IMF sees ‘risk of world economic derailment’; Volkswagen may cut jobs to pay for scandal; LinkedIn CEO gives his $14m bonus to staff

1 IMF sees ‘risk of world economic derailment’ (Karishma Vaswani on BBC) The International Monetary Fund has warned that the global economy faces a growing “risk of economic derailment” and must take steps to boost global demand.

David Lipton, second in command at the IMF, outlined some of these risks in a speech to the National Association for Business Economics in Washington. “The IMF’s latest reading of the global economy shows once again a weakening baseline,” he said. “We are clearly at a delicate juncture.”

The comments come after weaker-than-expected trade figures from China showing that exports plunged by a quarter from a year ago. The IMF has already said it is likely it will downgrade its current forecast of 3.4% for global growth when it next releases its economic predictions in April.

http://www.bbc.co.uk/news/business-35761017

2 Volkswagen may cut jobs to pay for scandal (The Guardian) Volkswagen may have to cut jobs in the US and Europe, depending on how much it is fined for manipulating diesel emissions tests, a company official has told workers at its German headquarters.

The US Department of Justice is suing VW for up to $46bn for breaching US environmental laws. There is still no fix for nearly 600,000 cars affected in the US almost six months after the scandal erupted. The extent to which VW may be forced to cut jobs to meet the costs of scandal depends “decisively” on the level of fines, according to VW’s works councils chairman, Bernd Osterloh.

Osterloh, who sits on VW’s 20-member supervisory board, said: “Should the future viability of Volkswagen be endangered by an unprecedented financial penalty, this will have dramatic social consequences.” He called on the US authorities to consider the risk of possible job cuts in deciding on penalties.

Europe’s largest car manufacturer employs more than 600,000 people at about 120 factories, including 270,000 in Germany. VW’s chief executive, Matthias Müller, said the scandal would inflict “substantial and painful” financial damage on the company.

Last year VW set aside €6.7bn to cover the expected costs of recalling of about 11m diesel vehicles. It has postponed the release of its 2015 results until 28 April to assess the financial implications of the crisis. Müller said: “The software manipulations and its consequences will keep us busy for a long time,” adding that it would take years to determine the full financial impact of the scandal.

Lower Saxony, a German state that is VW’s second-largest shareholder, expects more “unpleasant news” to emerge in the coming months but it remains confident that the company has the financial strength to cope, Müller said. German prosecutors have widened their investigation into the scandal and are targeting 11 more employees.

http://www.theguardian.com/business/2016/mar/08/volkswagen-may-cut-jobs-to-pay-for-emissions-scandal

3 LinkedIn CEO gives his $14m bonus to staff (Emily Price in San Francisco Chronicle) After the company’s stock took a nosedive last month, LinkedIn employees are about to get a pretty hefty stock bonus. The company’s CEO, Jeff Weiner, has decided to give his annual bonus to employees. Weiner is entitled to $14 million.

Rather than take the annual stock grant, Weiner is putting it back in the general pool for employees, adding to the compensation they would typically receive. The hope being that the gesture will improve employee morale and encourage those who might otherwise jump ship to stick around.

Weiner currently has 105,924 shares of LinkedIn stock (worth $12.7 million) and close to $58 million in vested shares that he can purchase for 2% of LinkedIn’s current stock price. Additionally he has 90,000 unvested restricted stock units and over 400,000 more options available at various points in the vesting process. He’s not exactly struggling.

Weiner isn’t the only CEO to use his stock bonus as a tool in retaining employees. After layoffs and a stock price drop in October, Twitter CEO Jack Dorsey gave away around a third of his awarded stock to employees. That ended in roughly $200 million in stock being given back to Twitter staff. LinkedIn’s stock price currently sits at around $115. In December, that price was close to $240.

LinkedIn CEO gives $14 million bonus to employees

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About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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