GERMANY: Salaries linked to satisfaction at VW
Volkswagen is linking the salaries of its top managers to customer and employee satisfaction, its head of labour relations has said.
Sales numbers and profitability are also key elements of the new long-term bonus programme, which will take effect in 2010, Horst Neumann told Reuters.
"Unlike many other companies we no longer link management pay to the share price development. Stock options are no longer part of executive remuneration," he said. Achievements over the preceding four years will be evaluated before the new bonus gets paid out.
"A precondition for bonus payments is that the group is in the black. Without profit there will be no bonus," he added.
Germany has refrained from introducing a similar rule so far but has passed a law requiring executive salaries to be connected to the long-term development of the company.