Manager Salaries
July 29, 2008
Porsche chief Wiedeking could earn as much as 100 million euros ($157 million) this year for his contribution to the carmaker's success, a steep increase on the 60 million euros he earned last year.
In response, the opposition Left party once again said that the German government should cap top managers' salaries.
The grand coalition of Christian and Social Democrats is "incapable of putting an end to managers' brazen self-serving," Left party head Oskar Lafontaine told the Berliner Zeitung on Tuesday, July 29. "It's much too intertwined with the top managers.
"If the government is too hesitant, it should at least take the Left party's other suggestion and drastically raise taxes for incomes above 600,000 euros," Lafontaine added.
Porsche, however, was quick to point out that Wiedeking's estimated income was still mere speculation.
"Even Lafontaine knows that managers' salaries are fixed by the board of directors," a Porsche spokesman told Der Spiegel newsmagazine's online edition.
A case for the extra zeroes
The German mass-circulation tabloid Bild, however, argued in its Tuesday edition that Wiedeking has fairly earned every euro of his pay check.
When Wiedeking took charge of Porsche in 1992, the carmaker was nearly broke, wrote the paper, but the new CEO injected his private funds into the company to get it back on track. His management strategy worked and over the next decade and a half Porsche grew in value from 300 million to some 17 billion euros, making it the most profitable carmaker in the world.
As a result, the Porsche family reportedly rewarded Wiedeking with a 1 percent share in company profits.
The unusual accounting situation for this past fiscal year resulted from the revaluation of Porsche's 31-percent share in Volkswagen, according to reports.
The Stuttgart-based carmaker would earn more than 11 billion euros on turnover of just 8.6 billion euros for the financial year ending on July 31.
Porsche's attempt to acquire control of Volkswagen has been hindered by the state of Lower Saxony, where VW's headquarters are located. The state owns a 20.3-percent stake in the company but a special provision in a disputed German law allows it to block major decisions.