Porsche chief paid $87 million to leave his job

Heard about the boss who gets paid multi-millions of dollars to get out of his job??? Like more than $80 million??? Well, see article below - it IS true, it DID happen. And I thought we are supposed to be in a worldwide recession, with the global financial crisis & all that.

I was just blown away - $87 million exit payout. Just like that. That is just obscene. And all that, at a time when people are losing their jobs & struggling to get back into the workforce. And here we have this guy given the equivalent of lottery money (in fact, even more than that) to get out of his company. What's he going to do now?? The guy is financially set for life - he doesn't have to work anymore.

Imagine what I would do if I am given just 1/10 of that. That will still be a lot of money - for me, anyway. Hhhhhmmmm, with just under $9 million, I'd give a portion to my family & friends (I'm sure lots of people would suddenly clamour to be my friend), a portion to my church, & a portion to other Christian organisations (charities, missions, etc). Then I would buy myself a nice waterfront property, expand my investment portfolio, & take a tour of the world. Whatever money is left, I shall squander. Hahaha!

Anyway, here is the article (which I saw on NineMSN):

Porsche chief paid $87 million to leave his job
24/07/2009 6:52:15 AM

The boss of Porsche will be paid $87 million to leave his job after the luxury sportscar maker was taken over by Volkswagen (VW).

Wendelin Wiedeking, who was Germany's highest paid executive, was pushed out after his bold plan to take over VW backfired leaving Porsche with more than $17 billion of debt.

The tables were then turned and Porsche itself became the subject of a takeover bid from VW.
The VW takeover cranks up a campaign from Europe's biggest carmaker to challenge Japanese rival Toyota.

VW also said on Thursday the Gulf emirate of Qatar would buy 17 per cent of VW shares amid a broadside of news that rocked the German car industry and served notice to international competitors, especially recovering US giant General Motors.

The developments emerged from an epic corporate boardroom battle that fuelled a caustic family feud and left Volkswagen standing tall.

But its ultimate shareholder structure and management team were still in suspense.

Nevertheless the deal leaves VW a small step closer in terms of vehicle sales with world number one, Japanese giant Toyota.

VW wants to overtake Toyota by 2018 and could pass US behemoth General Motors this year to become number two worldwide as GM emerges from bankruptcy and slims down in an effort to survive.

Porsche chief executive Wiedeking, the principal victim in the struggle, said he would step down after losing a long battle against VW supervisory board president Ferdinand Piech for control of both companies.

"We have opened the way ... to the creation of an integrated group," VW chief executive Martin Winterkorn said following a meeting of his group's supervisory board in Stuttgart.

The concept approved by both companies includes the integration of Porsche's car activities into VW and a reinforcement of the overall Porsche holding group's finances to guarantee its independence within the European auto giant.

Winterkorn's comments came after the owners of Porsche said they would also wrap up talks with Qatar and raise at least 5 billion euros ($A8.7 billion) in fresh funds via a capital increase.

Further details of the new arrangement would be released on August 13 following another meeting of the VW supervisory board, the group said.

Porsche's owners, the Porsche and Piech families who are descendants of the company founder Ferdinand Porsche, said early on Thursday following all-night talks that Wiedeking would resign and that "the basis for the creation of an integrated group between Porsche SE and Volkswagen AG" had been laid.

Wiedeking - said to be the best-paid boss in Germany - was to get 50 million euros ($A87.08 million) in severance pay, of which half would go to a "social foundation" to aid Porsche workers and others.

Wiedeking and Porsche finance director Holger Haerter, who also resigned, had devised a bold financial strategy to take over VW based on complex stock options in the much bigger group.

Porsche SE, the holding company, currently owns 51 per cent of the shares in VW.

The plan collapsed however, leaving Porsche with 10 billion euros ($A17.42 billion) in debt, and putting Piech in a position to turn the tables and take Porsche on as VW's 10th brand.

Porsche production chief Michael Macht, 48, is to succeed Wiedeking as head of Porsche's core carmaking division, the company said.

But the prospect of VW swallowing up Porsche might provoke bitter resistance.

At a rally of 5,000 Porsche workers in Stuttgart, major shareholder Wolfgang Porsche insisted the maker of 911 sports cars would remain independent.

"Trust me ... the Porsche myth is alive and will never founder," he told the boisterous crowd with a trembling voice.

"The families are in complete agreement on the fact that Porsche's success is founded on the brand's independence," he said, and Porsche would now "negotiate with VW on equal terms."

Porsche abandoned Wiedeking's ambitious plan to take full control of VW and its hefty reserves of liquidity in May, and was forced to find other sources of financing.

The German state of Lower Saxony, which owns 20 per cent of VW and holds a veto over its strategic decisions, stood between Porsche and VW's cash.

Lower Saxony regional premier Christian Wulff said on Thursday that Porsche would remain an autonomous group along the lines of VW's high-end unit Audi.

"We will work together to become the world number one" automobile maker, Wulff added.


Link: http://money.ninemsn.com.au/article.aspx?id=841157&print=true&_defaultfontSize=11&_js_siteid=255