Volkswagen is reopening settlement talks with former Audi CEO Rupert Stadler regarding the diesel emissions scandal. According to the invitation to the Annual General Meeting (AGM), Volkswagen and Audi have entered into negotiations with Stadler to conclude a new liability settlement. However, no agreement has been reached so far, and none is expected for the time being. This development follows Stadler's final criminal conviction for his role in the scandal. As a result, Stadler's compensation-related claims have been forfeited, meaning his agreed personal contribution no longer aligns with the sum originally negotiated.

In 2021, VW reached a multi-million euro settlement with former Group CEO Martin Winterkorn, Stadler, and their directors and officers (D&O) liability insurers. Stadler was set to contribute 4.1 million euros to the settlement, primarily by waiving severance claims against Volkswagen and Audi. Following his conviction, these claims have lapsed, necessitating new negotiations. Furthermore, a ruling is still pending from the Higher Regional Court (OLG) of Celle, which must determine the basis for calculating the managers' personal contributions. The OLG had originally deemed it sufficient to base these contributions solely on the executives' salaries, regardless of their total assets.

However, the Federal Court of Justice (BGH) took a different view in September 2023. The OLG must now clarify whether questions regarding the financial assets of Winterkorn and Stadler were adequately answered during the 2021 AGM. Should shareholders' rights to information have been restricted, the approval of the settlement would not have been properly obtained, requiring a new vote by the AGM.

The inclusion of the entire multi-million euro settlement on the AGM agenda is a direct consequence of the BGH ruling. The court stipulated that VW shareholders must re-approve the 2021 liability settlement. In the meeting invitation, shareholders are urged to approve the agreement with Winterkorn but to vote against the existing agreement with Stadler.

The scandal broke in 2015 when it was revealed that VW diesel engines were equipped with illegal defeat devices, ensuring emission limits were met only during testing and not in real-world driving conditions. An investigation commissioned by the Supervisory Board concluded that Winterkorn, Stadler, and others had negligently breached their duties of care, resulting in billions of euros in damages for VW. In June 2021, the Group concluded liability settlements with D&O insurers and the two executives, which were approved by 99 percent of the votes at the AGM shortly thereafter. D&O insurance covers damages caused by top managers in the course of their duties.

(Reporting by Christina Amann. Edited by Olaf Brenner. For inquiries, please contact our editorial office at Berlin.Newsroom@thomsonreuters.com (for politics and economics) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets))