VW managers payments to face reductions

Volkswagen AG managers will face significant pay reductions as part of a labour agreement to make the automaker more competitive.

Around 4,000 managers will forgo bonuses equal to about 10 per cent of their annual income next year and in 2026, with smaller reductions through the end of the decade. Unionists are urging senior leadership, including CEO Oliver Blume, to forgo more than 10 per cent of their salaries.

The restructuring agreement aims to slash costs at the VW brand while avoiding factory closures. VW shares fell 2.4 per cent in Frankfurt on Monday and are down nearly a quarter this year.

The labour agreement includes reducing capacity at five sites and shrinking the workforce by over 35,000 over the next five years, saving an estimated €4 billion ($4.2 billion) annually.

Attribution: Bloomberg

Subediting: M. S. Salama