GERMANY'S President has hit out at fat-cat pay deals for chief executives after the boss of Porsche, Wendelin Wiedeking, was awarded a 70 million euros ($116 million) salary package.
The earnings of the sports car manufacturers chief have shocked Germans and propelled him well ahead of the previous, much-scorned top earner, Josef Ackermann of Deutsche Bank. Swiss-born Mr Ackermann was paid 13 million last year - a sum that shocked Germany when it was revealed.
Outside the corporate sector there is a remarkable egalitarianism about wages: barely 1,000 a month divides bus drivers salaries from those of doctors or engineers.
Mr Wiedeking, previously regarded as a talented but modest businessman, has broken all records securing a 2006 profits-linked package that puts him alongside some of the worlds best-rewarded business leaders. And Germany is stunned.
President Kohler, in an interview with the Handelsblatt business daily, said: People understandably feel theres something wrong when wages go up steeply (at the top) while other wages are allowed to stagnate.
Bosses have to grasp that their behavior has an impact on social solidarity and I can see that society and the business culture are growing further apart, the President added.
Mr Kohler, who was previously head of the IMF, said that chief executives should demonstrate moral leadership and open themselves up for a dialog with citizens rather than focus solely on the bottom line.
Porsche responded to its ballooning pre-tax profits, fueled by its deft use of stock options in Volkswagen, by awarding a 5,200 bonus to each of its 11,000 full-time workers.
However, that pales against the cash bonanza the six-man management board handed itself for its 2006 performance. They get to share 113 million between them, up from 45.2 million in the previous year. The basic salary of the directors is believed to be about 5.4 million -exact sums do not have to be revealed because Porsche is not listed on the DAX.
But Mr Wiedeking is said to get closer to 7 million.
That is generously topped up when profits jump and Mr Wiedeking and finance director, Holger Harter, were the main beneficiaries. According to company insiders, Mr Wiedeking has walked away with a sum of significantly greater than 60 million.
I have the same contractual terms as I did when I first joined Porsche 15 years ago, Mr Wiedeking said, anticipating a tabloid onslaught.
The joke that Porsche is a giant hedge fund with a small sports car maker on the side is not entirely fanciful. Less than half the annual profits this year came from making and selling its coveted 911s, Boxsters and Cayennes.
Of the 5.86 billion ($9.75 billion) of profit reported this month, no less than 3.59 billion came from stock option profits. These are thought to be paper profits on options to buy more Volkswagen stock to augment Porsches 31 per cent holding in the rival car maker.
Porsche, which is expected to move to take control of Volkswagen at some point, has insured itself against an adverse run-up in the Volkswagen share price in the meantime.
Porsche is also a big player in the foreign exchanges, devising complex financial positions to hedge itself against the sliding US dollar.
Mr Harter, Porsches finance director, has described the financial engineering as options on options on options and said that they delivered profits in their own right of 250 million this year. But he denies he is taking risks with the Porsche balance sheet.