VW Says Works Council Payments Legal

Volkswagen says it obeyed the law in the payment of its works council chief, Bernd Osterloh, whose office was raided on Tuesday along with those of its chairman, finance chief and head of personnel.

The raid by prosecutors and tax officers on VW’s Frankfurt offices was related to suspicions of overpayments and related tax evasion.

That is because over-remuneration could result in overly high operating expenses and the payment of too little tax. Files and computers were seized, Reuters reported.

Both Volkswagen and the works council said on Wednesday they were confident that Osterloh’s remuneration would be found to be compliant with the law.

The works council added that Osterloh himself was not the target of the investigation.

It was revealed earlier this year that German prosecutors were investigating current and former executives at Volkswagen on suspicion that they paid works council chief Bernd Osterloh an excessive salary.

Osterloh told a newspaper at the time that his basic pay was around 200,000 euro ($237,000), and that bonuses had lifted it to a peak of 750,000 in one year. In Germany, wasting corporate funds is legally a breach of fiduciary duty.