Corporate Governance

header icon

A. Remuneration of the Members of the Board of Management

Throughout the reporting period, the Volkswagen Group’s business was impacted by the effects of the Covid-19 pandemic and in particular by limited vehicle availability due to the semiconductor shortage. In this environment, the Volkswagen Group’s deliveries declined year-on-year. Meanwhile, the operating result improved versus the prior year due to margin and mix effects. The Board of Management members also benefited from this in their remuneration.

I. Principles of Board of Management remuneration

The remuneration of the Board of Management is based on the remuneration system developed by the Supervisory Board and adopted on December 14, 2020 with effect from January 1, 2021. The remuneration system for the members of the Board of Management implements the requirements of the AktG as amended by ARUG II and takes into account the recommendations of the German Corporate Governance Code (the Code) in the version dated December 19, 2019 (which entered into force on March 20, 2020). The Annual General Meeting approved the remuneration system on July 22, 2021 with 99.61 % of the votes cast.

The new remuneration system has applied since January 1, 2021 to all Board of Management members with service contracts newly concluded or renewed after the Supervisory Board resolution of December 14, 2020. For the Board of Management members already appointed at the time of the resolution by the Supervisory Board on December 14, 2020, the new remuneration system also applies in principle from January 1, 2021. Until such time as their contracts are renewed, however, the following exceptions apply: the performance share plan of the Board of Management members already appointed continues to have only a three-year performance period but otherwise corresponds to the performance share plan described in this system. Penalty and clawback rules will only apply to Board of Management members already appointed on renewal of their contracts.

The level of the Board of Management remuneration should be appropriate and attractive in the context of the Company’s national and international peer group. Criteria include the tasks of the individual Board of Management member, their personal performance, the economic situation, and the performance of and outlook for the Volkswagen Group, as well as how customary the remuneration is when measured against the peer group and the remuneration structure that applies to other areas of the Volkswagen Group. In this context, comparative studies on remuneration are conducted on a regular basis.

In this chapter, we provide an overview of the remuneration system for the Board of Management members in fiscal year 2021 before going into the components of the remuneration in fiscal year 2021.

II. Overview of the remuneration components

The table below provides an overview of the components of the remuneration system applicable for fiscal year 2021 for the members of the Board of Management. The table also outlines the composition of the individual remuneration components and explains their targets, particularly in respect of how the remuneration will promote the Company’s long-term performance. A more detailed description of the remuneration system applicable for fiscal year 2021 for the members of the Board of Management is available at www.volkswagenag.com/en/InvestorRelations/corporate-governance/Remuneration.html.

Remuneration system for 2021

Component

 

Composition

 

Target

 

 

 

 

 

Fixed remuneration components

Base salary

 

  • Twelve equal installments payable at month-end

  • Chair of the Board of Management: €2,235,000; Board of Management member: €1,420,000

 

The basic remuneration and fringe benefits are intended to reflect the tasks and responsibility of the Board of Management members, provide a basic income and prevent them from taking inappropriate risks.

Fringe benefits

 

  • Fringe benefit allowance (€175,000) covers certain benefits at the discretion of the Board of Management member, for example:

    • Company cars

    • Preventive medical check-ups

    • Allowances for health and long-term care insurance

    • Accident insurance

  • Crediting of benefits against the fringe benefit allowance where these are subject to payroll tax

  • Payment of the remaining amount

 

Occupational retirement provision

 

  • Defined contribution plan by means of direct commitments to retirement, disability and surviving dependents’ benefits

  • Normally when the members reach the age of 65 (or 63 in the case of Board of Management members who took office before January 1, 2020)

  • Annual pension contribution of 40% of the contractually agreed base salary (or 50% in the case of Board of Management members who took office before January 1, 2018)

 

The occupational retirement provision is intended to provide Board of Management members with an adequate pension when they retire.

Variable remuneration components

Annual bonus

 

  • Plan type: Target bonus

  • Chair of the Board of Management: €3,045,000; Board of Management member: €1,350,000

  • Cap: 180% of the target amount

  • Assessment period: fiscal year

  • Performance criteria:

    • Financial subtargets:

      • Operating result (OR) incl. Chinese joint ventures1 (proportionate) (50%) and operating return on sales (50%)

      • The Supervisory Board defines minimum, target, and maximum values for the financial subtargets for each fiscal year. The minimum corresponds to subtarget achievement of 0% of the OR including Chinese joint ventures (proportionate) or 50% of the operating return on sales, while the target corresponds to a subtarget achievement of 100% in each case and the maximum to subtarget achievement of 150%; interim values are interpolated on a linear basis.

      • Overall financial target achievement = subtarget achievement “operating result including Chinese joint ventures (proportionate)” x 50% + “subtarget achievement operating return on sales” x 50%

    • ESG factor

      • Subtargets of 50% each for the Environment (decarbonization index) and Social (sentiment rating and diversity index) as well as the Governance factor between 0.9 and 1.1 (compliance & integrity, standard value of 1.0)

      • The Supervisory Board defines minimum, target, and maximum values for the Environment and Social subtargets for each fiscal year. The minimum, target, and maximum values correspond to subtarget achievement of 0.7, 1.0, and 1.3, respectively; interim values are interpolated on a linear basis.

      • The Supervisory Board sets the Governance factor after the end of the fiscal year taking into account the collective performance of the Board of Management as a whole and the performance of each Management Board member individually.

      • Calculation of the ESG factor: (Environment subtarget achievement x 50% + Social subtarget achievement x 50%) x Governance factor (0.9 – 1.1)

    • Annual bonus payment amount = individual target amount x financial target achievement x ESG factor

    • Payment: In cash in the month following approval of the consolidated financial statements for the fiscal year in question

 

The annual bonus is designed to motivate Board of Management members to pursue ambitious targets.
The financial performance targets support the strategic target of achieving competitive profitability.
Integration of the sustainability targets takes the importance of ESG factors into account.

Long-term incentive (LTI)

 

  • Plan type: Phantom performance share plan

  • Performance period: measured forward over four years2

  • Chair of the Board of Management: €3,830,000; Board of Management member: €1,800,000

  • Cap: 200% of the target amount

  • Allocation of performance shares: At the start of each fiscal year, the individually agreed target amount is divided by the arithmetic mean of the closing prices of Volkswagen’s preferred shares (German Securities Identification Number: 766403) in the Xetra trading system of Deutsche Börse AG on the last 30 trading days prior to January 1 in the respective performance period (initial reference price).

  • Target-setting: At the start of the performance period, the Supervisory Board defines minimum, target and maximum values for EPS as presented in the annual report as audited, fully diluted earnings per Volkswagen preferred share from the Company’s continuing and discontinued operations; the EPS minimum corresponds to target achievement of 50%, the EPS target corresponds to target achievement of 100% and the EPS maximum corresponds to target achievement of 150%.

  • Determination of one-quarter of the allocated performance shares at the end of each fiscal year depending on EPS target achievement

  • Calculation of the payment amount: fixed performance shares are multiplied by the arithmetic mean of the closing prices of Volkswagen’s preferred shares in the Xetra trading system of Deutsche Börse AG on the last 30 trading days prior to the end of the performance period (“closing reference price”) and the dividends paid out per Volkswagen preferred share during the performance period (“dividend equivalent”)

  • Payment: In cash in the month following approval of the consolidated financial statements for the last fiscal year of the respective performance period.

  • If the service contract ends before the end of the performance period due to a bad leaver case (extraordinary termination for cause or a breach of a contractual or post-contractual restraint on competition), all performance shares will be forfeited.

 

The long-term incentive serves to align the remuneration of the Board of Management members with the Company’s long-term performance. The financial performance target EPS (earnings per share) in conjunction with share price performance and the dividends paid, measured over four years, ensures the long-term effect of the behavioral incentives and supports the strategic target of achieving competitive profitability.

Other services

Special payment

 

  • Only on the basis of a separate contractual agreement with the Board of Management member

  • The agreement is made in advance for the fiscal year and defines performance criteria for the special payment.

  • There are currently no special payment agreements with Board of Management members.

 

Special payments are intended to reward outstanding and exceptional performance and may only be granted if they are in the Company’s interest and are associated with future benefits for the Company.

Benefits agreed with new Board of Management members for a defined period of time or for the entire term of their service contracts

 

  • Only on the basis of a separate contractual agreement with the new Board of Management member

  • Payments to compensate for declining variable remuneration or other financial disadvantages

  • Benefits in connection with a relocation

  • Minimum remuneration guarantee

  • New Board of Management members did not receive any special benefits in the past fiscal year.

 

(Compensation) payments are designed to attract qualified candidates.

Other remuneration provisions

Penalty and clawback rules3

 

  • The Supervisory Board can reduce or request repayment of the annual bonus and LTI by up to 100% in the event of relevant misconduct during the assessment period.

  • A clawback is not permissible if more than three years have elapsed since the bonus was paid.

 

Penalty and clawback rules are intended to counteract individual misconduct and negligence on the part of the organization.

Maximum remuneration

 

  • The relevant components are the base salary paid for the respective fiscal year, the fringe benefits granted, the service cost for occupational retirement provision, the annual bonus granted for the respective fiscal year and paid out in the following year, the performance share plan paid out in the respective fiscal year and for which the performance period ended immediately before the respective fiscal year, any special payment granted for the respective fiscal year and any benefits granted to new Board of Management members.

  • For Board of Management members €7,000,000 (gross) per fiscal year and for the chair of the Board of Management €12,000,000 (gross) per fiscal year

  • If the maximum remuneration is exceeded, the annual bonus will be reduced; if a reduction is not sufficient, the Supervisory Board may, at its discretion, reduce other remuneration components or request repayment of remuneration paid out.

 

The aim of the maximum remuneration is to ensure that the remuneration of Board of Management members is not inappropriately high when measured against the peer group.

Cap on cash remuneration

 

  • Additional to maximum remuneration

  • The cash remuneration includes the base salary paid in the respective fiscal year, the annual bonus granted for the respective fiscal year and paid out in the following year, the performance share plan paid in the respective fiscal year and any special payment granted for the respective fiscal year.

  • For Board of Management members €5,500,000 (gross) per fiscal year and for the chair of the Board of Management €10,000,000 (gross) per fiscal year.

 

The cap on cash remuneration is intended to prevent unacceptably high disbursements in the individual fiscal year.

1

Equity-accounted companies in China.

2

For the Board of Management members already appointed prior to December 14, 2020, a three-year performance period continues to apply until their contracts are renewed. In all
other respects, the performance share plan corresponds mutatis mutandis to that described for fiscal year 2021.

3

For the Board of Management members already appointed prior to December 14, 2020, penalty and clawback rules only apply once their contracts have been renewed.

III. Remuneration of the Board of Management members appointed in fiscal year 2021

1. Board of Management members in fiscal year 2021

The members of the Volkswagen AG Board of Management in fiscal year 2021 were as follows:

  • Herbert Diess, Chair of the Board of Management since April 13, 2018, member of the Board of Management since July 1, 2015
  • Murat Aksel, member of the Board of Management since January 1, 2021
  • Arno Antlitz, member of the Board of Management since April 1, 2021
  • Oliver Blume, member of the Board of Management since April 13, 2018, also Chair of the Executive Board of Dr. Ing. h.c. F. Porsche AG
  • Markus Duesmann, member of the Board of Management since April 1, 2020, also Chair of the Board of Management of AUDI AG
  • Gunnar Kilian, member of the Board of Management since April 13, 2018
  • Thomas Schmall-von Westerholt, member of the Board of Management since January 1, 2021
  • Hiltrud Dorothea Werner, member of the Board of Management since February 1, 2017
  • Frank Witter, member of the Board of Management from October 7, 2015, left the Board effective March 31, 2021

For their work on the Board of Management, its members do not receive additional remuneration for discharging other mandates on management bodies, supervisory boards or similar, especially in other companies of the Volkswagen Group. If such remuneration is nevertheless granted, it is counted toward the remuneration for their work as a member of the Board of Management of Volkswagen AG.

2. Remuneration granted and owed in fiscal year 2021

In accordance with section 162(1) sentence 1 of the AktG, the remuneration report must report on the remuneration granted and owed to each individual member of the Board of Management in the last fiscal year. These terms are understood as follows:

  • The term “granted” (gewährt) refers to the actual receipt (Zufluss) of the remuneration component.
  • The term “owed” (geschuldet) refers to all legally existing liabilities for remuneration components that are due but have not yet been fulfilled.
  • This understanding differs from the terms “benefits granted” and “benefits received” used in previous remuneration reports. As per the 2017 version of the Code, “benefits granted” included, regardless of when they were to be paid out, all remuneration components that had been agreed at least in principle for a member of the Board of Management in the fiscal year and for which the amount could be estimated. With the introduction of section 162 of the AktG, it is no longer possible to maintain the distinction between “granted” and “received” as previously understood. Instead, the meaning of the term “granted” in section 162 of the AktG corresponds to the previous understanding of “received”.

2.1. Overview in the tables

The following tables show the remuneration actually received by members of the Board of Management in fiscal year 2021. The time of actual payment is not relevant. The remuneration reported as granted in fiscal year 2021 thus consists of the base salary paid out in fiscal year 2021, the fringe benefits, the annual bonus paid in the month following the approval of the Company’s consolidated financial statements for fiscal year 2021 and the LTI for the performance period 2018 to 2020 paid in fiscal year 2021. As the Company was not in default on the payment of remuneration components, no remuneration owed is reported in the tables.

The relative shares shown in the tables relate to the remuneration components granted and owed in the respective fiscal year in accordance with section 162(1) sentence 1 of the AktG. They thus include all benefits actually received in the respective fiscal year, regardless of the fiscal year for which the Board of Management members received them. The relative shares indicated here are thus not comparable with the respective relative shares of fixed and variable remuneration components as part of total remuneration in the description of the remuneration system according to section 87a(1) sentence 2 no. 3 of the AktG. The shares indicated in the remuneration system relate to the targets agreed for the relevant fiscal year, irrespective of the time at which the respective remuneration component was paid out.

Pension expense is reported as service cost within the meaning of IAS 19. The service cost in accordance with IAS 19 does not constitute remuneration granted or owed within the meaning of section 162(1) sentence 1 of the AktG as it is not actually received by the Board of Management member in the reporting year.

Maximum remuneration corresponds to maximum remuneration within the meaning of section 87a(1) sentence 2 no. 1 of the AktG in accordance with the remuneration system adopted by the Supervisory Board and approved by the Annual General Meeting. As in the past, in addition to maximum remuneration, a limit on cash remuneration, which includes the base salary paid out for the relevant fiscal year, the annual bonus granted for the relevant fiscal year and paid out in the subsequent year, the performance share plan paid out in the relevant fiscal year and any special payment granted for the relevant fiscal year, has been agreed with the members of the Board of Management.

Board of Management service contracts that are new or have been renewed since the Supervisory Board adopted the new remuneration system for the members of the Board of Management on December 14, 2020 also contain the penalty and clawback rules provided for in this remuneration system. The service contracts of the Board of Management members Ms. Werner, Mr. Blume and Mr. Duesmann, who were already appointed as of December 14, 2020, therefore do not contain penalty or clawback rules, nor did Mr. Witter’s service contract, which ended on June 30, 2021. Volkswagen AG did not make use of the existing penalty and clawback rules in fiscal year 2021.

 

 

HERBERT DIESS

 

 

Chair,
Volume brand group,
China

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

2,235,000.00

 

26.0

Fringe benefits

 

178,231.00

 

2.1

Total

 

2,413,231.00

 

28.1

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

5,294,646.00

 

61.6

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

886,668.16

 

10.3

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

8,594,545.16

 

100.0

 

 

 

 

 

Pension expenses

 

1,717,037.00

 

x

Total remuneration including pension expenses

 

10,311,582.16

 

x

Maximum remuneration

 

12,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

MURAT AKSEL

 

 

Purchasing

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,420,000.00

 

36.0

Fringe benefits

 

180,481.00

 

4.6

Total

 

1,600,481.00

 

40.5

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

2,347,380.00

 

59.5

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

 

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

3,947,861.00

 

100.0

 

 

 

 

 

Pension expenses

 

1,076,359.00

 

x

Total remuneration including pension expenses

 

5,024,220.00

 

x

Maximum remuneration

 

7,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

ARNO ANTLITZ

 

 

Finance and IT (since April 1, 2021)

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,065,000.00

 

36.0

Fringe benefits

 

135,764.00

 

4.6

Total

 

1,200,764.00

 

40.5

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

1,760,535.00

 

59.5

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

 

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

2,961,299.00

 

100.0

 

 

 

 

 

Pension expenses

 

883,496.00

 

x

Total remuneration including pension expenses

 

3,844,795.00

 

x

Maximum remuneration

 

5,250,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

OLIVER BLUME

 

 

Chair of the Executive Board of
Dr. Ing. h.c. F. Porsche AG
Sport & Luxury brand group

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,420,000.00

 

33.0

Fringe benefits

 

180,442.00

 

4.2

Total

 

1,600,442.00

 

37.2

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

2,347,380.00

 

54.6

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

351,318.72

 

8.2

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

4,299,140.72

 

100.0

 

 

 

 

 

Pension expenses

 

1,092,470.00

 

x

Total remuneration including pension expenses

 

5,391,610.72

 

x

Maximum remuneration

 

7,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

MARKUS DUESMANN

 

 

Chair of the Board of Management of AUDI AG, Premium brand group

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,420,000.00

 

35.8

Fringe benefits

 

203,048.00

 

5.1

Total

 

1,623,048.00

 

40.9

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

2,347,380.00

 

59.1

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

 

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

3,970,428.00

 

100.0

 

 

 

 

 

Pension expenses

 

1,120,404.00

 

x

Total remuneration including pension expenses

 

5,090,832.00

 

x

Maximum remuneration

 

7,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

GUNNAR KILIAN

 

 

Human Resources and Truck & Bus

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,420,000.00

 

26.6

Fringe benefits

 

180,442.00

 

3.4

Total

 

1,600,442.00

 

30.0

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

2,347,380.00

 

44.0

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

1,383,318.72

 

25.9

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

5,331,140.72

 

100.0

 

 

 

 

 

Pension expenses

 

1,309,055.00

 

x

Total remuneration including pension expenses

 

6,640,195.72

 

x

Maximum remuneration

 

7,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

THOMAS SCHMALL-VON WESTERHOLT

 

 

Technology,
Chair of the Board of Management of
Volkswagen Group Components

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,420,000.00

 

36.0

Fringe benefits

 

180,235.00

 

4.6

Total

 

1,600,235.00

 

40.5

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

2,347,380.00

 

59.5

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

 

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

3,947,615.00

 

100.0

 

 

 

 

 

Pension expenses

 

1,040,965.00

 

x

Total remuneration including pension expenses

 

4,988,580.00

 

x

Maximum remuneration

 

7,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

HILTRUD DOROTHEA WERNER

 

 

Integrity and Legal Affairs

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

1,420,000.00

 

25.0

Fringe benefits

 

179,781.00

 

3.2

Total

 

1,599,781.00

 

28.2

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

2,149,931.72

 

37.9

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

1,930,068.28

 

34.0

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

5,679,781.00

 

100.0

 

 

 

 

 

Pension expenses

 

1,261,258.00

 

x

Total remuneration including pension expenses

 

6,941,039.00

 

x

Maximum remuneration

 

7,000,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

 

 

FRANK WITTER

 

 

Finance and IT (until March 31, 2021)

 

 

2021

 

 

 

%

 

 

 

 

 

Fixed remuneration components

 

 

 

 

Base salary

 

355,000.00

 

32.0

Fringe benefits

 

45,012.00

 

4.1

Total

 

400,012.00

 

36.1

Variable remuneration components

 

 

 

 

One-year variable remuneration/annual bonus

 

586,845.00

 

52.9

Multiyear variable remuneration/long-term incentive (LTI)

 

 

 

 

LTI (performance share plan) 2018 – 2020

 

122,517.07

 

11.0

Other remuneration

 

 

 

 

Special payments

 

 

Special benefits paid to new Board of Management members

 

 

Total remuneration granted and owed

 

1,109,374.07

 

100.00

 

 

 

 

 

Pension expenses

 

271,099.00

 

x

Total remuneration including pension expenses

 

1,380,473.07

 

x

Maximum remuneration

 

1,750,000.00

 

x

Clawback in accordance with section 162(1) sentence 2 no. 4 of the AktG

 

 

x

ANNUAL BONUS

Calculation of the payment amount for the annual bonus (graphic)

2.2 Explanation

2.2.1 Performance criteria for variable remuneration

a) Performance criteria for the annual bonus

aa) Financial subtargets

The following overviews show the threshold values, target values and maximum values set by the Supervisory Board for fiscal year 2021 for the financial subtargets operating result, including Chinese joint ventures (proportionate), and operating return on sales (RoS), along with the actual figures and target achievement levels in percent in fiscal year 2021.

COMPONENT 1: OPERATING RESULT INCLUDING CHINESE JOINT VENTURES (PROPORTIONATE)

€ billion

 

2021

 

 

 

Maximum value

 

25.0

100% target level

 

17.0

Threshold value

 

9.0

Actual

 

22.3

Target achievement (in %)

 

133

COMPONENT 2: OPERATING RETURN ON SALES

%

 

2021

 

 

 

Maximum value

 

8.0

100% target level

 

6.0

Threshold value

 

4.0

Actual

 

7.7

Target achievement (in %)

 

143

bb) ESG factor

The following overview shows the minimum values, target values and maximum values set by the Supervisory Board for fiscal year 2021 for the environmental (decarbonization index) and social (sentiment rating and diversity index) subtargets along with the actual figures and target achievement levels in fiscal year 2021. The decarbonization index measures the emissions of CO2 and CO2 equivalents by the passenger car- and light commercial vehicle-producing brands over the entire life cycle and documents the progress we are making in improving our carbon footprint. The sentiment rating is an important parameter of the opinion survey – an employee poll with which the Group regularly gathers information regarding employee satisfaction. The diversity index is used worldwide to determine the development of the proportion of women in management and the internationalization of top management. The indicator provides incentives for an exemplary leadership and corporate culture. The governance factor is a means for the Supervisory Board to express its satisfaction with the expected and actual behavior of the Board of Management with regard to the criteria of integrity and compliance. As a rule, the governance factor should be 1.0 and may only be reduced to 0.9 or raised to 1.1 in exceptional circumstances based on a professional judgment of the Supervisory Board. For fiscal year 2021, the Supervisory Board has set the governance factor at the standard value of 1.0 for all current Board of Management members; it takes into account and assesses the collective performance of the Board of Management as a whole and the performance of each Management Board member individually.

 

 

ENVIRONMENTAL

 

 

 

SOCIAL

 

 

Decarbonization index

 

 

 

Sentiment rating

 

Diversity index

in tCO2e/vehicle

 

2021

 

Points

 

2021

 

2021

 

 

 

 

 

 

 

 

 

Maximum value

 

45.5

 

Maximum value

 

81.5

 

124

100% target level

 

46.9

 

100% target level

 

77.5

 

119

Minimum value

 

47.7

 

Minimum value

 

73.5

 

113

Actual

 

45.9

 

Actual

 

82.3

 

127

Target achievement (factor)

 

1.21

 

Target achievement (factor)

 

1.30

 

1.30

LONG-TERM INCENTIVE (LTI): (PHANTOM) PERFORMANCE SHARE PLAN (PSP)

Long-term incentive (LTI): (Phantom) performance share plan (PSP) (graphic)

b) Performance criteria for the long-term incentive (LTI)

The four-year performance share plan has applied since January 1, 2021 to all Board of Management members with service contracts newly concluded or renewed after the Supervisory Board resolution of December 14, 2020. This includes Mr. Antlitz, Mr. Aksel and Mr. Schmall-von Westerholt. For the Board of Management members already appointed at the time of the Supervisory Board resolution of December 14, 2020, a three-year performance period continues to apply until their contracts are renewed. This is the case for Ms. Werner, Mr. Duesmann, Mr. Blume and Mr. Witter. The four-year performance share plan applies pro rata from July 10, 2021 for Mr. Diess and pro rata from December 10, 2021 for Mr. Kilian.

INFORMATION ON THE PERFORMANCE SHARES

 

 

PERFORMANCE PERIOD 2018 – 2020

 

PERFORMANCE PERIOD 2019 – 2021

 

PERFORMANCE PERIOD 2020 – 2022

 

PERFORMANCE PERIOD 2021 – 2023

 

PERFORMANCE PERIOD 2021 – 2024

 

Number of performance shares allocated at the grant date

 

Number of performance shares allocated at the grant date

 

Number of performance shares allocated at the grant date

 

Number of performance shares allocated at the grant date

 

Number of performance shares allocated at the grant date

 

 

 

 

 

 

 

 

 

 

 

Herbert Diess

 

19,212

 

26,040

 

21,585

 

13,368

 

12,313

Murat Aksel (since January 1, 2021)

 

 

 

 

 

12,069

Arno Antlitz (since April 1, 2021)

 

 

 

 

 

9,052

Oliver Blume

 

7,614

 

12,238

 

10,144

 

12,069

 

Markus Duesmann

 

 

 

7,608

 

12,069

 

Gunnar Kilian

 

7,614

 

12,238

 

10,144

 

11,342

 

727

Thomas Schmall-von Westerholt (since January 1, 2021)

 

 

 

 

 

12,069

Hiltrud Dorothea Werner

 

10,624

 

12,238

 

10,144

 

12,069

 

Frank Witter (until March 31, 2021)

 

10,624

 

12,238

 

10,144

 

3,018

 

Total

 

55,688

 

74,992

 

69,769

 

63,935

 

46,230

bb) EPS performance

The following overview shows the minimum value, target value and maximum value set by the Supervisory Board at the beginning of the performance period for the performance share plan 2018–2020, which was paid out in fiscal year 2021, along with the actual figure and target achievement level in percent.

PERFORMANCE PERIOD 2018 – 2020

 

2018

 

2019

 

2020

 

 

 

 

 

 

 

Maximum value

 

30.0

 

30.0

 

30.0

100% target level

 

20.0

 

20.0

 

20.0

Minimum value

 

10.0

 

10.0

 

10.0

Actual

 

23.63

 

26.66

 

16.66

Target achievement (in %)

 

118

 

133

 

83

The following overviews show the minimum value, target value and maximum value set by the Supervisory Board at the beginning of the performance periods 2019 −2021, 2020 −2022 and 2021–2023 or 2021–2024 along with the actual figures and target achievement levels attained in percent so far for the individual years of the assessment period up to and including 2021. The performance share plans for the performance periods 2019 −2021, 2020 −2022 and 2020–2023 or 2021–2024 were not due in fiscal year 2021 and have not yet been paid out; they therefore do not constitute remuneration granted or owed in fiscal year 2021.

PERFORMANCE PERIOD 2019 – 2021

 

2019

 

2020

 

2021

 

 

 

 

 

 

 

Maximum value

 

30.0

 

30.0

 

30.0

100% target level

 

20.0

 

20.0

 

20.0

Minimum value

 

10.0

 

10.0

 

10.0

Actual

 

26.66

 

16.66

 

29.65

Target achievement (in %)

 

133

 

83

 

148

PERFORMANCE PERIOD 2020 – 2022

 

2020

 

2021

 

 

 

 

 

Maximum value

 

30.0

 

30.0

100% target level

 

20.0

 

20.0

Minimum value

 

10.0

 

10.0

Actual

 

16.66

 

29.65

Target achievement (in %)

 

83

 

148

PERFORMANCE PERIOD 2021 – 2023

 

2021

 

 

 

Maximum value

 

30.0

100% target level

 

20.0

Minimum value

 

10.0

Actual

 

29.65

Target achievement (in %)

 

148

PERFORMANCE PERIOD 2021 – 2024

 

2021

 

 

 

Maximum value

 

30.0

100% target level

 

20.0

Minimum value

 

10.0

Actual

 

29.65

Target achievement (in %)

 

148

cc) Reference prices/dividend equivalent for the performance periods

The relevant initial reference price, closing reference price and dividend equivalent for the performance period 2018–2020 can be found in the following overview.

 

 

PERFORMANCE PERIOD

 

 

2018 – 2020

 

 

 

Initial reference price

 

169.42

Closing reference price

 

149.14

Dividend equivalent

 

 

2018

 

3.96

2019

 

4.86

2020

 

4.86

The following overview shows the initial reference price, closing reference price and dividend equivalent for the performance share plans not yet due and not yet paid out for the performance periods 2019–2021, 2020–2022 and 2021–2023 or 2021–2024.

 

 

PERFORMANCE PERIOD

 

 

2019 – 2021

 

2020 – 2022

 

2021 – 2023

 

2021 – 2024

 

 

 

 

 

 

 

 

 

Initial reference price

 

147.08

 

177.44

 

149.14

 

149.14

Closing reference price

 

175.75

 

1

 

1

 

1

Dividend equivalent

 

 

 

 

 

 

 

 

2019

 

4.86

 

 

 

2020

 

4.86

 

4.86

 

 

2021

 

4.86

 

4.86

 

4.86

 

4.86

1

Determined at the end of the performance period.

dd) Advances

In the introductory phase of the performance share plan, the members of the Board of Management who were Board members as of December 31, 2016 generally received advances of 80 % of their target amount for the 2017 to 2019 and 2018 to 2020 performance periods. Mr. Blume received corresponding advances for the performance periods 2018 to 2020 (proportionate) and 2019 to 2021. The advances were paid after the first year of the relevant performance period. Final settlement is based on actual achievement of targets at the end of the relevant three-year performance period.

2.2.2 Conformity with the remuneration system

The remuneration granted and owed to the Board of Management members in fiscal year 2021 meets the requirements of the remuneration system for the members of the Board of Management. There was no deviation from the applicable remuneration system in fiscal year 2021. There was no need to reduce the payments related to the annual bonus and performance share plan, as they did not exceed 180 % of the target amount for the annual bonus or 200 % of the target amount for the performance share plan. The total remuneration granted and owed to the Board of Management members in fiscal year 2021 did not exceed the maximum remuneration envisaged by the remuneration system. Due to the base salary paid out for fiscal year 2021, the annual bonus granted for fiscal year 2021 and paid out at the beginning of fiscal year 2022, and the performance share plan paid out in fiscal year 2021 for the 2018 to 2020 performance period, Board of Management member Ms. Werner would have received total cash remuneration above the agreed cash remuneration cap of €5.5 million gross in fiscal year 2021. Against this background, the payment amount from the annual bonus was reduced by the excess amount of €197,448.28. The table entitled “Remuneration granted and owed” therefore shows the reduced annual bonus amount for Ms. Werner. The Supervisory Board of Volkswagen AG reappointed Mr. Diess as a member of the Board of Management in fiscal year 2021 with effect from the beginning of July 10, 2021 and named him Chair of the Board of Management, thereby ending his existing appointment with effect from the end of July 9, 2021. A new service contract was concluded in this context, the terms of which correspond to the remuneration system applicable to members of the Volkswagen AG Board of Management from January 1, 2021. A four-year performance share plan has thus applied to Mr. Diess since July 10, 2021. For fiscal year 2021, the LTI was therefore based pro rata on a three-year performance share plan up to and including July 9, 2021 and a four-year performance share plan from July 10, 2021. The penalty and clawback rules were consequently only applicable as from July 10, 2021. Volkswagen AG also reappointed Mr. Kilian as a member of the Board of Management with effect from the beginning of December 10, 2021, thereby ending his existing appointment with effect from the end of December 9, 2021. A new service contract was concluded in this context, the terms of which correspond to the remuneration system applicable to members of the Volkswagen AG Board of Management from January 1, 2021. In line with the arrangements for Mr. Diess, a four-year performance share plan applied pro rata to Mr. Kilian starting on December 10, 2021, along with the penalty and clawback rules.

PENSIONS OF THE MEMBERS OF THE BOARD OF MANAGEMENT IN 2021 IN ACCORDANCE WITH IAS 19

 

Present value

 

Pension expenses in fiscal year 2021

 

 

 

 

 

Herbert Diess

 

8,736,404.00

 

1,717,037.00

Murat Aksel

 

1,076,359.00

 

1,076,359.00

Arno Antlitz (since April 1, 2021)

 

883,496.00

 

883,496.00

Oliver Blume

 

3,669,616.00

 

1,092,470.00

Markus Duesmann

 

1,741,168.00

 

1,120,404.00

Gunnar Kilian

 

4,313,101.00

 

1,309,055.00

Thomas Schmall-von Westerholt

 

1,040,965.00

 

1,040,965.00

Hiltrud Dorothea Werner

 

5,724,252.00

 

1,261,258.00

Frank Witter (until March 31, 2021)

 

 

271,099.00

Total

 

27,185,361.00

 

9,772,143.00

2.2.3 Benefits and pension commitments in connection with termination

a) Benefits and pension commitments to Board of Management members for early termination

The remuneration system for the members of the Board of Management and the service contracts of the Board of Management members provide for severance payments in the event that an appointment as member of the Board of Management is revoked. In such cases – except where there is good cause entitling the Company to terminate the service contract prematurely or where the appointment is revoked due to a gross breach of duty – the Board of Management member receives a gross severance payment in the amount of the total remuneration of the past financial year up to the end of the regular term of the appointment, for a maximum of two years, calculated as of the date of the termination of the appointment as member of the Board of Management. Any special payment will not be taken into account for the calculation. Should a Board of Management member leave during the course of the first fiscal year of the appointment, the calculation will by way of exception be based on the expected total remuneration for the current fiscal year. The severance payment will be paid in a maximum of 24 monthly installments from the time of the termination of the appointment as a member of the Company’s Board of Management. Contractual remuneration paid by the Company for the period from the termination of the appointment until the end of the service contract will be offset against the severance payment. Should Board of Management members take up other work after the termination of their appointment, the amount of the severance payment will be reduced by the amount of the income earned from that work. Should a post-contractual non-compete covenant be agreed, the severance payment will be offset against the compensation received for observing the post-contractual non-compete covenant.

The members of the Board of Management are also entitled to a pension and to a surviving dependents’ pension as well as the use of company cars for the period in which they receive their pension in the event of early termination of their service on the Board of Management.

b) Pension commitments to Board of Management members for regular termination of service

In the event of regular termination of their service on the Board of Management, the members of the Board of Management are entitled to a pension, including a surviving dependents’ pension, as well as the use of company cars for the period in which they receive their pension. The agreed benefits are paid or made available when the Board of Management member reaches the age of 63, or in Mr. Duesmann’s, Mr. Aksel’s, Mr. Schmall-von Westerholt’s and Mr. Antlitz’s case, when they reach the age of 65.

The Board of Management members received a defined contribution plan, which is based in principle on a works agreement that also applies to the employees of Volkswagen AG covered by collective agreements and includes retirement, invalidity and surviving dependents’ benefits. A pension contribution in the amount of 50 % of the base salary for Ms. Werner and Mr. Diess and in the amount of 40 % of the base salary for Mr. Aksel, Mr. Blume, Mr. Duesmann, Mr. Kilian, Mr. Schmall-von Westerholt and Mr. Antlitz is paid to Volkswagen Pension Trust e.V. at the end of the calendar year for each year they are appointed to the Board of Management. The pension contribution for Mr. Witter was 50 %. The annual pension contributions result in modules of what is, in principle, a lifelong pension in line with the arrangements that also apply to employees covered by collective agreements.

The individual pension modules vest immediately upon payment to Volkswagen Pension Trust e.V. Instead of a lifelong pension, benefits can optionally be paid out as a lump sum or in installments when the beneficiary reaches retirement age. Volkswagen AG has assumed responsibility for pension entitlements due to Mr. Witter from the time before his service with the Company. The earliest point at which he can draw his pension is when he reaches the age of 60; for his other pension entitlements, the earliest point at which Mr. Witter may retire is at the age of 62.

There were no changes to these commitments in fiscal year 2021.

The overview on the previous page shows the pensions for the individual members of the Board of Management in fiscal year 2021, indicating the present value and the pension expense for the Company during the last fiscal year.

c) Benefits and pension commitments to Board of Management members who left in fiscal year 2021

Mr. Witter left in fiscal year 2021. He was originally appointed as a member of the Volkswagen AG Board of Management until the end of June 30, 2021. Mr. Witter’s appointment to the Board of Management of Volkswagen AG was terminated early by mutual agreement, effective March 31, 2021. Due to this termination, Volkswagen AG concluded a termination agreement with Mr. Witter. The subject of this termination agreement included the continuation of his service contract until its regular termination date, i.e. until the end of June 30, 2021. Volkswagen AG agreed to continue paying Mr. Witter his monthly base salary until the termination date of his service contract and to grant the annual bonus for 2021 and the LTI for the performance period 2021–2023 on a pro rata basis (6/12). Until the end of his service contract, Mr. Witter retained private use of his company cars and was entitled to fringe benefits.

2.2.4 No clawback claims in fiscal year 2021

Volkswagen AG did not seek to claw back any variable remuneration components from individual Board of Management members in fiscal year 2021. The prerequisites for a clawback claim did not apply.

IV. Remuneration of former Board of Management members

In accordance with section 162(1) sentence 1 of the AktG, the remuneration granted and owed to former members of the Board of Management must also be reported.

1. Remuneration granted and owed in fiscal year 2021 (individualized)

Under section 162(5) sentence 2 of the AktG, the obligation to report individually on the remuneration granted and owed to former Board of Management members also extends to remuneration granted and owed in the ten years after their most recent term of office on the Board of Management or Supervisory Board at Volkswagen AG.

The following tables show the remuneration granted and owed in fiscal year 2021 to the individual former members of the Board of Management who left after fiscal year 2011. As with the current Board of Management members, the annual bonus paid at the beginning of 2022 to former Board of Management members for the 2021 fiscal year is counted as remuneration granted in fiscal year 2021.

2. Total remuneration granted to former Board of Management members

Section 162(5) sentence 2 of the AktG does not require the Company to report individually on the remuneration granted and owed in 2021 to former members of the Board of Management whose most recent term of office on the Board of Management or Supervisory Board at Volkswagen AG came to an end before the beginning of 2012 and who were then granted and owed remuneration for more than ten years after leaving Volkswagen AG. A total of €9.1 million was granted and owed to such former Board of Management members and their surviving dependents in fiscal year 2021. Obligations for pensions for this group of persons measured in accordance with IAS 19 amounted to €119.9 million.

 

 

KARLHEINZ BLESSING

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

181,512.60

 

26.8

Base salary

 

 

Fringe benefits

 

5,667.50

 

0.8

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

490,068.28

 

72.4

Severance payments

 

 

Total remuneration granted and owed

 

677,248.38

 

100.0

 

 

FRANCISCO JAVIER GARCIA SANZ

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

712,068.00

 

57.6

Base salary

 

 

Fringe benefits

 

34,128.00

 

2.8

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

490,068.28

 

39.6

Severance payments

 

 

Total remuneration granted and owed

 

1,236,264.28

 

100.0

 

 

JOCHEM HEIZMANN

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

739,200.00

 

59.2

Base salary

 

 

Fringe benefits

 

18,489.00

 

1.5

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

490,068.28

 

39.3

Severance payments

 

 

Total remuneration granted and owed

 

1,247,757.28

 

100.0

 

 

CHRISTINE HOHMANN-DENNHARDT

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

107,130.12

 

75.6

Base salary

 

 

Fringe benefits

 

34,521.14

 

24.4

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

 

Severance payments

 

 

Total remuneration granted and owed

 

141,651.26

 

100.0

 

 

MICHAEL MACHT

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

739,200.00

 

95.7

Base salary

 

 

Fringe benefits

 

33,181.98

 

4.3

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

 

Severance payments

 

 

Total remuneration granted and owed

 

772,381.98

 

100.0

 

 

MATTHIAS MÜLLER

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

1,108,800.00

 

78.5

Base salary

 

 

Fringe benefits

 

25,873.18

 

1.8

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

277,297.32

 

19.6

Severance payments

 

 

Total remuneration granted and owed

 

1,411,970.50

 

100.0

 

 

HORST NEUMANN

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

660,058.20

 

95.1

Base salary

 

 

Fringe benefits

 

33,660.00

 

4.9

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

 

Severance payments

 

 

Total remuneration granted and owed

 

693,718.20

 

100.0

 

 

LEIF ÖSTLING

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

243,848.76

 

100.0

Base salary

 

 

Fringe benefits

 

 

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

 

Severance payments

 

 

Total remuneration granted and owed

 

243,848.76

 

100.0

 

 

HANS DIETER PÖTSCH

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

814,800.00

 

96.8

Base salary

 

 

Fringe benefits

 

26,719.14

 

3.2

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

 

Severance payments

 

 

Total remuneration granted and owed

 

841,519.14

 

100.0

 

 

ANDREAS RENSCHLER

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

 

Base salary

 

 

Fringe benefits

 

73,765.00

 

1.3

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

490,068.28

 

8.8

Severance payments

 

5,036,253.00

 

89.9

Total remuneration granted and owed

 

5,600,086.28

 

100.0

 

 

RUPERT STADLER

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

 

Base salary

 

 

Fringe benefits

 

4,354.68

 

0.9

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)1

 

468,508.74

 

99.1

Severance payments2

 

 

Total remuneration granted and owed

 

472,863.42

 

100.0

1

In the context of the diesel liability settlement, which was approved by the Annual General Meeting on July 22, 2021, Mr. Stadler has waived a further €420,000 gross of his LTI for fiscal
year 2018 as his personal contribution.

2

In the context of the diesel liability settlement, which was approved by the Annual General Meeting on July 22, 2021, Mr. Stadler has waived his conditional claim to a severance payment of €5,112,500 gross from Volkswagen AG and AUDI AG. Moreover, Mr. Stadler has waived possible additional claims to severance payments from AUDI AG. In the context of the liability settlement, €3.6 million of the waived severance payment from Volkswagen AG and AUDI AG and €80,000 of the waived additional severance claims against AUDI AG were considered as Mr. Stadler’s personal contribution.

