Philips, the Dutch medtech company, announced on Tuesday that it would cancel bonuses for its top executives for 2022. The decision comes after a global recall of its breathing equipment last year caused the company's market value to plummet by 70 percent. The announcement was made in the company's annual report, where Philips acknowledged the negative experience of its shareholders and other stakeholders.
Disappointing Year for Philips and Its Stakeholders
According to Philips, 2022 has been a "very disappointing year" for the company and its stakeholders. The report also showed that Frans van Houten, the former CEO of Philips, did not waive his short-term bonus of 208,370 euros in 2022, which is equivalent to about 1.527 million yuan. Roy Jakobs succeeded him following the recall last October.
Shareholder Dispute Over Executive Bonuses
Philips faced a shareholder dispute last year, with shareholders urging the supervisory board to cancel 2021 bonuses for Van Houten and other top executives. However, the request was unsuccessful. The recall began in 2021, and the company's market value suffered a significant decline as a result.
Negotiations with the US Department of Justice
Aside from the decision to cancel executive bonuses for 2022, Philips also revealed that it is in negotiations with the US Department of Justice to resolve the recall issue. The company did not provide further details on the matter.
The Way Forward for Philips
Despite the challenges faced by Philips in the past year, the company remains focused on delivering quality products and services to its customers. In its annual report, Philips emphasized its commitment to sustainability, innovation, and digitalization. The company also stated its goal of becoming a leader in the health technology industry.
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