Telecom company KPN is considering reforming its bonus system following mounting concern about the effect on operations from both within and outside the company, the Financieele Dagblad reports on Thursday.

Some 40 sub-board level managers will be able to double or triple their salaries over the 2008-2011 period, if they meet cash flow and operating profit targets and remain with the company until next May, the paper says.
But this is leading to a ‘less than optimal’ situation with a ‘short term focus’, says remuneration expert Jan Schuurman in the FD.
According to company sources, a number of directors plan to leave as soon as the bonus has been paid out. ‘KPN is being run like a cycle race with the finishing line in January,’ one source said.
‘This could lead them to cut costs in a way that goes beyond responsible management,’ said another.
In a statement, KPN said it is revising its bonus policy. ‘Given the current debate about remuneration, it will have a different character, as the supervisory board said in the annual report,’ a spokesman said in an email.