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UPDATE 1-Volkswagen CEO's pay package soars on record group profit

* CEO's overall compensation exceeds new 10 mln euro cap

* Remuneration gain in line with new rules, says CFO

* Top management compensation up 27 pct vs. 2016 (Adds CFO comment)

BERLIN, March 13 (Reuters) - Volkswagen group's record earnings drove up Chief Executive Matthias Mueller's salary package by about 40 percent last year to 10.14 million euros ($12.47 million) in pay and benefits, the carmaker said on Tuesday.

A year ago Europe's largest automaker introduced new remuneration rules to curb investor criticism over big bonuses paid to executives despite the 2015 "dieselgate" emissions scandal.

Mueller, 64, whose contract expires in 2020, earned almost a fifth more than the 8.6 million euros that Daimler CEO Dieter Zetsche made for 2017, a year in which Daimler's Mercedes-Benz brand beat rivals Audi and BMW in global luxury car sales for a second year.

Volkswagen group nearly doubled operating profit last year, even as it continued to grapple with fallout from the emissions scandal and prepares to press ahead with a costly strategic shift to electric and self-driving cars.

In 2016 Mueller had earned 7.3 million euros under VW's then backward-looking remuneration system, which allowed bonuses to be based partly on VW's performance over the previous two years.

Under the new rules, the carmaker's supervisory board capped total pay for its CEO at 10 million euros and other top managers at 5.5 million euros.

Under Germany's HGB commercial code, overall compensation of VW group's top executive board jumped 27 percent to 50.3 million euros last year from 39.6 million a year earlier, VW said.

Sources at VW said that Mueller's package exceeded the 10 million limit because of perks and retirement provisions that are usually included under HGB rules. Without those, the CEO would have earned about 9.5 million euros.

Mueller declined to comment at VW's results news conference on whether it was unfortunate that the 10 million euro cap had been hit so soon after its creation.

Finance chief Frank Witter said the increase in Mueller's remuneration chimes with calls from investors who have said that top managers are right to benefit from the group's success in profitable times.

"For that reason, we feel vindicated and also (to be) fully in compliance with the (compensation) codex," Witter said. ($1 = 0.8130 euros) (Reporting by Andreas Cremer Editing by Maria Sheahan and David Goodman)