VW Group Ties Manager Bonuses to Cash Flow

The Volkswagen Group’s supervisory board approve a change in managerial bonus criteria, linking them to each of its brand’s absolute net cash flows starting in 2024.

The move aims to align strategic objectives more tightly with financial targets, according to the company's chief financial and chief operating officer, Arno Antlitz.

The net cash flow criterion supersedes the earlier practice of tying manager bonuses to the operating profit of both the VW Group and its Chinese joint ventures.

Antlitz reveals an intention to assess the performance of each brand’s management boards against net cash flow in 2024, with plans to extend the evaluation to the entire management team in 2025.

“All leaders should have skin in the game,” he says in a post to the LinkedIn social media platform.

A restructuring of management remuneration at the VW Group was initially disclosed during its Capital Markets Day presentation in June.

“This approach isn’t just about changing metrics; it’s about fostering a culture of accountability and performance at all levels of our organization. It will ensure that our remuneration scheme further facilitates a prioritization of profitability and efficient use of capital, which are critical to our shareholders and to our long-term success,” Antlitz says.