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VW’s next bit of diesel damage control may be to cut executive bonuses

It’s not a particularly good time to be a Volkswagen executive. The ongoing diesel scandal has forced many executives to step down, and now it seems VW might cut the bonuses of those who are still around.

Fallout from the diesel scandal could cost Volkswagen billions of dollars, and labor leaders as well as the German state of Lower Saxony (the company’s largest shareholder) are calling for executive bonuses to be cut in response. The company’s supervisory board is now discussing bonus cuts, people said to be familiar with the matter told Reuters.

VW’s nine executives earned a combined 70 million euros ($80 million) in 2014, according to company records. In comparison, Mercedes-Benz parent Daimler paid its executives 37 million euros ($42 million) last year. The Volkswagen total includes 54 million euros ($61 million) in bonuses. VW is now looking into “models” that would reduce that amount, the sources said without giving specific details.

The company’s supervisory board is expected to approve some form of executive-pay compromise on April 22, and publish details with Volkswagen’s annual report on April 28. That puts the deadline for an agreement the day after a court deadline for VW and U.S. regulators to agree on a plan to actually recall nearly 600,000 diesel cars that are still producing excess emissions.

The April 21 deadline was set by U.S. District Court Judge Charles Breyer after Volkswagen missed a previous March 24 deadline. A recall plan would need to be approved by both the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). EPA Administrator Gina McCarthy recently said VW may not be able to come up with a satisfactory proposal in time.

The two agencies already rejected one plan for the 482,000 cars equipped with 2.0-liter four-cylinder engines, saying it lacked detail. A separate plan for 85,000 vehicles  with 3.0-liter V6 engines was submitted in February, but there’s been no news of it since.

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