Philips 2004 Annual Report Download - page 26

The 2004 General Meeting of Shareholders approved a proposal
to allocate a maximum of 2.5% of the annual LTIP pool-size to
members of the Board of Management.
Grants to members of the Board of Management under the
Long-Term Incentive Plan
20021) 20032) 20043)
Members Board
of Management
stock
options
stock
options
restricted
share
rights
stock
options
restricted
share
rights
G.J. Kleisterlee 115,200 52,803 17,601 48,006 16,002
J.H.M. Hommen 96,000 44,001 14,667 40,005 13,335
G.H.A. Dutiné 124,8004,5) 35,208 11,736 32,004 10,668
A. Huijser 76,8005) 35,208 11,736 32,004 10,668
1) Stock Option Performance Factor of 1.2 applied
2) Stock Option Performance Factor of 1.1 applied
3) Stock Option Performance Factor of 1.0 applied
4) Including sign-on stock option grant
5) Awarded before date of appointment as member of Board of Management
For more details of the Long-Term Incentive Plan, see pages
155 to 160 of this Annual Report.
According to Philips’ Rules of Conduct with respect to Inside
Information, members of the Board of Management (and the other
members of the Group Management Committee) are only allowed
to trade in Philips securities (including the exercise of stock
options) during ‘windows’ of ten business days following the
publication of annual and quarterly results (provided the person
involved has no ‘inside information’ regarding Philips at that time).
To further align the interests of the members of the Board of
Management and shareholders, restricted shares granted to these
Board of Management members shall be retained for a period of at
least five years or until at least the end of employment, if this
period is shorter. To further align also the interests of other
Philips Senior Executives and shareholders, compulsory share
ownership for those individuals was introduced in 2004.
The total cash pay-out in any year is the sum of the base salary
received in the year concerned and the bonus pay-out related to
the previous year. The total cash pay-out in 2004 (and previous
two years) for each member of the Board of Management is
presented in the next table.
Total Cash pay-out
Members Board of Management1) 2002 2003 2004
G.J. Kleisterlee 807,069 1,185,890 1,882,600
J.H.M. Hommen 672,573 973,463 1,546,432
G.H.A. Dutiné 375,0002) 661,750 943,138
A. Huijser 337,5002) 581,444 971,300
1) Reference date for membership of the Board of Management is December 31, 2004
2) Related to period April – December 2002
For those current members of the Board of Management who
were also members of the Board of Management on April 1, 2004,
the variable performance-based reward part is presented in the
table below.
Variable remuneration as
% of total remuneration1)
Members Board of Management 2002 2003 2004
G.J. Kleisterlee 66.7% 49.1% 62.8%
J.H.M. Hommen 66.7% 49.3% 62.9%
G.H.A. Dutiné 0%2) 55.2%3) 66.4%
A. Huijser 0%2) 53.3%3) 64.9%
1) Restricted shares based upon actual grant price and stock options based upon Black & Scholes
value of the actual grant price in particular year (see note 32 share-based compensation)
2) Due to incomplete calendar year as member of the Board of Management, no variable
remuneration related to Board of Management period is mentioned
3) Including 9 months’ Annual Incentive related to period as member of the Board of Management
(date of appointment April 1, 2002)
Pensions
The final-pay pensions of members of the Board of Management
are funded by the Stichting Philips Pensioenfonds (the ‘Philips
Pension Fund’) of the Netherlands. The conditions contained in
the by-laws and the regulations of the Philips Pension Fund apply,
with the proviso that the pensionable age – from the point of view
of pension accrual – has been set at 60. If the contract of
employment of a member of the Board of Management continues
after the age of 60, the pension payments are postponed
accordingly, as provided for in the Philips Pension Fund by-laws
and regulations. As the retirement age is different from the date of
commencement of the state pension, the pension scheme provides
for a bridging payment in order to compensate for the adverse
effect. The Board of Management members’ own contribution
comprises 4% of EUR 64,776 and 6% of the difference between the
gross pensionable salary minus the franchise and the
above-mentioned amount of EUR 64,776. A different arrangement
resulting in additional pension benefits may apply in some cases as
a result of past policies.
25Philips Annual Report 2004