Volkswagen CEO Martin Winterkorn resigned yesterday amid revelations that the company falsified emissions results for 11 million cars worldwide.
Although Winterkorn is no longer with with the company he lead for nearly a decade, he will likely still get a sizable check – as much as $69 million, depending on how Volkswagen’s board classifies his departure, according to Bloomberg News.
According to Bloomberg’s Anders Melin, the former chief executive is could get two separate payments from Volkswagen.
First, Winterkorn is eligible for a severance package equal to two years’ pay, Bloomberg reported. Last year he raked in roughly $18.7 million.
The severance package is triggered when Winterkorn’s contract is prematurely terminated. However, there’s a clawback clause built into his separation agreement, Bloomberg reported, and the severance can be withheld if he is terminated for cause.
Secondly, Winterkorn amassed a pension valued at $32 million at the end of 2014. Athough it is unclear what his eligibility requirements are for the pension.
Overall, the two pots add up to more than $69 million in pension and severance pay.
At this point, we don’t know if Winterkorn will receive either of the payments, but thus far all reporting indicates that Winterkorn was not fired.
Rather, he requested the supervisory board relieve him of his duties. Furthermore, the supervisory board’s latest statement seems to absolve him of culpability in the scandal. Emphasis is added by Business Insider:
“The Executive Committee notes that Professor Dr. Winterkorn had no knowledge of the manipulation of emissions data,” VW’s supervisory board said in the statement. “The Executive Committee has tremendous respect for his willingness to nevertheless assume responsibility and, in so doing, to send a strong signal both internally and externally.”
Volkswagen
It’s not clear then who Volkswagen will blame for the cheating, which it has admitted to. Reuters reported on Thursday that Volkswagen will start firing people on Friday – something the VW spokesperson described asspeculation.
Volkswagen’s trouble began last Friday when the US Environmental Protection Agency issued a “Notice of Violation” accusing the company of using hidden software — called a “defeat device” — to cheat clean-air standards during emissions testing.
Initially, the scandal covered 482,000 cars sold in the US from 2009-2015. Later, VW revealed that more than 11 million vehicles equipped with the company’s once-praised 2.0 liter TDI diesel engines were affected.
The news has already triggered law suits, government investigations, and caused the company to ten of billions of dollar in share value this week.
Although it is rumored that Porsche CEO Matthias Mueller and current VW executive Herbert Diess are candidates to take Winterkorn’s vacated seat, the company has said a successor has not been named.
