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Finance Minister Schäuble Rejects Plan to Reign in Bonuses

Germany Government
German Finance Minister Wolfgang Schaeuble arrives for the weekly cabinet meeting of the German government at the chancellery in Berlin, Wednesday, Dec. 14, 2016. (AP Photo/Markus Schreiber)

In an op-ed for Handelsblatt, Finance Minister Wolfgang Schäuble has rejected a plan by the center-left Social Democrats to restrict bonuses for corporate executives.

The Social Democrats have proposed tightening the tax code to reign in the ability of executives to apply write-offs against their salaries, bonuses and severance packages.

Mr. Schäuble, a center-right Christian Democrat, said the tax code isn’t a suitable place to address the issue of bonuses and dismissed the proposal as a symbolic gesture that would only disappoint voters.

The finance minister said there’s already comprehensive rules in place on fixed and variable compensation. New rules are also in the works that would allow companies to compel executives to return their bonuses under certain circumstances, he said.

Executive bonuses have become a hot-button issue as the political parties switch into campaign mode for Germany’s federal elections in September 2017.

The debate over bonuses was sparked by the size of former VW chief executive Martin Winterkorn’s pension. Mr. Winterkorn, who resigned over the diesel emissions scandal, will receive €1.1 million ($1.2 million) annually.

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