VW to award minimum €10m payoff to head of compliance
The former judge appointed by Volkswagen to improve the company’s compliance and culture in the wake of the diesel emissions scandal, will receive a payoff of more than €10m for just 13 months’ work as head of compliance and legal affairs. The severance pay for Christine Hohmann-Dennhardt, who left VW on Tuesday, is expected to be controversial with shareholders and campaigners. VW has already faced criticism for paying €63m to board members in 2015 during the emissions scandal. Hohmann-Dennhardt, who agreed a three-year contract with the carmaker, could be entitled to as much as €13m. 

The former judge brought in to shake up Volkswagen’s compliance and culture after it was struck by a diesel emissions scandal is to receive a payoff of more than €10m (£8.6m), despite working for the German carmaker for just 13 months.

Christine Hohmann-Dennhardt left VW on Tuesday after joining the board of the company on 1 January 2016 as head of compliance and legal affairs.

The payoff, which first emerged in the German media, will raise eyebrows among VW shareholders and campaigners. The German carmaker has already been heavily criticised over executive pay. It paid €63m to former and existing board members in 2015, despite being engulfed in scandal after it emerged that 11m of its cars were fitted with defeat devices to manipulate emissions data.

VW has agreed to pay billions to settle charges with the US authorities over the scandal. It has set said €18.2bn to meet the costs of fines and fixing the cars installed with defeat devices, but the company now expects to pay out more than this. A number of executives have also been charged about their roles in the scandal.

Hohmann-Dennhardt is thought to be entitled to as much €13m and will receive at least €10m. However, she defended the payment. The former judge told German daily Süddeutsche Zeitung: “The fact that a contract is fulfilled is a very normal process. I have nothing to hide.”

One of the reasons that the severance package is so significant is that VW had to buy Hohmann-Dennhardt out of a financial package with her former employee Daimler, the owner of Mercedes-Benz, in order to persuade her to join the carmaker.

Hohmann-Dennhardt agreed a three-year contract with VW but the company announced in a statement last week that she would leave by mutual agreement. VW said that the company and Hohmann-Dennhardt are “parting due to differences in their understanding of responsibilities and future operating structures within the function she leads”.

VW said Hohmann-Dennhardt improved the company’s approach to compliance and rolled out an internal campaign designed to promote a culture of integrity.

“Volkswagen will continue to press forward with changes to its way of thinking and working,” it said. “The group has substantially elevated its commitment to working ethically and with integrity and is decentralising its organisation.”

Hohmann-Dennhardt is being replaced by Hiltrud Werner, who was previously head of auditing.

News of her payout has emerged a day after sales figures for 2016 confirmed that VW is the world’s biggest car manufacturer.

Toyota had been the biggest seller for the past four years but its 2016 sales total of just under 10.2m vehicles, announced on Monday, fell short of the 10.3m cars sold by VW.

This is the first time that VW, which also owns Audi, Porsche and Škoda, has been the biggest carmaker in the world.

The company claimed the top spot on the back of a 12% rise in sales in China and despite demand slowing in Europe and the US, which was partly due to the diesel emissions scandal.