The remuneration of the individual members of the Board of Management is determined by the Supervisory Board on the proposal of the Remuneration Committee of the Supervisory Board, and is consistent with any policy thereon as adopted by the General Meeting of Shareholders.
The objectives of the current Remuneration Policy for members of the Board of Management, as adopted by the General Meeting of Shareholders in 2017, are in line with that for executives throughout the Philips Group. That is, to focus them on improving the performance of the company and enhancing the long-term value of the Philips Group, to motivate and retain them, and to be able to attract other highly qualified executives to enter into Philips’ services, when required. In 2017, the General Meeting of Shareholders also approved the current Long-Term Incentive Plan.
To support the Remuneration Policy’s objectives, the remuneration package includes a significant variable part in the form of an annual cash bonus incentive and long-term incentive in the form of performance shares. The Remuneration Policy does not encourage inappropriate risk-taking.
The Remuneration Committee prepares an annual report, which is included in the Annual Report. The report of the Remuneration Committee contains an account of the manner in which the Remuneration Policy has been implemented in the past financial year, as well as an overview of the implementation of the Remuneration Policy planned by the Supervisory Board for the next year(s).
A full and detailed description of the composition of the remuneration of the individual members of the Board of Management is included in the report of the Remuneration Committee and in other parts of the Annual Report.