By on September 24, 2015

Winterkorn on a pure plugin. Picture courtesy Bertel Schmitt

Ousted Volkswagen CEO Martin Winterkorn could receive up to $67 million after leaving the automaker on Wednesday, depending on how his exit pay is calculated.

According to the Wall Street Journal, Winterkorn had amassed at least $34 million in his pension by 2014 (was stock included?) and his exit pay would be roughly two years of his current former $17 million annual compensation.

He’d also be entitled to a company car. There are plenty he could choose from right now.

According to the report, the Volkswagen board could ultimately decide how golden Winterkorn’s parachute will be. The ousted CEO wouldn’t be entitled to two years worth of pay if the board determined that Winterkorn’s exit was his fault.

Withholding Winterkorn’s salary for two years may be a pyrrhic victory, though. Acknowledging the top brass knew about the defeat device at any executive level would put the automaker in a world of lawsuit hurt.

Get the latest TTAC e-Newsletter!

28 Comments on “Don’t Cry For Winterkorn Just Yet; Former CEO Could Get $67M Handshake...”


  • avatar
    thornmark

    The uncanny thing is that the EPA was informed about the failures 1.5 years ago, at least according to the group that actually discovered it.

    Why the lag, especially if the extra pollution is so harmful?

    • 0 avatar
      jmo

      VW kept stalling. Bloomberg is reporting VW even went so far as to do a sham recall but they never actually changed anything.

      • 0 avatar
        thornmark

        “the West Virginia researchers, in conjunction with the ICCT, presented the results in May 2014 to the Environmental Protection Agency and the California Air Resources Board.”
        http://www.wsj.com/articles/volkswagen-emissions-problem-exposed-by-routine-university-research-1443023854

        “Carder said he’s surprised to see such a hullabaloo now, because his team’s findings were made public nearly a year and a half ago.”

        “We actually presented this data in a public forum and were actually questioned by Volkswagen,” said Carder.
        http://www.reuters.com/article/2015/09/23/us-usa-volkswagen-researchers-idUSKCN0RM2D720150923

        • 0 avatar
          APaGttH

          Lets remember, there was a college that PROVED that Toyota’s had a “ghost in the machine” and turned out they didn’t prove anything.

          There are institutions that “proved” additional problems with GM ignition switches that didn’t turn out to be as they were presented. Remember how “experts” had said that ignition switches had killed over 300 people based on “analysis,” which turned out to be not even remotely true? (not that 124 is a laudable number)

          In the case of Toyota, the media and NHTSA rushed the findings into the public and the case was tried in the court of public opinion.

          No ghost in the machines – but the gas pedals were in some limited cases having return issues, and because of a lack of clearance between the floor boards and base of the pedal, would more easily get entrapped than other models. New floot mats and carved gas pedals later, problem solved (oh and some zip ties to keep floor mats in place). The damage was done.

          I would like to believe they wanted to confirm the findings, and give VW the benefit of the doubt of disproving the findings — learning from what happened in the recent past.

          Also the EPA is significantly more screwed up, and grossly under funded compared to the NHTSA.

          • 0 avatar
            wsn

            Re the Toyota software ghost.

            Coming from a programming background, I can assure you that there are ghosts in every software, especially complicated ones. Case in point, MS Windows do get stalled sometimes. And you know MS hired hundreds of thousands working full time on this product.

            The difference is that, with Toyota, the ghost is not intentional and do not cause a large scale issue because it’s rare.

        • 0 avatar
          Pch101

          Your inability to understand basic information isn’t exactly impressive.

          The EPA and CARB began dealing with VW back in 2014. Go follow the timeline.

          https://www.cars.com/articles/vw-diesel-crisis-timeline-of-events-1420681251993/

          VW’s ineffective recall of December 2014 was a byproduct of that investigation. As it turns out, VW’s explanations were bogus.

          • 0 avatar
            thornmark

            Daniel Carder should be relieved to know you feel he doesn’t understand basic information.

          • 0 avatar
            Pch101

            It is simply a fact that EPA began dealing with VW on this issue in 2014. I realize that you and facts don’t have a good relationship, but the reality is what it is.

  • avatar
    APaGttH

    Dear current employer:

    I’d like a golden parachute.

    For running my division into the ground over the next 18 months I will accept a payout of $3.6 million USD in cash, and say another $2.4 million in equity.

    Seems like a good deal for both of us.

    • 0 avatar
      VCplayer

      To be fair to Winterkorn, VW has done nothing but make waterfalls of cash under his tenure. Obviously, mistakes were made, but the guy made billions for his investors.

      • 0 avatar
        Matt Foley

        Just like Hyman Roth in Godfather II. “Hyman Roth always makes money for his partners.”

        Liberals are wrong about a lot, but I have to admit they are right about CEO pay being out of control. Capitalism is a goose that lays a lot of golden eggs, but the 0.5-percenters are strangling that goose to death.

        $67M for the biggest corporate cock-up in recent memory? That’s even more than Bob Nardelli got for running Chrysler into the ground.

        • 0 avatar
          carlisimo

          I wouldn’t mind if it seemed to be more closely tied to performance – no one’s going to begrudge Apple’s execs when they receive astronomical salaries or bonuses. But you can make a lot of money while running a company into the ground. That just makes it look like a small club that rotates its members around without really adding anything to the economy. The financial industry complained that they couldn’t attract top talent without big bonuses, but what talent?

        • 0 avatar
          wsn

          I think the right thing to do would be:
          1) Pay him the millions as per contract.
          2) Sue him for shareholder damage together with VW.

      • 0 avatar
        ClutchCarGo

        “mistakes were made”

        My absolute favorite weasel phrase, generally used to trivialize gross misconduct that was obviously corrupt.

      • 0 avatar
        APaGttH

        …but the guy made billions for his investors…

        And now the company is facing $18 billion in fines in the US alone, has set aside $7 billion to deal with 11 million vehicles intentionally built to cheat the system.

        I mean, Ken Lay made billions for Enron — clap, clap, clap, clap, clap, clap, clap…

      • 0 avatar
        wmba

        VW been making waterfalls of cash under Winterkorn?

        Where have you been the last six years? Certainly not reading the business papers. VW was down to 4% ROI, and two years ago announced a 5 billion Euro cost-paring exercise. VW has more than twice as many people to build each car than Toyota does, and Piech was on Winterkorn’s back for not doing better financially.

        C’mon.

        • 0 avatar
          th009

          The number of people is an invalid comparison as it is skewed by supplier arrangements — the more you do in house, the less efficient you look.

          Piech complained, sure. But look at Volkswagen in 2007, and again in 2014, and volume has tripled and profits more than doubled.

          http://www.statista.com/statistics/264350/ebit-of-volkswagen-ag-since-2006/

      • 0 avatar
        jthorner

        Everything he earned for investors will be wiped out as the consequences of this fraud roll out. So in reality, he cost them a fortune.

        • 0 avatar
          VCplayer

          A board’s perspective is just a lot different on things like this. Winterkorn didn’t “resign” because of the defeat device, he resigned to appease investor confidence. It’s entirely possible that the board was aware of the fact that they were cheating the EPA, in fact I’d be stunned if they didn’t.

          CEOs have to take a bullet for the company sometimes, that’s part of the job. “Golden parachutes” are insurance for the CEOs that may or may not ever be able to work again depending on what went down. Think of a CEO as an NFL coach: a bad showing can cost you the ability to ever hold an equivalent job again. That’s why coaches sign multi-year deals with as large a buyout as they can negotiate. Like a coach though, the CEO goes down sometimes for things that are completely not his fault. Those jobs pay a ton, but there’s a LOT of risk on the individual level—as well there should be.

          Sometimes CEOs suck and don’t deserve their exit money, but a lot of the time they’ve only done what their investors wanted them to do. Some businesses definitely waste too much money on management, but others really need the very best they can get.

          Ken Lay getting a golden parachute is pretty disgusting, but he was intentionally defrauding his investors. Winterkorn was a very effective CEO who, from the board’s perspective, had the misfortune of being in charge when this went down. I’m not sure it’s entirely fair, but I’m not sure it isn’t either. Life is different when you’re paid to manage a worldwide multi-billion dollar corporation.

          • 0 avatar
            wsn

            “Like a coach though, the CEO goes down sometimes for things that are completely not his fault.”

            No. When you are paid millions, every fault is yours. That’s the real job description.

  • avatar
    bumpy ii

    It’s okay. VW will give him $67 million worth of TDI buybacks and call it even.

  • avatar
    redliner

    For his sake one would hope his exit pay didn’t include large amounts of VW stock. Wooops, looks like you just took a 50% haircut there ol’ Winky-dink!

  • avatar
    jpolicke

    I find it entirely plausible that Winterkorn had no part in directing the fraudware to be written and that he learned of it relatively recently. [Boy, to be a fly on the wall during that conversation!]

    However, if he left of his own accord rather than being pushed out by the board, I have no respect for the man. Anybody can bail out when it hits the fan; a real leader has the guts to stand fast and address the situation. If that’s the case then VW is better off without him.

    • 0 avatar
      ClutchCarGo

      I would agree that Winterkorn likely had no explicit knowledge of the defeat, nor did he directly order it, but I’m reminded of the scene from Atlas Shrugged where a train is stopped at the Taggart Tunnel for the lack of a proper engine. Some inconvenienced muckety-muck on the train calls D.C. demanding that “something be done”, starting a chain of calls from superiors to underlings giving them non-specific orders to “resolve this problem” or else, leading to some low-level employees in fear for their jobs making the disastrous decision that results in the destruction of the tunnel. Plausible deniability all the way up the chain but a disaster none the less.

    • 0 avatar
      jthorner

      I don’t. He came up through the engineering side of the company and I doubt he was completely unaware of the “breakthrough” which enabled VW to make compliant diesel engines without using AdBlue as everyone else had found they had to do.

      He had to know at least enough to say something like “I don’t need any details …. plausible deniability and so on”.

    • 0 avatar
      VCplayer

      I’m almost certain that if Winterkorn knew then the board knew too, and I really can’t see Winterkorn NOT knowing about something like this given his background.

      But if you’re the CEO you tell stuff like this to your board. I wouldn’t expect them to admit that of course. It will be interesting if meeting minutes ever get seized as part of whatever investigation gets done.

  • avatar
    RHD

    If VW stock keeps tanking like it has been, in a little while he could take his 67 million and buy the entire company.

  • avatar
    oldyak

    67 million for what?
    I cant fathom his value,or any other human`s is that much!
    Great way to start a revolution!
    Lets just tell all the refugees that we cant let you in because we dont have the money for it!
    67 million would go a long way to solving this problem.
    And people wonder why the Islamist`s hate the west…duh

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Scoutdude: I’m in a similar situation but I’d like to keep it around $15k and top down motoring is a...
  • Arthur Dailey: Auto manufacturing in Canada was successful under the Auto Pact, which was eventually ruled...
  • Lou_BC: I’d go the Mustang route if the only option is a car. I’d buy a couple of motorcycles if it were me buying...
  • Varezhka: If we’re going older Ford, I’m strangely drawn to J Mays era Ford Thunderbird. Dunno if the...
  • Mackie: This is painful. Can we please see some actual journalism instead of calls for purchasing suggestions from...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber