VW is said to have massively lowered the threshold for million-dollar bonuses for top managers

Volkswagen has apparently significantly lowered the hurdle for full board bonuses. With a return on sales of 3.8 percent, the group's top managers should receive the full bonus component. Last year the same value was only enough for half. This emerges from an internal document that “Spiegel” was able to see. The development is in striking contrast to the savings targets that CEO Oliver Blume and CFO Arno Antlitz have set for Europe's largest car manufacturer.

The group is aiming for a return of nine percent and an operating profit of more than 30 billion euros by 2030. According to a savings program decided in September, these goals form the overarching core of the restructuring course. Tens of thousands of jobs will be lost and up to four Volkswagen and Audi plants in Germany will be closed.

The group is currently a long way from meeting such requirements. In the summer quarter, Volkswagen only achieved a return of 3.8 percent. When presenting the figures, CFO Antlitz described this value as too low. However, according to calculations by “Spiegel”, the return of 3.8 percent is exactly the threshold above which management receives the full bonus for this key figure. At 2.8 percent there is still half, at 5.8 percent even 175 percent of the intended bonus component.

According to “Spiegel”, the internal documents show that the hurdles have been significantly shifted compared to the previous year. At that time, a 3.8 percent return would only have been enough for half of the bonus. The threshold for full payout was 5.8 percent.

The Supervisory Board sets the success thresholds for the managers every year. A spokesman for the committee did not want to comment on the documents to “Spiegel”.

In addition to the return on sales, the remuneration also depends on the cash flow, i.e. how much net money flows into the company within a year. Volkswagen had already attracted attention at the beginning of the year with its surprisingly high cash flow. The group reported six billion euros more than had been communicated just a few months earlier. In doing so, he narrowly overrode the threshold at which the board of directors and senior managers receive the maximum bonus for this key figure. At the time, CFO Antlitz denied having influenced the cash situation in favor of his personal remuneration. According to the report, this would be possible by not paying bills until the new year or by selling more cars before New Year's Eve.

When it comes to returns, however, the bonus question for the current year is likely to be different. According to “Spiegel”, the key figure adjusted for special effects counts for the calculation. After the weak figures for the third quarter, Volkswagen could at best achieve a return of around one percent for the year as a whole. This would mean management would clearly miss the now lowered threshold of 3.8 percent.