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Volkswagen CEO to receive $32M pension

21 points by jazzyk ↗ HN
http://fortune.com/2015/09/23/ceo-volkswagen-pension/

The supervisory board thanked him for his "towering contributions" to the company.

Heads I win, tails you lose.

14 comments

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jazzyk
He may also get another $30M or so in severance package, but that's up to the board.
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jazzyk
>revenue from $108B/year to over $200B/year

Yes, they grew revenue, by falsifying the specs of their cars and making them look better than they are. Even if he did not know (hard to believe, as there are reports that the same fraud was happening in Europe), he is ultimately responsible and shouldn't be rewarded for fraud.

existencebox
I really have to question lauding praises on someone under whom massive violations of trust and laws took place. Significant gains are certainly easier with significant moral compromise, and while it could be argued that he wasn't 'in the know' (I haven't been following the story close enough to be familiar with his purview over these things) if he wants to resign as some sort of reconciliatory measure, in my mind that means actually RECONCILING for the incident and not making out like a robber bandit.
wyldfire
CEOs are often seen as these rainmakers when they preside over these gains and scapegoats when companies see their revenue slide.

I wonder if, despite their maximum authority, most companies gain/lose primarily because of independent-from-the-CEO changes in marketing, R&D, the general marketplace/economics, etc.

Maybe v-dub would've gone from 100B to 200B even with the null-CEO or cointoss-CEO.

ageofwant
I have yet to be convinced that a crack "CEO team" consisting of a lawyer, an accountant, two engineers, a Catholic priest and a dedicated tea-boy collectively paid 1/2 of a "equivalent" CEO will not consistently outperform even a superstar CEO.
tw04
The general idea behind a successful CEO is that he's got a trusted team of executives who he delegates to. He isn't personally making changes, but he/she is good at identifying talent and motivating them.

At the end of the day, his people also need to be good at identifying people - so on and so forth. It absolutely can have a big impact, but most of the time it doesn't.

notahacker
I think you're absolutely right. But the CEO is the person that is in regular contact with the board members and fund managers that the company is ultimately answerable to when they overspend and frighten them with the prospect of how much the share price would drop if they voted down the new proposed compensation scheme and replace him[1] with the sort of lesser CEO that would accept a mere $10M pension. That's a lot of negotiation power, especially when the CEO walking away generally will dent that share price.

Whereas if the CEO is considering taking $32M out of the R&D team's budget, you can guarantee that (i) nobody on that team will get anywhere near the company owners to persuade them that this could jeopardise the company's future and (ii) if the CEO is sufficiently keen on that cost saving the company's preferred management consultants will produce an impressive-looking Powerpoint that "independently" argues the cost savings are necessary and efficient.

[1]Not always "him". But nearly always "him"

a3n
> Operating profits more than doubled during his tenure.

How much of that was due to breaking the law? How much profit and reputation will be lost due to breaking the law? How much of that would have happened anyway with any other competent CEO?

This wasn't a reward for his contributions. It was most likely in his contract that he gets it no matter what. His golden parachute.

ageofwant
A potential $20B fine, maybe, with years of litigation is still a good deal after a $50B ensured profit now. This is how you do risk management.

And also why society needs to up the ante.

shepardrtc
Of course they're going to give him money. He made VW a lot of money and fell on his sword for them.

But this isn't just for him, this is a message to all potential successors saying that if they make the company money, then they'll be taken care of no matter what happens.

The only way to make this sort of thing not worthwhile is to fine them a combination of the revenue made from the vehicles that this was in, and also some sort of punitive amount. Just a small punitive amount will simply be written off.

justinlardinois
This always happens when CEOs are ousted from a company. It's just corporate culture. If you're trying to say this a bigger problem with the business world and society in general, then I agree with you, but there aren't too many companies that wouldn't do the same thing.
achonim
I think this Volkswagen buzz is going to add a revolution to the automobile industry, a negative one. We might see emission benchmarks getting altered across the globe. With the news of BMW and Audi also violating the emissions, all these giants are TOO big to be effected by any such fiasco.
[dead] achonim
I think this Volkswagen buzz is going to add a revolution to the automobile industry, a negative one. We might see emission benchmarks getting altered across the globe. With the news of BMW and Audi also violating the emissions, all these giants are TOO big to be effected by any such fiasco.