Wednesday 25 May 2022

Philips shareholders vote overwhelmingly to reject bonus for CEO

Shareholders in medical technology company Philips have voted massively against awarding a €1.8 million bonus to chief executive Frans van Houten.

Several large shareholders had said ahead of Tuesday’s AGM that they would vote against the bonus because they were unhappy about delivery problems and issues with the company’s widely used sleep apnea machines.

The company has launched a worldwide product recall for the breathing equipment, at a cost of nearly €900 million.

Almost 80% of shareholders at the meeting voted against giving Van Houten and his fellow two executive board members a bonus, but the vote is non-binding.

‘We regret this result and we are taking the feedback seriously,’ supervisory board chairman Feike Sijbesma said. ‘But I want to emphasis that the board has also done good things.’

Van Houten himself told shareholders he was extremely sorry about the pain that the company’s problems have caused to small shareholders. Philips’ share price has more than halved over the past year.

He refused to comment on the bonus, which would be additional to a €1.3 million pay package, and would not say when pressed by Gerben Everts, director of shareholders’ association VEB, if he would turn down the extra payment.

‘I have spoken about it with the supervisory board,’ he said. ‘Believe me. I have invested a lot in Philips. I have given my life to it. I have a lot of shares and I feel the pain like everyone else.’

The Financieele Dagblad said there had been protests about bonuses for executives at other Dutch firms this year, including Besi, AkzoNobel and Accell.

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