FRANKFURT (Reuters) - German prosecutors on Tuesday sought charges against a current Volkswagen (VOWG_p.DE) manager as well as a former manager and two former board members, accusing them of awarding works council members inflated salaries.
The Braunschweig prosecutor said that managers responsible for personnel issues stand accused of a breach of fiduciary trust for awarding salary and bonus awards which caused damages worth 5.05 million euros ($5.57 million).
A court must now decide whether the accusations, made by the prosecutor’s office in Braunschweig, near where Volkswagen is headquartered, will be brought before a judge.
A spokesman for Volkswagen on Tuesday said that there had been no misconduct in relation to deciding appropriate salary levels for works council representatives.
Under Germany’s two-tier board system, workers have seats on the company’s board of directors, with broad powers to veto sweeping strategy decisions.
Upon deciding which level of salary to award works council members, members of VW’s personnel committee deliberately inflated pay by choosing to benchmark peers in a higher salary band, ensuring that VW’s labor leaders got a pay rise, the prosecutor’s office said.
Between 2011 and 2016 five members of the works council received excess pay, with 3.125 million euros awarded to the works council chief, the prosecutor’s office said.
Such awards were to the “disadvantage” of the company, the Braunschweig prosecutor’s office said.
Reporting by Jan Schwartz and Edward Taylor; Editing by Michelle Martin/Paul Carrel/Alexandra Hudson