Philips leaders will lose out on their 2022 bonuses after “disappointing” year

The management board of medical technology company Philips has said it will not take bonuses for last year’s performance. The decision was jointly agreed by both the Supervisory Board and the company’s top executives, Philips said. However former CEO Frans van Houten will still collect his substantial bonus.

The decision to give up the bonuses was made after a very disappointing year, including the ongoing trouble with the respiratory devices and the company’s supply chain, according to CEO Roy Jakobs. He also announced rounds of layoffs and a reorganization in October and again in January that will result in a total of 10,000 jobs vanishing over the coming years.

Philips executives are normally entitled to a cash bonus, but also a bonus in shares that vest over a longer period of time. The management board has refused both bonuses. Last year there was a great deal of criticism from Philips shareholders over the company’s remuneration policy, even when it was already facing serious problems with respirators, sleep apnea devices, and supply. The company said it has learned from this and has come to its decision after discussions with shareholders.

However, former CEO Frans van Houten did not relinquish his bonuses. He received a bonus of 265,000 euros and will receive shares, as well. His total remuneration, including pension contribution and other payments, amounted to 4.7 million euros. That is 14 percent lower than in 2021. Van Houten will officially be employed by Philips until April and will also receive an annual salary.

Jakobs, who joined in October, will also receive a base salary of 1.2 million euros. That is less than the 1.325 million euros that his predecessor, Van Houten, earned.