VOLKSWAGEN SUPERVISORY BOARD REALIGNS BOARD OF MANAGEMENT REMUNERATION SYSTEM
2/2/2013.- The Supervisory Board of Volkswagen Aktiengesellschaft has realigned the remuneration system of the Board of Management. As a result, the remuneration of the Board of Management members for fiscal year 2012 is lower than the prior-year level even though the Group’s operating profit increased to EUR 11.5 billion (prior year: EUR 11.3 billion) in 2012. In particular, the extremely positive business development of the last two years, and the associated rise in operating profit taking into account new brands, called for a further development of the variable remuneration components. As announced by the Company after a Supervisory Board meeting on Friday, the Supervisory Board discussed the new remuneration structure in depth and has put in place a realigned system representing a sustainable and appropriate remuneration concept for Board of Management members.
The variable remuneration components for Board of Management members comprise a bonus, which relates to business performance over the previous two years, and a Long-Term Incentive (LTI) plan, which is based on the previous four fiscal years.
The Supervisory Board determined that a bonus will only be paid if the operating profit exceeds EUR 5 billion. Furthermore, the bonus for the Chairman of the Board of Management for fiscal years 2012 and 2013 will be capped at EUR 6.75 million. The cap for the other Board of Management members will be EUR 2.5 million. The Supervisory Board will review the methodology and the caps at regular intervals to determine whether any adjustments are required.
In addition to these caps, a personal performance payment totaling a maximum of 50 percent of the relevant capped bonus may be awarded to individual Board of Management members for special achievements that have contributed to sustained corporate development. This provision takes greater account of the individual performance of members of the Board of Management in determining remuneration.
There has been no realignment of the LTI, where the amount depends on the achievement of the targets laid down in the Strategy 2018. Total remuneration of the Volkswagen Board of Management for fiscal year 2012 amounted to around EUR 56 million (prior year: around EUR 70 million), of which the Chairman of the Board of Management received around EUR 14.5 million (around EUR 17.5 million).
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Text and photograph by: Volkswagen.
