More on Porsche/VW talks, CEO gets 109m comp last year
Jul 21, 2009 | 09:07 AM
#1
Thread Starter
| TEAMSPEED.COM
Joined: Nov 2007
Posts: 583
More on Porsche/VW talks, CEO gets 109m comp last year July 20 (Bloomberg) -- Porsche SE Chief Executive Officer Wendelin Wiedeking may receive a share of the sports-car maker’s profit for three years in the event Germany’s best paid manager has to step down following a power struggle with Volkswagen AG.
Wiedeking, whose contract ends in 2012, could insist on being paid for the full period, said Gregor Thuesing, a labor law professor at the University of Bonn. Wiedeking earned about 77 million euros ($109 million) last year based on a provision in his contract that entitles him to 0.9 percent of the automaker’s pretax profit.
“The question is: For how much is an executive ready to step down even though he still feels ‘happy as a cat’ in his job,” Thuesing said. “It certainly won’t be cheap.”
Wiedeking is preparing for his departure as the family that controls the automaker is set to reach a deal that will let Volkswagen take a 49 percent stake in Porsche, Der Spiegel reported last week. Stuttgart, Germany-based Porsche is in talks to be taken over by VW, part of a transaction that includes an investment by Qatar, after Porsche’s failed effort to acquire VW left it with more than 9 billion euros in debt, people familiar with the situation have said.
Porsche spokesman Albrecht Bamler didn’t immediately return calls to his office seeking comment. Any severance payment would be subject to negotiations, which are likely to lead to a one- time package for the executive, Thuesing said.
Best-Paid Manager
Based on last year’s compensation, Wiedeking earned more than any leader of the 30 companies in Germany’s benchmark DAX Index, which includes Wolfsburg, Germany-based VW. Porsche isn’t on the index.
Wiedeking could insist on the fulfillment of his contact unless Porsche had a reason to terminate it with immediate effect, which is only the case in exceptional circumstances, said Thuesing. German corporate governance rules aim at limiting severance packages for former executives to two yearly salaries, he said.
Porsche reported a pretax profit of 8.57 billion euros for the year through July 2008. Earnings for the year ending this month may reach 3.51 billion euros, according to 16 analysts’ median estimate compiled by Bloomberg.
Wiedeking transformed the 911 sports-car manufacturer, almost bankrupt when he became CEO in 1993, into the automaker with the highest profit margins for the industry. In 2005, he began using cash from the luxury-vehicle business to acquire shares of Volkswagen, a company that builds more cars in a week than Porsche does in a year.
The strategy worked until Wiedeking’s efforts to topple power structures at VW, Europe’s largest carmaker, failed and the economic crisis thinned profits and spooked banks.
‘Happy as a Cat’
Der Spiegel and WirtschaftsWoche were among German media that reported last week that Wiedeking would step down. Porsche repeatedly denied the reports.
On July 17, Porsche said that supervisory board Chairman Wolfgang Porsche “strongly rejects” a report by Spiegel Online that Michael Macht
“I’m the chief executive officer,” Wiedeking said July 16 in Ingolstadt, Germany, where he was attending the 100th anniversary celebration for VW’s Audi division. “I bear responsibility for this company and I’m feeling happy as a cat in that role.”
Alienation
The CEO failed to win support from VW union chief Bernd Osterloh, who asked to quit negotiations with Porsche about a combination of the carmakers only two weeks after a May 6 agreement among Porsche’s controlling families.
Wiedeking also alienated Christian Wulff, the premier of VW’s home state of Lower Saxony, by trying to scuttle Germany’s so-called Volkswagen Law, which gives the state a blocking minority.
The supervisory boards of Porsche and Volkswagen are scheduled to meet July 23 to discuss the merger plan.
Qatar and Porsche’s family owners have been asked to participate in a planned 5 billion-euro share sale at Porsche, people familiar with the talks said last week. Qatar may pay 2 billion euros for a stake, one of the people said.
At the same time, Porsche may hand over the options that can be converted into a 20 percent stake in VW to Qatar for free or a nominal amount, the people have said. Qatar would then pay about 5 billion euros to banks that sold Porsche the derivatives, they said.
Volkswagen may pay 4 billion euros for a 49 percent stake in Porsche’s operating company, according to the people. VW may then fully take over Porsche AG, they have said. Volkswagen may acquire the remaining stake within two years in a deal that would value the entire company at about 8 billion euros, according to one of the people, will be named to run Porsche’s car-making operations. Porsche isn’t aware of any decision by its controlling family members on the future of its leadership, and Wiedeking is still in office, the company said at the time.
Wiedeking, whose contract ends in 2012, could insist on being paid for the full period, said Gregor Thuesing, a labor law professor at the University of Bonn. Wiedeking earned about 77 million euros ($109 million) last year based on a provision in his contract that entitles him to 0.9 percent of the automaker’s pretax profit.
“The question is: For how much is an executive ready to step down even though he still feels ‘happy as a cat’ in his job,” Thuesing said. “It certainly won’t be cheap.”
Wiedeking is preparing for his departure as the family that controls the automaker is set to reach a deal that will let Volkswagen take a 49 percent stake in Porsche, Der Spiegel reported last week. Stuttgart, Germany-based Porsche is in talks to be taken over by VW, part of a transaction that includes an investment by Qatar, after Porsche’s failed effort to acquire VW left it with more than 9 billion euros in debt, people familiar with the situation have said.
Porsche spokesman Albrecht Bamler didn’t immediately return calls to his office seeking comment. Any severance payment would be subject to negotiations, which are likely to lead to a one- time package for the executive, Thuesing said.
Best-Paid Manager
Based on last year’s compensation, Wiedeking earned more than any leader of the 30 companies in Germany’s benchmark DAX Index, which includes Wolfsburg, Germany-based VW. Porsche isn’t on the index.
Wiedeking could insist on the fulfillment of his contact unless Porsche had a reason to terminate it with immediate effect, which is only the case in exceptional circumstances, said Thuesing. German corporate governance rules aim at limiting severance packages for former executives to two yearly salaries, he said.
Porsche reported a pretax profit of 8.57 billion euros for the year through July 2008. Earnings for the year ending this month may reach 3.51 billion euros, according to 16 analysts’ median estimate compiled by Bloomberg.
Wiedeking transformed the 911 sports-car manufacturer, almost bankrupt when he became CEO in 1993, into the automaker with the highest profit margins for the industry. In 2005, he began using cash from the luxury-vehicle business to acquire shares of Volkswagen, a company that builds more cars in a week than Porsche does in a year.
The strategy worked until Wiedeking’s efforts to topple power structures at VW, Europe’s largest carmaker, failed and the economic crisis thinned profits and spooked banks.
‘Happy as a Cat’
Der Spiegel and WirtschaftsWoche were among German media that reported last week that Wiedeking would step down. Porsche repeatedly denied the reports.
On July 17, Porsche said that supervisory board Chairman Wolfgang Porsche “strongly rejects” a report by Spiegel Online that Michael Macht
“I’m the chief executive officer,” Wiedeking said July 16 in Ingolstadt, Germany, where he was attending the 100th anniversary celebration for VW’s Audi division. “I bear responsibility for this company and I’m feeling happy as a cat in that role.”
Alienation
The CEO failed to win support from VW union chief Bernd Osterloh, who asked to quit negotiations with Porsche about a combination of the carmakers only two weeks after a May 6 agreement among Porsche’s controlling families.
Wiedeking also alienated Christian Wulff, the premier of VW’s home state of Lower Saxony, by trying to scuttle Germany’s so-called Volkswagen Law, which gives the state a blocking minority.
The supervisory boards of Porsche and Volkswagen are scheduled to meet July 23 to discuss the merger plan.
Qatar and Porsche’s family owners have been asked to participate in a planned 5 billion-euro share sale at Porsche, people familiar with the talks said last week. Qatar may pay 2 billion euros for a stake, one of the people said.
At the same time, Porsche may hand over the options that can be converted into a 20 percent stake in VW to Qatar for free or a nominal amount, the people have said. Qatar would then pay about 5 billion euros to banks that sold Porsche the derivatives, they said.
Volkswagen may pay 4 billion euros for a 49 percent stake in Porsche’s operating company, according to the people. VW may then fully take over Porsche AG, they have said. Volkswagen may acquire the remaining stake within two years in a deal that would value the entire company at about 8 billion euros, according to one of the people, will be named to run Porsche’s car-making operations. Porsche isn’t aware of any decision by its controlling family members on the future of its leadership, and Wiedeking is still in office, the company said at the time.
Thread
Thread Starter
Forum
Replies
Last Post
DJ
Porsches from the Past | General Porsche News
15
Nov 2, 2012 11:17 AM
Beefmeister
991 | 997 | 996
3
Oct 6, 2011 10:07 PM
fat cab
Porsches from the Past | General Porsche News
12
Jan 19, 2011 01:20 PM
DJ
Porsches from the Past | General Porsche News
23
Sep 22, 2009 10:00 PM
Zamochit
Gadgets & Electronics | Home Theater | Gaming
6
Feb 23, 2009 04:52 PM
Bookmarks
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)