fixed salary as much as 30%, according to the company. VW says it won’t pay bonuses at all if group operating profit stays below €9 billion, up from the previous €5 billion threshold.
VW has based bonuses in the past on its financial performance for the preceding two years. The company hasn’t provided details about the new system but says it will lower the maximum potential compensation by as much as 40%. VW is expected on March 14 to report last year’s payout.
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