In all likelihood, shareholders will parade their top management at Philips’ annual meeting of shareholders. In line with this, the four board members who led Philips in 2022 will not be made redundant. Consequently, former CEO Frans van Houten can also be held responsible for the policy being pursued.
Prominence in the pillory will be given to those blamed for the sleep apnea debacle. According to FD journalist Thieu Vaessen, Philips has had to recall 5.5 million devices so far. “It is a huge operation that has plunged Philips into a deep crisis”.
“If shareholders vote against the discharge, it will mean losing face for the top management of Philips”
Bonuses
That didn’t stop CEO Van Houten from reclaiming his million-dollar bonus, which went badly for many shareholders. Incidentally, Vaessen adds, Van Houten’s bonus was not tied to Philips’ financial results, but to the company’s environmental goals. In his opinion, Van Houten is the only one entitled to this bonus: the other board members renounced their bonus because they considered it inappropriate in such a crisis situation. “Van Houten didn’t agree, he asked for that bonus and that caused a lot of bad blood among the shareholders.”
I unload
Vaessen and his colleague Peter Kouwenberg have spoken to various shareholders and report that, among others, the Norwegian state fund Norges, which holds a 2.6% stake in the group, will vote against the discharge. In the event of a discharge, the shareholders will not hold the administrator responsible for the incorrect performance of their duties.
“Van Houten claimed that bonus and it caused a lot of bad blood among the shareholders”
Perhaps more important. says Vaessen, is that two major proxy advisory firms advise against voting on this point. And that advice weighs heavily on many institutional investors (pension funds and asset managers, ed). Many investors are faced with a dilemma. If they don’t grant discharge, it’s also a slap on the fingers of current CEO Roy Jacobs, who was at the helm for two and a half months last year. And that disapproval is aimed primarily at the old CEO.’
Many investors believe the new CEO isn’t faring too badly. In particular, they appreciate that he fully understands the urgency of the sleep apnea problem. “And that’s reflected in the share price, which has recovered slightly over the past six months.” If shareholders vote against the discharge, it means losing face to the top of Philips. According to Vaessen, the current top can simply stay, but “should this situation escalate further, it will be easier for them to be held personally liable for the damage suffered by investors.”
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
