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Business

VW managers debate bonuses after diesel scandal

Volkswagen is considering whether to pay top managers millions of euros in bonuses as the company reels from its diesel emissions scandal. CEO Matthias Müller has suggested a 30 percent cut, according to a media report.

Müller is expected to present his proposal for a voluntary one-third cut in bonus payments at a supervisory board steering committee meeting on Monday, according to sources cited by the German tabloid "Bild am Sonntag."

The proposal comes after one of the automaker's major shareholders, the German state of Lower Saxony, recently criticized the company's plans to shell out bonuses to top executives at a time when the firm is looking to slash costs in the wake of the diesel emissions crisis.

Lower Saxony holds a 20 percent stake in VW and two seats on the 20-member supervisory board, the body which makes decisions on executive pay.

Bonuses for senior managers have become a flashpoint in an escalating dispute with powerful labor leaders at Europe's biggest carmaker as it prepares to finalize a new strategy.

Fears over job losses

CEO Müller had told the company that there would have to be savings measures "from management down to the workers" as the massive emissions-cheating scandal would entail incalculable litigation and compensation costs worldwide, with 11 million cars affected by the scam.

Trade union officials in Germany are increasingly worried that the belt-tightening at VW could eventually lead to massive layoffs across the company's production facilities.

On Friday, sources familiar with the matter told Reuters that the steering committee would use Monday's meeting to discuss the emissions scandal investigation and VW's financial position ahead of its annual report, due to be published on April 28, as well as bonuses and friction between management and labor.

Monday's meeting is expected to lay the groundwork for a full meeting of the supervisory board, originally planned for April 20, which is due to ratify 2015 results and executive compensation.

sri/cjc (Reuters, AFP)

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