Volkswagen Group slashed the maximum compensation for its top executives after an emissions scandal undermined confidence in the German automaker’s leadership, even as the company returned to profitability in 2016 following a brief dip into red ink.
Volkswagen said Friday that its board had voted to cap the total annual compensation for its chairman and CEO to 10 million euros annually, which currently translates to $10.6 million.
The board also limited maximum compensation for other top executives to 5.5 million euros, or $5.8 million with current rates.
Taken together, the reductions reflect a cut of up to 40% from the previous maximum compensation, although minimum salary was increased by up to 30%.
The moves were widely expected after Volkswagen executives came under fire for their handling of an emission scandal that engulfed the company, triggering massive financial penalties, major vehicle buyback programs, a criminal settlement in the U.S. and an ongoing criminal investigation in Germany.
The company also said Friday that it had returned to a net profit of 5.1 billion euros in 2016, or $5.4 billion based on today’s currency rates, after posting a loss of 1.6 billion euros in 2015.
The 2016 profit absorbed costs of 6.4 billion euros to pay for the emissions scandal, bringing the total bill for the violations to well over $22 billion.
Total revenue increased 1.9% to 217 billion euros, or $230 billion.
Volkswagen also said it had revised its executive payment structure to include more incentive-based compensation. No bonuses will be paid if the company fails to achieve certain profit levels.
Volkswagen recently passed Japanese automaker Toyota as the world’s largest automaker by sales volume, but the accomplishment was bittersweet in view of the emissions crisis.