Porsche Automobil Holding SE, the investment vehicle of Volkswagen AG’s billionaire owner family, reversed course on its dividend proposal by seeking a far smaller reduction in the payout than the one announced just three days ago.
Porsche’s management and supervisory boards will ask shareholders at the annual meeting to approve a payout of 1.004 euros per ordinary share and 1.01 euros per preference share, the Stuttgart, Germany-based company said Monday in a statement. While only about half of last year’s payout, the amounts put forward today are five times higher than what Porsche proposed only on Friday.
Volkswagen, besieged by the diesel-emissions scandal that’s weighed on management and company finances for seven months, slashed its dividend proposal for investors in the carmakers’ publicly traded shares by 97 percent on Friday. The company has been subject to public debate about executive bonuses in light of the billions on fines facing Volkswagen, which reported the biggest annual loss in its history on Friday after more than doubling provisions tied to costs from the diesel fiasco.
Porsche will fund the 308 million-euro payout from from cash reserves, said Albrecht Bamler, a spokesman. The board made the change to reflect the positive outlook given by VW Chief Executive Officer Matthias Mueller on Friday for the car manufacturer’s operating business and to maintain a “sustainable dividend policy,” Bamler said Monday by phone.
Porsche’s share capital comprises 306.2 million shares divided equally into common stock, all of which the Porsche-Piech family controls, and publicly traded preferred shares, which don’t carry voting rights. The family’s payout would surge to 153.7 million euros ($173.3 million) from the 31.2 million euros under the initial announcement on Friday, according to data compiled by Bloomberg.
Volkswagen reported a 4.1 billion-euro operating loss for 2015 on Friday after doubling provisions for its diesel-emissions test-cheating scandal to 16.2 billion euros to brace for the cost of fixing 11 million cars worldwide, fines and litigation expenses. The carmaker proposed slashing the dividend per preferred share, the most widely traded version of its stock, to 17 euro cents from 4.86 euros the previous year.