For what seems like months, stories have burned up the wires about the future of Porsche and Wendelin Wiedeking, its well paid CEO. Rumors of Wiedeking’s imminent departure became reality after nearly two decades of triumphant rule turned tragic through a series of financial missteps and market maneuvers. Had his plan worked, we would have seen “David” (Porsche) gobbling up and taking control of the much larger “Goliath” (VW). Instead, in a flurry of activity late last night (or early morning in Germany), the Supervisory board of Porsche SE announced their approval to recapitalize the debt laden company to the tune of $7.1 billion and at the same time green-lighted plans for an investment by the government of Quatar to provide the much needed capital. As what some might see as the coup de gras, Porsche CEO Wendelin Wiedeking and Porsche CFO Holger Harter were terminated from their positions effective immediately.
Wiedeking, credited for turning Porsche from the brink of bankruptcy in the early ’90s to the “most profitable car company in the world” is not leaving empty handed. While his reported severance package of 50 million Euros is a far cry from the numbers that have been floated over the last few weeks (I’ve read rumors of a package worth as much as 150 million Euros) it is still a very large and very gold Parachute.
Wiedeking has come under intense scrutiny in the past few years as the country’s (and indeed, the industries) best paid executive. Through a profit sharing clause in his contract, Wiedeking was entitled to .09% of the companies profit. As Porsche’s profits grew, so did Wiedeking’s payout; culminating in payments of more than 77.4 million Euros last year. Mindful of the ever growing backlash against huge executive compensation, Wiedeking released his own statement shortly after his termination pledging to donate more than 50% of his severance to various charitable trusts, with the largest portion (25 million Euros) earmarked for promoting “socially fair development” at Porsche facilities and another 1.5 million Euros spread evenly across three charities that benefit journalists.
Michael Macht to Replace Wiedeking as CEO of Porsche AG
Replacing Wiedeking at Porsche AG’s helm will be long time Porsche executive Michael Macht. Macht started his career with Porsche AG in 1990 as a specialist for engine planning. However, he is probably best known for his roles in the development and creation of the Porsche Cayenne and Panamera. Thomas Edig, the Board member in charge of Human Resources of Porsche AG will become Macht’s deputy. Furthermore Macht and Edig have been appointed as Members of the Board of Management of Porsche SE, Macht in charge of technology and products, Edig with responsibility for commercial issues and administration.
For more coverage on this event, you can read:
Bloomberg
The Truth About Cars
The NY Times
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[Source: PCNA: NY Times]
