March 12, 2025, will not be a shining moment for Lutz Meschke. The CFO and Vice-CEO of Porsche AG is expected to present a weak earnings report for 2024 on this day. After the recent announcement of a decline in sales, the corporate leadership will likely reveal a substantial drop in turnover and profit.

Meschke's profit warning in the summer of 2024 gave investors a preview of what to expect. Investors have been turning away from the stock of the Swabian Dax company, and the share price is currently well below the offering price from the IPO in September 2022.

The weak share price reflects the growing gap between Porsche's operational ambitions and reality. The competitive pressure is intensifying due to the rise of Chinese automakers in the electric vehicle sector, the ongoing economic weakness in the key Chinese market, and the continued vulnerability of supply chains to disruptions.

In this challenging situation, the 58-year-old manager is trying to keep a cool head. Externally, he presents himself as composed, controlled, and pragmatic. Meschke is a numbers person. Unlike CEO Oliver Blume (56), who has also led Volkswagen Group since 2022, Meschke is not an internal product of the passenger and commercial vehicle conglomerate.

While Blume, originally from Braunschweig, started his career at Audi after finishing his mechanical engineering studies 30 years ago, Meschke, born in Hilden, initially worked for KPMG and then briefly for Hugo Boss in senior roles after his business administration degree in 1991. In 2001, he joined Porsche AG, where he quickly climbed the ranks. Meschke has been CFO for 16 years and Deputy CEO for 10 years.

This duo led the company back to the stock market almost two and a half years ago. However, the success story is increasingly facing challenges. Volkswagen's core brand is in a deep structural crisis, Porsche's margins are eroding, and Blume is under greater pressure than ever at VW. The weaknesses of his already controversial dual role are now becoming apparent. With Blume increasingly tied up in Wolfsburg, Meschke is gaining more influence at Porsche's headquarters. In practice, he is running Porsche AG and providing Blume with the necessary support for restructuring Volkswagen's mass-market business.

But Meschke's work hours for his main job are limited. In addition, he has been responsible for investment management at Porsche SE, the holding company dominated by the Porsche and Piëch families, for over four and a half years. In this role, he manages the two strategic shareholdings of the Stuttgart-based company, which has around 40 employees. Porsche SE is the second-largest individual shareholder of Porsche AG and, by voting rights, the largest individual shareholder of Volkswagen AG.

Much like Blume, but on a different level of responsibility, Meschke navigates between two companies within the VW/Porsche empire – Porsche AG and Porsche SE. For Meschke, this is a tightrope walk, as it involves potential conflicts. As CFO of Porsche AG, he is likely to focus on paying out sufficient dividends to Porsche SE and VW but wants to retain enough profits for the company's own purposes (e.g. to further expand its electric vehicle models). As a board member of Porsche SE, however, he must push for as much profit distribution from Porsche AG as possible. The billion-dollar write-offs announced in December, which are expected to lead to heavy losses for Porsche SE in 2024, underscore this dilemma.

The two entrepreneurial families may not see this as a problem. But they have a different perspective on things compared to external professional investors who hold small stakes in the companies. In this loyalty conflict with the main shareholder clan, Meschke, like Blume, finds himself caught.

Hans Dieter Pötsch, the 73-year-old Austrian CEO of Porsche SE and Chairman of VW's supervisory board, is well-acquainted with this complex relationship. Dual roles in the VW/Porsche ecosystem have a certain tradition among top managers trusted by both family branches. Yet, this practice contradicts modern corporate governance principles.