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marmar

(77,081 posts) Thu Sep 24, 2015, 12:12 PM Sep 2015

What's the punishment for a massive fraud that could destroy your company? 60 million euros

BERLIN-- Martin Winterkorn, who stepped down as chief executive of Volkswagen AG Wednesday due to its widening emissions scandal, could receive compensation of up to EUR60 million ($66.9 million), depending on how the company calculates his severance.

Winterkorn stepped down days after VW VLKAY, -0.68% VOW3, -2.37% admitted to systematically manipulating emissions tests on its diesel-powered cars. Up to 11 million cars could have been affected by the scandal.

According to Volkswagen’s annual report, there are two sources of compensation for Winterkorn upon his departure, as well as perks such as the use of a company car, as long as he is collecting a pension. By the end of 2014, he had amassed a pension worth EUR28.6 million.

But the report also describes a severance payout rule that gives a departing member of the management board the equivalent of a maximum of two years of his total remuneration. ................(more)

http://www.marketwatch.com/story/former-volkswagen-ceo-martin-winterkorn-could-receive-60-million-euros-payoff-2015-09-24

3 replies

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What's the punishment for a massive fraud that could destroy your company? 60 million euros (Original Post) marmar Sep 2015 OP

I hope I live long enough to say I TOLD YOU SO about capitalism being completely randys1 Sep 2015 #1

I am sure ALL the workers who lose their jobs because of this fraud Angry Dragon Sep 2015 #2

this is due to the top-heavy structure of most big companies unblock Sep 2015 #3

randys1

(16,286 posts)

1. I hope I live long enough to say I TOLD YOU SO about capitalism being completely

Reply to marmar (Original post)

Thu Sep 24, 2015, 12:16 PM

Sep 2015

unworkable and why you simply CANT allow individuals to own pieces of earth.

Angry Dragon

(36,693 posts)

2. I am sure ALL the workers who lose their jobs because of this fraud

Reply to randys1 (Reply #1)

Thu Sep 24, 2015, 12:23 PM

Sep 2015

will get the same package

unblock

(52,243 posts)

3. this is due to the top-heavy structure of most big companies

Reply to marmar (Original post)

Thu Sep 24, 2015, 01:14 PM

Sep 2015

the ceo is the center of everything, and therefore in a position to screw the company over after leaving, if so inclined.

a disgruntled ceo can go work for a competitor and take advantage of the vast knowledge of the former company, putting the former company at a very expensive disadvantage. alternatively, the disgruntled ceo could let regulators or prosecutors know where the bodies are buried. too late, in this case(!) but at the time ceos are getting hired, they are in a position to negotiate big, big money to do nothing but avoid damaging their former company.

all big-time ceos negotiate for the same crap, so companies have little choice but to pay. not that they really try to object, the compensation committees are filled with other ceos and would-be ceos, so they like handing out perks that might someday be theirs.

if companies had more flat or compartmentalized structures, this sort of thing wouldn't be as much of a problem. but the corporate world seems to very much like the dictatorial model, despite certain inherent problems.

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