VW adds impetus to executive pay debate Volkswagen has given new impetus to the debate about executive pay after its chief executive received €17.5m in salary, bonuses and long-term incentives last year for steering the carmaker to record revenues and earnings. Martin Winterkorn's reward makes him the highest paid executive at a German publicly listed company - likely to outstrip Josef Ackermann at Deutsche Bank and Michael Diekmann at Allianz. It underlines the striking improvement in VW's profitability and sales achieved on his watch. Mr Winterkorn said: "The question was asked whether automotive managers are the modern bankers ... I would say that don't forget that this result is a real-economy result. VW's management defended the payout, emphasising the carmaker's achievements last year - when it sold more than 8m vehicles and made €11.3bn in operating profit - while pointing out that much of the payout was geared towards rewarding profitability over a number of years. Horst Neumann, board member responsible for human resources, said: "If you would ask whether Mr Winterkorn has earned his pay with regards to performance and success I would say a clear: Yes." Yet the payout threatens to stir up the debate in Europe about the appropriate level of executive pay. The issue shot to the top of the French presidential election campaign late last month when François Hollande, the opposition Socialist candidate, said he would impose a 75 per cent marginal tax on annual incomes above €1m, if elected. Porsche, in which VW holds a 50 per cent stake, triggered a row in Germany in 2009 when it paid out €50m to ousted chief executive Wendelin Wiedeking. Hans-Christoph Hirt, corporate governance expert at Hermes Equity Ownership Services, said: "The sheer size of the payout raises questions about whether it meets the criterion of "appropriateness" under German corporate governance standards ... [But] Mr Winterkorn is a bit of an exception - VW has done exceptionally well. Mr Winterkorn's pay almost doubled from €9.3m last year to a total far in excess of Daimler chief executive Dieter Zetsche who earned €8.7m and Peter Loescher, chief executive of Siemens, who received a similar amount. In contrast Ford disclosed last week that Alan Mulally, its chief executive, received company shares that vested last year worth $58.3m. Mr Winterkorn's pay consisted of a €1.9m fixed salary and €11m bonus, as well as contributions from a long-term incentive plan. VW's executive bonus payment is primarily based on the financial results achieved in the past two years, while the long-term incentives are tied to four-year performance measured according to customer and employee satisfaction, unit sales growth and return on sales. In total, VW paid out €70.6m to its eight board members compared with €36.7m in the previous year. Hans Dieter Poetsch, chief financial officer, received €8.1m in total pay. Analysts were relatively calm about Mr Winterkorn's pay packet. It's pretty extraordinary by German and European standards, but he's been a faithful supporter of [VW chairman] Ferdinand Piëch for two decades and one could argue this is his reward. You can't argue with the results VW is achieving under his watch ... I don't think investors will complain. VW proposed to pay a dividend of €3 per ordinary share compared with €2.20 the year before and its workers last year received a bonus of €7,500 each. Unveiling detailed financial results on Monday, the carmaker said it expected operating profit in 2012 to match last year's record of €11.3bn as stiff competition in Europe offsets an expected increase in unit sales. "You find us in a good mood today - upbeat and self-confident," Mr Winterkorn said. Additional reporting by John Reed in London.