Martin Winterkorn, the former Volkswagen CEO, could walk away with a €28 million pension pot, further risking the reputation of the car manufacturer.
Accounts for VW show Winterkorn has amassed a huge pension during his long years of service to the company. He may also qualify for millions more in severance pay, possibly as much as two year’s salary, or €3.2m.
Winterkorn was Germany’s best paid executive last year, receiving a total of €16.6m in pay and bonuses.
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One City investor said: “The pension issue looks very bad. It reminds us of the situation with (former chief executive) Fred Goodwin at RBS. We could get another situation where there is a struggle to claw it back.”
Another said: “Morally, and for PR reasons, there can be little question he should hand at least some of the pension back. But legally, it may be difficult to force him to do the right thing.”
As well as two years’ severance pay, he is potentially entitled to free use of VW company cars essentially for life, according to the company’s accounts. These also reveal that he received €300,000 of “fringe benefits” last year including use of company cars.
VW’s boardroom pay and perks are among the highest in Europe – an issue that is bound to cause further embarrassment as the scandal unfolds.
Analysis of Winterkorn’s previous years’ pay shows he amassed bonuses of €68m during the period from 2009 to 2014 when the emissions tests were being rigged in the US.
Pressure is likely to mount in the coming days on the German company’s board to recoup some of that money, although it is not clear if there are legal grounds for doing so.
Meanwhile, a member of VW’s supervisory board, Olaf Lies, today said he expected further resignations, saying the scandal was only just beginning.
“There must be people responsible for allowing the manipulation of emission levels to happen,” he said.
VW has filed a criminal complaint with German prosecutors seeking to identify those responsible for any illegal actions in connection with the scandal.
City analysts and economists have been struggling to quantify the potential impact of the scandal on VW and its suppliers like British engineer GKN, but also on the German economy as a whole.
As ING economist Carsten Brzeski said: “All of a sudden, Volkswagen has become a bigger downside risk for the German economy than the Greek debt crisis.”
