FRANKFURT -- The billionaire families who control BMW and Volkswagen Group have become a stumbling block as German automakers seek to persuade the government to agree on incentives to revive demand for new cars.
Germans want to know why taxpayer funds should go toward helping the automakers when they are not canceling shareholder dividends or executive bonuses. The economic hit caused by the coronavirus pandemic means that many family-owned restaurants and small stores across the country face the loss of their livelihoods.
BMW's annual meeting on Thursday approved a shareholder dividend payment of 1.65 billion euros ($1.78 billion).
Ahead of the meeting, Deutsche Bank's fund management arm, DWS Group, said the automaker should consider a lower payout to protect its balance sheet. Separately, Germany’s DSW investor lobby group said it wants BMW to be more frugal given that it’s asking for state-funded car-buying incentives and is sending thousands of workers home at reduced wages.
BMW has about 20,000 employees on short-time work where the state pays most of their wages. The company said paying the dividend is important for investor confidence. "Reliability toward our investors creates trust and maintains the attractiveness of BMW AG as an investment," it said in a statement on March 18.
BMW's controlling shareholders are the youngest children of Herbert Quandt, the German industrialist credited with BMW’s revival in the postwar years. They are Susanne Klatten, who is Germany's wealthiest woman, and her brother, Stefan Quandt. They are listed as owning 46.8 percent of the automaker's shares and will earn a combined 730 million euros from the payout.