Porsche on Thursday dismissed chief executive Wendelin Wiedeking, as the debt-ridden German sports carmaker prepared for an increase of its capital base by at least €5bn ($7.1bn) ahead of a merger with rival Volkswagen.
In a controversial 15-hour boardroom showdown that stretched into Thursday morning, Porsche’s family owners agreed on an immediate dismissal of Mr Wiedeking and Holger Härter, chief financial officer.
Mr Wiedeking, once one of the highest paid managers in the world, agreed to a compensation package of €50m.
In fact, that package is not too surprising, given that Wiedeking was running one of Europe’s biggest hedge funds, albeit one with a luxury carmaker bolted on the side.
He earned almost €80m in the past financial year on the back of a contract that granted him a 0.9 per cent share of the company’s profits. Not that Porsche LLC likes to discuss remuneration, you understand. But then again which hedgie does?
From the 2007/08 annual report:
The individual remuneration of the members of the Executive Board at Porsche is not published. In our opinion, the associated disadvantages, particularly the inevitable upward leveling of the board members’ salaries and the invasion of the individuals’ right to privacy, outweigh the advantages to investors of such a practice.
Although the following could be found buried in the notes:
The remuneration of the Executive Board consists of a basic salary and a profit-based variable component. The remuneration of the Executive Board is due in the short term and amounted to EUR 143.5 million (prior year: EUR 112.7 million) for the fiscal year 2007/08. This figure includes profit-based components of EUR 139.5 million (prior year: EUR 107.3 million). This also contains the pro rata temporis remuneration of the four members of the Executive Board whose service agreements were transferred to Dr. Ing. h.c. F. Porsche Aktiengesellschaft on 13 November 2007.
Anyway, in true philanthropic hedge fund style, Wiedeking, who amazingly will act as an advisor to Porsche in the future, is giving half of his payoff to charity. Eat your heart out Chris Hohn!
Actually, this is probably a pretty wise move given the outcry this payment is bound to cause in Germany. As a reward for almost bringing a company to its knees, this takes some beating.
Update:
Some more from the 2007/08 annual report.
Porsche has a clear position on the legal requirement to publish the salaries of the members of the management board at listed companies. As far as Porsche is concerned, publishing the individual remuneration details does not provide an investor with information that could be of relevance to its decision to buy or sell shares. When deciding whether to invest or not, an investor must only be able to judge whether the development of the total remuneration of the management board is reasonable in proportion to the Company’s profit. Porsche is therefore convinced that the total sum of management board remuneration and its break-down into fixed and performance-based components is sufficient.
Related link:
Porsche LLC? – the VW fruit machine explained – FT Alphaville