 

 

MARTIN WINTERKORN

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

1,180,800.00

 

97.6

Base salary

 

 

Fringe benefits

 

28,572.00

 

2.4

One-year variable remuneration/annual bonus

 

 

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)1

 

 

Severance payments2

 

 

Total remuneration granted and owed

 

1,209,372.00

 

100.0

1

In the context of the diesel liability settlement, which was approved by the Annual General Meeting on July 22, 2021, Mr. Winterkorn has waived €1.335 million gross of his special benefits for fiscal year 2016, which were deferred to June 30, 2021 on the basis of a contractual agreement, as his personal contribution.

2

In the context of the diesel liability settlement, which was approved by the Annual General Meeting on July 22, 2021, Mr. Winterkorn has waived €2.655 million gross of his LTI for fiscal year 2016, which was deferred to June 30, 2021 on the basis of a contractual agreement, as his personal contribution.

 

 

FRANK WITTER1

 

 

2021

 

 

 

%

 

 

 

 

 

Pension payments

 

216,385.92

 

13.7

Base salary

 

355,000.00

 

22.5

Fringe benefits

 

54,570.20

 

3.5

One-year variable remuneration/annual bonus

 

586,845.00

 

37.1

Multiyear variable remuneration/long-term incentive
(LTI, performance share plan 2018 – 2020)

 

367,551.21

 

23.3

Severance payments

 

 

Total remuneration granted and owed

 

1,580,352.33

 

100.0

Pension expenses

 

271,099.00

 

Total remuneration incl. pension expenses

 

1,851,451.33

 

1

Mr. Witter was an active Board of Management member until March 31, 2021. The table shows his remuneration in fiscal year 2021 after his departure from the Board of Management.

V. Comparative presentation

The following table shows a comparison of the year-on-year percentage change in the remuneration of current and former Board of Management members with the earnings performance of Volkswagen AG and with the average remuneration of employees on a full time equivalent basis. For members of the Board of Management, the remuneration granted and owed in in the reporting year, is placed in relation to the equivalent figure for the previous year.

Earnings performance is shown on the basis of Volkswagen AG’s net income or loss for the year. However, the remuneration of the Board of Management members is based on Group KPIs. In order to demonstrate more transparently how the remuneration of the Board of Management members has changed compared with earnings performance, the earnings after tax, operating result and operating return on sales of the Volkswagen Group, as reported in the consolidated financial statements, are also used in determining earnings performance. This means that Group KPIs are not only applied in calculating the remuneration of the Board of Management members but also in determining earnings performance. The Group KPIs used in determining earnings performance show the overall effect of the business activities for which the Board of Management is responsible.

The comparison with the growth in average employee remuneration is based on the personnel expenses of Volkswagen AG reported in the notes to the annual financial statements of Volkswagen AG, adjusted for the remuneration of the members of the Board of Management. These adjusted personnel expenses are divided by the number of full time equivalent employees of Volkswagen AG as of December 31, 2021, excluding the members of the Board of Management.

VI. Peer group

The Supervisory Board regularly reviews and, if necessary, adjusts the level of the remuneration, the total remuneration cap and the individual targets. Among other things, the Supervisory Board performs a vertical comparison with the remuneration and employment terms of the Company’s employees and a horizontal comparison with the remuneration and employment terms of other companies’ management board members. The Supervisory Board conducts a peer group comparison to assess whether the specific total remuneration paid to the members of the Board of Management is customary when measured against that paid in other companies. This peer group is regularly reviewed and adjusted, most recently in February and December 2020. The peer group currently comprises the following companies: BMW, Daimler, Ford, General Motors, Stellantis, Nissan Motor Corporation, Toyota, BYD, Tesla (excluding CEO), hp, IBM, Uber, SAP, Samsung, General Electric, Siemens, Hitachi and Boeing.

Annual change in %

 

2021 compared with 20201

 

 

 

Board of Management remuneration2

 

 

Herbert Diess

 

+40.1%

Murat Aksel

 

Arno Antlitz

 

Oliver Blume

 

+74.8%

Markus Duesmann

 

–56.6%

Gunnar Kilian

 

+128.3%

Thomas Schmall-von Westerholt

 

Hiltrud Dorothea Werner

 

+6.6%

Frank Witter3

 

–34.5%

Karlheinz Blessing

 

–83.0%

Francisco Javier Garcia Sanz

 

–43.8%

Jochem Heizmann

 

–50.7%

Christine Hohmann-Dennhardt

 

+2.7%

Michael Macht

 

+0.6%

Matthias Müller

 

–71.4%

Horst Neumann

 

+0.1%

Leif Östling

 

+1.0%

Hans Dieter Pötsch

 

–1.5%

Andreas Renschler

 

–0.2%

Rupert Stadler

 

–73.7%

Martin Winterkorn

 

+0.2%

 

 

 

Earnings performance

 

 

Net income or loss for the year of Volkswagen AG

 

–36.2%

Earnings after tax of the Volkswagen Group

 

+74.8%

Operating result of the Volkswagen Group

 

+99.2%

Operating return on sales of the Volkswagen Group

 

+79.1%

Employees

 

 

Volkswagen AG employees

 

+9.2%

1

Under the transitional provision of section 26j(2) sentence 2 of the Einführungsgesetz zum Aktiengesetz (EGAktG – Introductory Act to the German Stock Corporation Act), the comparative presentation is to be based on the average remuneration in the period since fiscal year 2020 only, rather than the average remuneration for the last five fiscal years; this provision applies until the end of fiscal year 2025.

2

Remuneration “granted and owed” within the meaning of section 162(1) sentence 1 of the AktG.

3

Remuneration “granted and owed” for full fiscal year 2021 as an active Board of Management member and after his departure from the Board of Management.

Rating
Systematic assessment of companies in terms of their credit quality. Ratings are expressed by means of rating classes, which are defined differently by the individual rating agencies.