VW Cuts Salaries and Bonuses for 9 Executives to Save $16 Million | Carscoops

      The fixed salaries and bonuses for VW board members are set to be cut by 11% in both 2025 and 2026.

      Expectations are also in place for reductions in salaries at the upper management levels.

      These changes at VW may lead to decreased dividend payments for regular shareholders.

      Additionally, VW is aiming to decrease production in Germany by 734,000 units per year.

      As part of cost-cutting efforts, VW plans to eliminate up to 35,000 jobs across Germany over the next five years and reduce the salaries and bonuses of its board members. Unlike many companies that typically cut jobs and wages for employees while leaving management salaries intact, VW is making reductions across the board.

      A report from Germany indicates that VW board members will have their fixed salaries and annual bonuses decreased by 11% in both 2025 and 2026. Their compensation structure will follow a tiered reduction of 8.5% in 2027, 6.5% in 2028, and 5.5% in 2029. These actions are projected to save the company around €15 million ($16.2 million), alongside cuts to management salaries that are anticipated to yield an additional €300 million ($325 million) in savings.

      According to Handelsblatt, the nine members of VW's board earned over €40 million (~$43 million) collectively in 2023, with approximately €9.7 million ($10.5 million) going to CEO Oliver Blume. His pay will also be reduced along with that of other board members.

      Last year, the executive board of VW proposed a 5% cut to their fixed salaries, but this was criticized by the works council as being minimal compared to their overall compensation.

      The changes at VW could also affect ordinary shareholders. The company has aimed for a dividend payout ratio exceeding 30%, but this is expected to drop below that level this year. Furthermore, the annual bonus typically received by about 120,000 local employees at VW may also be adversely affected.

      In addition to job cuts and pay reductions, VW plans to decrease production capacity in Germany by approximately 734,000 units. The Osnabrück plant will stop producing the T-Roc Cabrio in mid-2027. While VW has committed to keeping the plant operational, it has not specified what will be manufactured there in the future.