Volkswagen has cut the wages and suspended the bonuses of 14 members of its works council, consisting the council’s head Bernd Osterloh, as public prosecutors look into alleged earlier overpayment.
Osterloh, who as soon as earned 750,000 euros ($888,525) in a single year and as much as 250,000 in other years, said he would now get about 8,000 euros per month, according to an interview on the website IG Metall bei Volkswagen. The website is targeted at union members working for the automaker.
It was revealed in May that German prosecutors were investigating present and former executives at Volkswagen on suspicion that they paid Osterloh an excessive wage. In Germany, wasting corporate funds is legally a breach of fiduciary duty.
Volkswagen and the works council have informed that payments were in line with legal standards, a stance they repeated on Friday.
CEO Matthias Mueller stated that the cuts in pay were an effort to play it safe up until the case was clarified. “We thank the works council for taking this step,” Mueller stated.
In previous month, prosecutors and tax investigators raided the offices of senior automaker officials. The raid by was associated with suspected overpayment and related tax evasion, an individual knowledgeable with the matter said, referring to the potential for overpayment to led higher operating costs and the payment of too little tax.
