VW Seeks to Defuse Activist Attack by Promising Higher Profit

Volkswagen AG responded to criticism from activist investor Chris Hohn with promises to improve profitability and review management pay, seeking to avoid a confrontation as criticism mounts in the wake of the emissions-cheating scandal. The German carmaker agrees with much of the investor’s analysis and is working on a strategy, including financial targets, that will be presented this summer, Chief Financial Officer Frank Witter wrote in a letter to Hohn that was obtained by Bloomberg. The founder of TCI Fund Management earlier this month slammed Volkswagen for excessive executive pay in light of poor stock performance and bloated costs. “We are under no doubt that our financial performance needs to improve,” Witter said in the letter. “Volkswagen can and should be the most profitable company in the automotive world.”

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