Union Dos and Don'ts: Volkswagen Chops Salaries and Bonuses for Works Council Amid Investigation

Matt Posky
by Matt Posky
union dos and donts volkswagen chops salaries and bonuses for works council amid

Volkswagen has slashed salaries and suspended the bonuses of 14 members of its works council, including council head Bernd Osterloh, as officials investigate alleged overpayments. In May, it was made public that German prosecutors were looking into current and former executives at VW under suspicions that they paid the labor chief an “excessive” salary.

This was followed by a November raid, after which the council claimed the probe didn’t “target Osterloh.” Members specified that all payments were in line with Germany’s legal guidelines. The offices of VW’s chief financial officer, Frank Witter, and personnel director Karlheinz Blessing were also searched.

Osterloh once earned 750,000 euros (roughly $888,500) in a single year and up to 250,000 in other years. According to Reuters, the labor boss said he would now receive about €8,000 a month.

VW CEO Matthias Müller explained that the pay cuts were an attempt to play it safe until the case was clarified. “We thank the works council for taking this step,” Mueller said.

At present, the investigations revolves around suspected tax evasion. However, simply wasting corporate funds is a legal breach of fiduciary duties in Germany. The works council has maintained that Osterloh’s remuneration was appropriate. “Had he decided to accept an offer to become head of personnel, his remuneration would have been significantly higher. He instead decided to continue to devote his time to the workforce,” it said in a statement.

[Image: Volkswagen ]

Join the conversation
  • SCE to AUX SCE to AUX on Dec 22, 2017

    Must be quite a position; to my American mind, the $888k pay and the job title don't match. I'm less interested in the tax evasion issue than how such high pay could, umm, persuade Mr Osterloh to see things the Volkswagen way.

  • RHD RHD on Dec 26, 2017

    VW is still a mess. How much additional mismanagement and incompetence is going on that never makes it to the public eye?