What salaries do they get in Volkswagen

[[MC]Ronin[MC]]

What salaries do they get in Volkswagen

 

For better paid executives, the monthly increase can be a four-figure sum

The new year will bring more money for managers in Volkswagen.

As the company explains, the monthly basic salaries of about 18,000 executives worldwide will be increased by four and six percent in a one-off special campaign starting January 1st.

For better paid executives, the monthly increase could be a four-figure sum, writes German Handelsblatt.

A further increase is likely to be added over the coming year, as the forthcoming increase in the basic salaries of VW employees is traditionally transferred to management.

The special increase in the monthly fixed salaries is part of a complete reorganization of the remuneration structure for VW executives, the group explained.

In Volkswagen, managers at the level below the members of the Board of Directors are divided into three classes. The lower level includes the so-called Management Circle (MK), which includes about 12,000 executives worldwide.

The majority of MK's staff is employed by the major Volkswagen brand, and a smaller part by other subsidiaries.

 

 
Above this basic level, there are about 6,000 other managers who belong to the VW Group's "Upper Management Group" (OMK). With more responsibility and higher salaries, they are above the management colleagues at MK.
 
Above them are TMK employees, Volkswagen's top management. With about 350 people, this circle is much smaller and more upmarket. As a rule, the company also recruits new members to the board of directors of this group.

MK and OMK employees can expect a further increase in the monthly fixed salary from January 1, 2020.

For MK employees there will be a four percent increase, for OMK managers it will be six percent. For the elite managers of the TMK group, the company has long decided to add eight percent.
 
Volkswagen pays an entry-level manager of MK in Germany a monthly fixed sum of over € 8,500. With a four percent increase, it will reach just under 8,900 euros in the new year. According to company sources, a Volkswagen manager can earn around € 11,300 a month if it is at MK's highest level.
 
The entry level of OMK managers is almost € 9600 a month for Germany. If six percent is added in the future, the monthly fixed income is expected to rise to just under € 10,200.

At the highest OMK level according to the future calculation mode, the VW manager will receive around € 19,000 a month in the new year
 
For executives, this will hardly be the only expected salary increase in the new year. In 2020, Volkswagen will negotiate a new unified tariff for its German employees.

Traditionally, VW managers also receive this increase, which IG Metall actually only contracts for employees with collective agreements.

"This traditional step ensures that the pay gap between collective bargaining staff and managers remains the same," the company manager justified the process.
 
Last spring, a new in-house collective agreement was negotiated in Volkswagen. At that time, managers also received a corresponding increase in their regular fixed salaries.

At the time, this increase was 4.3 percent, first paid to VW executives in May 2018.

The Wolfsburg Group has officially confirmed the increase in the monthly fixed salary for 18,000 executives. However, a spokesman for the group mentioned the extensive change in the remuneration of all managers in the group, which will include not only a fixed salary but also flexible bonuses from the new year.
 
An example is the remuneration system that the group introduced for the Board of Directors three years ago. The flexible remuneration of 18,000 executives is expected to be more closely linked to the current development of the company.

In the future, the so-called annual bonus will be determined by operating return on sales and return on equity instead of operating profit.
 
The long-term bonus, the second component of VW's variable remuneration, will be related to earnings per share, stock price developments and dividends. The evaluation period is three years. With this new system, management is expected to be more focused on increasing the value of the company.
 
Management bonuses in Volkswagen are usually paid in the spring. With the group recovering substantially in the four years following the Dieselgate affair and in some cases even setting new records, VW managers can expect exceptionally generous payments next spring.

As a rule, OMK members receive six-digit bonuses if the years are good