Philips shareholders vote against executive bonuses

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Philips shareholders voted against bonuses for senior executives at the company’s general shareholders’ meeting on Tuesday. They are not happy with the financial results of the past year and the debacle of sleep apnea devices. This was an advisory vote and Philips is “taking the comments into account”.

During the meeting, after several questions, it became clear that few shareholders were behind the bonuses for the company executive. Due to the bad year, these were already lower than expected, but even then most shareholders disagreed. 79% voted against the proposed fee.

CEO Frans van Houten achieved 64% of his target and the performance of the CFO and the Legal Director also remained below the mark.

Philips has been under fire since July last year because problems arose with its breathing equipment. The so-called first-generation Dreamstation devices were five or more years old and mainly caused problems in humid or hot environments. The foam could crumble under the effect of heat or humidity and if the machine is not properly cleaned. Harmful gases could also be released.

Some people had headaches and breathing problems from the foam, and the gases could cause hypersensitivity. Both were possibly also carcinogenic and toxic.

The company had to recall millions of devices and has already set aside around 800 million euros to settle the matter. As a result, this year’s profit was around 39% lower at 612 million euros.

It is not yet clear whether or not Philips executives will receive their bonuses, but the supervisory board will discuss the issue and “take into account shareholder feedback”.

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