Ousted Volkswagen CEO Might Still Get $67M Payday

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I wonder if the company car this guy gets with his $67 million severance package will be one of those "clean" diesels. :rolleyes:

Martin Winterkorn, who stepped down from his gig atop the German automaker yesterday, already had about $33 million in his VW pension at the end of 2014. And according to the company’s annual report, there’s a severance payout rule that pays up to two years worth of their total annual remuneration.
 
Gotta love it, there's a payout RULE that doubles his already ginormous severance.
 
Of course he will, I had no doubt he would be financially protected. The employees who are fired for this will just be out of a job.
 
I'm slowly coming around to the idea that the 1% get too many entitlements. If he gets $30 million a year for active service to the company, fine, whatever, he is paid exactly what the market will bear for his position, BUT, to quit and get this shit...wtf.

Sure, you could argue the compensation is just since the market allowed him to negotiate that into his salary/severance, but come the fuck on, really?
 
These rules are negotiated prior to the person taking the job, as these are high-pay positions that usually involve high-risk, basically the person knows they are a wanted commodity so they negotiate their entry and exit strategies before taking the position. This guy was busy doing his CEO job and suddenly this scandal from the company he heads is making the news.

He did the right thing, he just threw himself on his sword. This is a symbolic gesture that is designed to help the public, well, forget the problem happened. "oh look he lost his job so......anyways....what were we talking about?". This way VW can move on without having a million reporters asking "SO WHO IS GOING TO GET FIRED OVER THIS?" endlessly...because that's how the public operates, at the level of the low-hanging fruit.

Smart guy...now their new CEO will take quiet closed-door meetings with US Regulators and make all these messy "misunderstandings" about their software go away. But these bonuses you guys are railing on are there to protect these guys. When you are the CEO of a corporation of hundreds of thousands of people, you aren't doing code reviews...
 
A contract is a contract ... just as I would expect that Comcast or AT&T honor their service contracts with me or that my employer honor my employment contract (including any legally mandated severance), it is not unreasonable for a CEO to expect the company to honor their contract

That said, companies need to start putting performance clauses in their CEO contracts (especially where the risk is high) so that they can honor the contracts and not be obligated for these giant golden parachutes ... ultimately there are enough qualified executives out there that they should be able to get a decent to exceptional candidate with a decent payscale and reasonable performance rewards ... the golden parachutes usually favor people they shouldn't really be hiring anyway
 
A contract is a contract just as a fine is a fine. No wiggle for one and no wiggle for the other. They willfully violated the law and admitted it, so he gets his $67 million and the US gets its $18 billion. Works for me.
 
They should give him those cars to drive with a special brake feature if you know what i mean.
 
How can I land a job where I get a punishment like this? Updating my resume right now.
 
This is obscene.
There is no other description.
Any other argument, is absolute bullshit.
How about not paying him any money, and suing him for breach of contract?
I mean, the money could be tied up for years, with lawyers already paid for... ahh sure that is only done to us 'rats' that choke on their 'clean' diesels.
Suuure.. how would they do it to one of their own gods in Olympus?.
 
"A contract is a contract" is fine, but the fact that these contracts exist at all is source of outrage. "Because the risk is high" is horseshit, you're telling me that getting paid over 1000x the median wage in America isn't compensation enough? Ok then.
 
$33 million is enough for me say, "I don't recall.", when asked by U.S. regulators how the software based "emissions-cheater" came about.
 
I'm gonna start applying for CEO positions, work for a month, fuck up ..... profit.
 
BuBBa said:
"A contract is a contract" is fine, but the fact that these contracts exist at all is source of outrage. "Because the risk is high" is horseshit, you're telling me that getting paid over 1000x the median wage in America isn't compensation enough? Ok then.
Click to expand...

CEO's get paid what they do the same reason Entertainers and Sports Figures get paid what they do, the talent pool is very small when you are working at that scale, corporations don't hire someone off the street and "let's see how this goes".....there is too much at stake. So yes, absolutely, you pay someone $50 million to run Volkswagon because you believe in their vision, or their proven track record......because if you don't, that guy will go work for Chevy for $55 and you'll be left choosing between the also-rans.

CEO's are not judged by the performance of the individual cogs in the machine, they are judged by their ability to guide the company as a whole. Its pretty unlikely a guy like this knew about a software switcharoo. If he did, criminal proceedings are in his future I'm guessing, VW will sue him if that is the case for sure, to recoup those bonus payouts as I'm sure that violates some of the contract clauses.
 
BuBBa said:
"A contract is a contract" is fine, but the fact that these contracts exist at all is source of outrage. "Because the risk is high" is horseshit, you're telling me that getting paid over 1000x the median wage in America isn't compensation enough? Ok then.
Click to expand...

Think about it this way, he was just fired because something happens that he didn't know about (at least that's what we know right now). So someone below him did wrong doing and he got fired for it because he is captain of the ship and that's how it works. That is why he is getting paid per contract.

Now, if he did know about it or had anything to do with it and got paid that is shit, but that is also the boards decision. Period. If the board wants to waste money like that they can.
 
FM 3370 said:
I'm gonna start applying for CEO positions, work for a month, fuck up ..... profit.
Click to expand...

As others have stated, there is a reason that the small cadre of CEO candidates get these jobs and such high pay ... there is a very small supply of qualified candidates ... except where someone started their own company there are very few first time executives getting these contracts ... most of these folks are ambitious executives who worked their way up through the ranks at other companies and became a CxO or very high level VP or President of said companies ... once they get into that club they can try for these jobs

Think of it more like sports ... most head coaches have worked as head coaches for other teams or assistant coaches for many years (with some recent high profile successes) ... very few players move from player to head coach instantly and extremely few total outsiders who were neither coach or player get those types of jobs ... a CEO generally works the same ... the candidates are CEOs of other companies looking for a change, or COOs/CFOs etc who aren't high in the succession of their own companies for a CEO spot
 
Romale23 said:
Think about it this way, he was just fired because something happens that he didn't know about (at least that's what we know right now). So someone below him did wrong doing and he got fired for it because he is captain of the ship and that's how it works. That is why he is getting paid per contract.

Now, if he did know about it or had anything to do with it and got paid that is shit, but that is also the boards decision. Period. If the board wants to waste money like that they can.
Click to expand...

Yup, and now at this point he is probably done with his career. Because as the fall guy who will pick him up?

I just read that they might be getting the Porsche ceo as his replacement.
 
Incredible that the enviromentalists forced VW to cheat on emission tests or sell slow cars with terrible gas mileage. And then they went after VW for something that they clearly gave them no option in.

These people should all be banned from owning any gas car / buying non-100% renewable electricity for the rest of their lives. If they hate fossil fuel so much, they can buy some solar panels and an electric car.
 
rabidz7 said:
Incredible that the enviromentalists forced VW to cheat on emission tests or sell slow cars with terrible gas mileage. And then they went after VW for something that they clearly gave them no option in.

These people should all be banned from owning any gas car / buying non-100% renewable electricity for the rest of their lives. If they hate fossil fuel so much, they can buy some solar panels and an electric car.
Click to expand...

lolwut
 
No way he was unaware of a scheme this complex and far reaching. The things big corporations get away with makes me think that the vision of a world run and controlled by big business shown in many movies isn't that far off. If there was any real justice left,the man would be in jail,and VW would be fined out of existence.
 
rabidz7 said:
Incredible that the enviromentalists forced VW to cheat on emission tests or sell slow cars with terrible gas mileage. And then they went after VW for something that they clearly gave them no option in.

These people should all be banned from owning any gas car / buying non-100% renewable electricity for the rest of their lives. If they hate fossil fuel so much, they can buy some solar panels and an electric car.
Click to expand...

And I wish that we didn't have to live under the laws passed by the politicians we vote against.

The liberals could pay the high taxes and live under all the crazy laws they pass, while conservatives would have lower taxes and less government mandates. I think we would see people voting a lot different if they couldn't impose on others.
 
michael.pa2 said:
No way he was unaware of a scheme this complex and far reaching. The things big corporations get away with makes me think that the vision of a world run and controlled by big business shown in many movies isn't that far off. If there was any real justice left,the man would be in jail,and VW would be fined out of existence.
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It is still early ... even corporations are allowed due process of law and just as any complex criminal trial takes a long time to prepare, corporate trials are no different ... I am sure there are multiple investigations underway on this from multiple government agencies ... if there is proof of wrongdoing I would suspect that trials and fines are forthcoming ;)
 
Romale23 said:
Think about it this way, he was just fired because something happens that he didn't know about (at least that's what we know right now). So someone below him did wrong doing and he got fired for it because he is captain of the ship and that's how it works. That is why he is getting paid per contract.

Now, if he did know about it or had anything to do with it and got paid that is shit, but that is also the boards decision. Period. If the board wants to waste money like that they can.
Click to expand...

Right, they generated 11M vehicles specifically designed to cheat emissions, and the CEO had no clue. I'm also selling some amazing bridges right now if you're interested, 100% structurally sound too!

maverikv said:
lolwut
Click to expand...

You can't even make some of these logical contortions up if you tried.
 
HeadRusch said:
CEO's are not judged by the performance of the individual cogs in the machine, they are judged by their ability to guide the company as a whole.
Click to expand...
Agreed, however the point still stands they are paid not by their idea of their ability, not necessarily their ability, they could run the company into the ground and still live like a king, proof by VW dropping to 2/3rds it's previous value literally over night.
 
kbrickley said:
As others have stated, there is a reason that the small cadre of CEO candidates get these jobs and such high pay ... there is a very small supply of qualified candidates ... except where someone started their own company there are very few first time executives getting these contracts ... most of these folks are ambitious executives who worked their way up through the ranks at other companies and became a CxO or very high level VP or President of said companies ... once they get into that club they can try for these jobs

Think of it more like sports ... most head coaches have worked as head coaches for other teams or assistant coaches for many years (with some recent high profile successes) ... very few players move from player to head coach instantly and extremely few total outsiders who were neither coach or player get those types of jobs ... a CEO generally works the same ... the candidates are CEOs of other companies looking for a change, or COOs/CFOs etc who aren't high in the succession of their own companies for a CEO spot
Click to expand...

Thanks for the explanation. I've never really read the story of how anyone has become CEO. I'm sure it appears to a lot of people that these people have attained these positions with ease. I should probably get a book and read about a CEO for more understanding.
 
michael.pa2 said:
No way he was unaware of a scheme this complex and far reaching. The things big corporations get away with makes me think that the vision of a world run and controlled by big business shown in many movies isn't that far off. If there was any real justice left,the man would be in jail,and VW would be fined out of existence.
Click to expand...

Having worked both in government and corporate america, i can utterly believe that he didn't know. Think about something you hire someone to do, if you do. Lets say a car mechanic. Do you know exactly what they did to fix your car? No, you get a piece of paper that says x y and z was done. Do you think his boss watched him do the repair and saw what was done? Answer is most likely no.

As far as him being in jail, even if he did know about it and deliberately do it your going to have to extradite him from Germany etc. etc. it might happen but i doubt it.

Also a thing of note VW is sitting on 30 billion in cash. The maximum fine the EPA can levy for this is 18 billion. they won't even be close to going out of business even if they took back all the cars in the US and refunded at full price.
 
That's the fine alone, however. That says nothing about consumer lawsuits, replacing the 11M cars that are out there, loss of consumer and dealer goodwill, etc.
 
TwistedAegis said:
Right, they generated 11M vehicles specifically designed to cheat emissions, and the CEO had no clue. I'm also selling some amazing bridges right now if you're interested, 100% structurally sound too!



You can't even make some of these logical contortions up if you tried.
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Absolutely. Your talking about a piece of software that was probably put in every one of their cars. Think about the SSL bug, its the same type of shit only it was deliberately done by someone. I doubt the CEO guy who got fired even knows how an ECU works much less what was done to it to beat emissions standards. Some guy was told to meet standard X, he cheated and did it. Probably got a promotion for doing it in software with very little cost. Why would someone know how it was done? Is the President responsible for the OPM leaks? That was negligence that allowed those leaks. Do you think he knew it was happening?
 
HeadRusch said:
These rules are negotiated prior to the person taking the job, as these are high-pay positions that usually involve high-risk, basically the person knows they are a wanted commodity so they negotiate their entry and exit strategies before taking the position.
Click to expand...
Oh please elaborate on this. I want to know what all this "risk" is from. If he does a good job, he gets millions in pay / stock options. If he screws up, he gets millions from a golden parachute. That sounds like the complete and total opposite of "high risk" to me. Meanwhile somebody at the bottom who survives paycheck to paycheck and is out on the street if something goes wrong isn't risking anything apparently...
 
There is no way that only one software engineer knew about this issue; that is a software, hardware and engineering total package to mask this deception. You think one rogue department decided to simply build an entire model line based on this? That's "business risk" decision that gets kicked all the way up to the top.

The OPM breach is a shitty software package that's put in place, it's apples and oranges.
 
tetris42 said:
Oh please elaborate on this. I want to know what all this "risk" is from. If he does a good job, he gets millions in pay / stock options. If he screws up, he gets millions from a golden parachute. That sounds like the complete and total opposite of "high risk" to me. Meanwhile somebody at the bottom who survives paycheck to paycheck and is out on the street if something goes wrong isn't risking anything apparently...
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Very well said.
 
sfsuphysics said:
Agreed, however the point still stands they are paid not by their idea of their ability, not necessarily their ability, they could run the company into the ground and still live like a king, proof by VW dropping to 2/3rds it's previous value literally over night.
Click to expand...

The issue is perhaps not the CEOs themselves but the Boards that hire them and grant the contracts ... the conflict with the modern Board of Directors is they are usually executives for other companies ... as such they have a vested interest in high CEO pay and benefits since they will be in a better market position when their own CEO or executive contract comes up for renewal

The best long term solution is one of two things ... change the composition of the boards so they cannot be business insiders (like CEOs of other companies), you could also limit the number of boards an executive can serve on (since some are on multiple boards with multiple companies) ... the other solution would be to take compensation out of the hands of the boards and give it to the Shareholders, the Shareholders could approve a standard contract they wish to use and modify it as the market demands, this would put the compensation in the hands of the people who will directly benefit or suffer from the effects of a bad contract
 
kbrickley said:
The issue is perhaps not the CEOs themselves but the Boards that hire them and grant the contracts ... the conflict with the modern Board of Directors is they are usually executives for other companies ... as such they have a vested interest in high CEO pay and benefits since they will be in a better market position when their own CEO or executive contract comes up for renewal

The best long term solution is one of two things ... change the composition of the boards so they cannot be business insiders (like CEOs of other companies), you could also limit the number of boards an executive can serve on (since some are on multiple boards with multiple companies) ... the other solution would be to take compensation out of the hands of the boards and give it to the Shareholders, the Shareholders could approve a standard contract they wish to use and modify it as the market demands, this would put the compensation in the hands of the people who will directly benefit or suffer from the effects of a bad contract
Click to expand...
That would all kill jobs, so, can't do that.
 
OEM said:
That would all kill jobs, so, can't do that.
Click to expand...

Dang it ... sorry, I forgot ... it would be horrible with all those 1%'er standing on street corners with their signs, "Will work for Food and $300,000,000 stock option package" ... I am properly chastised and won't rock the boat again with these ludicrous suggestions :D
 
TwistedAegis said:
There is no way that only one software engineer knew about this issue; that is a software, hardware and engineering total package to mask this deception. You think one rogue department decided to simply build an entire model line based on this? That's "business risk" decision that gets kicked all the way up to the top.

The OPM breach is a shitty software package that's put in place, it's apples and oranges.
Click to expand...

I didn't say it did take one software engineer. But it only takes one leader, hell one project manager could of done this easy in a US company. I can only imagine it's the same in Germany. In the end we may or may not find out what happen. But jumping to conclusions on this is a bit premature.

As far as OPM it is an apples to oranges comparison of fault, but not of knowledge transfer. Again, why would the CEO of a company know how a project was completed. I've only ever seen an CEO go through a project in that detail when a project fails. Could he of known? Yes. Could he of orchestrated the whole thing? absolutely. But i don't think its more than 50/50 odds and saying he should be in jail at this point is a bit much. Your basically saying he is a liar because in a perfect world he would know about it.
 
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